Companies step up …

Week of Sept. 24, 2001

In wake of Sept. 11 tragedies

From staff reports

In the aftermath of the terrorists attacks on America on September 11, the U.S. textile industry and its affiliates are responding.

Pillowtex Corporation last week sent two tractor trailers packed with its sheet sets, bath towels, washcloths and pillows to the World Trade Center site in New York. The donated shipments were sent from company sites in Kannapolis, NC, and Hanover, PA.

BASF Corporation, the North American affiliate of Germany-based BASF AG, has established an employee contribution driven fund to aid the families of the police, fire and emergency medical service workers who lost their lives while responding to the World Trade Center attacks.

All proceeds of the BASF Corporation 911 Fund will be donated to a select list of organizations that will benefit the families of those who lost their lives trying to help others during the tragedy. The Mount Olive, NJ-based company, which supplies chemicals to the textile industry, will also match all employee donations.

Pillowtex, which is operating under bankruptcy protection, also sounded its historic steam whistle Tuesday at 8:45 a.m., marking the time of the initial attack on the World Trade Center a week prior. The whistle, which can be heard for two or three miles, has rested on top of the Plant 1 steam plant for nearly 100 years.

For decades, the steam whistle has been sounded to signify historic events or occasions — both joyous and sad. The last time the whistle sounded was in 1996 to salute the passing of the Olympic torch through Kannapolis. During World War II, the whistle was sounded to signal the beginnings of blackouts.

Letter written

In other news related to the tragedy, the American Textile Alliance sent President Bush a letter last week pledging its support to America’s fight against terrorism. In the letter, the group of 14 textile associations, as key suppliers to the United States’ national defense efforts, wrote, “We want you to know that we stand ready to do our part in the war on terrorism.”

Meanwhile, Delta Woodside Industries of Greenville, SC, which supplies the U.S. government with military camouflage and battle dress, Monday posted a per-share gain of nearly 30 percent in the first day of trading since the attacks. The stock had been hovering near its 52-week low of 75 cents prior to Monday, when it closed at $1.01, and began to level off toward the end of the week. The stock closed at 88 cents Thursday.

Up the road in Spartanburg, SC, Milliken & Co. moved its giant landmark U.S. flag from atop its flagpole for the first time in many years.

Within hours of the attacks, the company attempted to lower the flag to half-staff. There was one problem, however: The flag flies atop a 100-foot flagpole and the flag measures 60 feet by 30 feet.

To lower it to half-staff would mean it would drag the ground, so Milliken officials made a quick decision by taking it down and replaced it with a slightly “smaller” flag that could be lowered to half-staff.

“Immediately we got calls wanting to know why the big flag was being taken down,” said Richard Dillard, director of public affairs. “That’s when we decided to display it along the huge outside wall near our duck ponds. The following day as we were putting it up, people were riding by in their cars blowing their horns. It really gave you chills.”

The flag, one of the largest in South Carolina is illuminated by three 1,000 watt spotlights.

“Mr. (Roger) Milliken (chairman and CEO) has always instilled a tremendous sense of patriotism throughout our entire company,” said Dillard, adding that every computer monitor in their corporate headquarters displays an American flag. “When it comes to America, I would describe our company’s culture as ‘passionately patriotic.’ ”

In other flag-related news, textile manufacturers in China are running around the clock to supply the demand for U.S. flags, according to The Washington Post.

The domestic textile industry, of course, has seen much of the production of textile goods — the Stars and Stripes notwithstanding — made for U.S. consumers grow in Asia while dwindling in this country.

Dear Mr. President

Week of Sept. 24, 2001

Textile Alliance pledges support

Editor’s note: Following is a letter sent last week to President Bush from the American Textile Alliance, a group of textile associations chaired by Karl Spilhaus of the Northern Textile Association.

Dear Mr. President:

As our government and people respond to the barbaric events of September 11th, the members of the American Textile Alliance want to pledge to you our support for your efforts to fight back against those who have attacked our great nation.

We represent various sectors of the United States textile industry, including suppliers in the cotton, wool, manmade fiber and textile machinery industries. The entire textile industry complex provides the U.S. military with approximately 13,000 different items made either partially or entirely from textiles.

These include a vast array of products worn and used by service personnel on land, at sea and in the air. They range from sandbags to parachutes; from camouflage fabrics and extreme weather gear to chemical and fire protection wear; from field tents to lightweight, ultra-strength materials for military aircraft.

In sum, we are key suppliers to the Armed Forces, considered by the Departments of Defense and Commerce to be an industry critical to the national defense. We want you to know that we stand ready to do our part in the war on terrorism. We have already contacted procurement officials at the Defense Supply Center Philadelphia to make them aware of our readiness to help, as we did when they were confronted with the unique supply challenges of the Persian Gulf War.

Mr. President, as you know, for the past several years, our members have been experiencing tough economic times. They have had to deal with the pain of massive layoffs, plant closings and bankruptcies. But these economic hardships will not deter us — we will help shoulder the burden of meeting and defeating the threat terrorism poses to our American way of life.

Sincerely,

Alabama Textile Manufacturers Association

American Cotton Shippers Association

American Fiber Manufacturers Association

American Sheep Industry Association

American Textile Machinery Association

American Textile Manufacturers Institute

GTMA-Association of Georgia’s Textile, Carpet and Consumer Products Mfrs.

Knitted Textile Association

National Cotton Council

North Carolina Manufacturers Association

Northern Textile Association

South Carolina Manufacturers Alliance

Textile Distributors Association

The Hosiery Association

CBI high on NTA’s agenda

Week of Sept. 24, 2001

147th meeting Sept. 30-Oct. 2

BOSTON, MA — The Northern Textile Association (NTA), the oldest industrial trade association in the United States, will conduct its 147th annual meeting this week at the Ponte Vedra Inn and Club in Ponte Vedra, FL.

The event take place September 30-October 2.

The meeting’s theme will be “How to do Business in the Caribbean and Central American Region.”

Featured speakers include: Minister Phillip Paulwell, Jamaican Ministry of Industry, Commerce and Technology; Arturo Peguero, Grupo M, representative for the Central American and Caribbean Textile and Apparel Council; Henry Fransen, Honduran Apparel Manufacturers Association; Carla Caballeros, Guatemala Apparel & Textile Exporters Committee; Qaizar Hassonjee, The Dupont Company; Jonathan Fee, Esq., Grunfeld, Desiderio, Lebelwitz, Silverman and Klestadt; and W. Lewis Tabb III, The CIT Group.

Also on hand will be representatives from the financial industry, U.S. Customs and support industries for domestic textile manufacturers doing business in the Caribbean and Central American Region. Leading Caribbean garment manufacturers have been invited to attend.

Ron Copsey, STN contributing editor, talked with Jonathan Hurstfield-Meyer, NTA chairman and president of Cleyn & Tinker. Following are excerpts of that interview, in Q&A format:

STN: What goals did you establish for NTA for your two-year administration?

Hurstfield-Meyer: To lead the industry to adapt to the accelerating changes within the global environment and to get the various groups in NTA positioned to meet these challenges.

STN: How well have you done in achieving these goals?

Hurstfield-Meyer: We are making good progress. The key role NTA can play is sensitizing the members to the changes in the global conditions affecting textiles.

STN: Do you expect attendance to be up or down from last year at your annual meeting?

Hurstfield-Meyer: Attendance will be down due not weakness in the textile industry, but also as a result of the recent terrorist attacks. However, I expect that we will have good attendance, despite these circumstances.

STN: How are the current business conditions affecting NTA members?

Hurstfield-Meyer: There is weakness for the commodity producer. However those with strong niche markets are doing well. Those who can provide fabric for military orders will likely see increased sales.

The Canadian textile industry is doing fairly well, since our expenses are lower than for those in the U.S. Since the Canadian dollar is worth about 65 cents compared to the American dollar, our expenses for energy, labor and loan interest are lower than in the U.S. Canada is highly dependent on U.S. markets and is becoming more integrated into the North American economy.

STN: Has NAFTA been generally a good thing for NTA members and the Canadian textile industry?

Hurstfield-Meyer: The Canadian textile industry would not have survived without NAFTA. For NTA members, it has been mixed. Certain companies have been badly hurt by Mexican competition in fabrics, others are shipping to Mexico successfully.

The single most negative effect has to do with the Canadian Free Trade Agreement of 1988, which was rolled unchanged into the NAFTA agreement.

It provides a special quota on woolen apparel, which allows 5 million meters of non-NAFTA origin fabric to enter the United States in the form of Canadian-made men’s suits and this has had a devastating effect on U.S. woolen and worsted fabric and garment producers.

STN: Although it is still early, does the U.S.- Caribbean Basin Trade Partnership Act appear promising for NTA members?

Hurstfield-Meyer: Yes, it does appear promising and that is why we are devoting this week’s annual meeting to that very subject. We see more and more apparel cutting and assembly in the CBI, but we have to do a good selling job, as many of these apparel manufacturers are owned by companies in the Far East.

STN: What non-routine activities has NTA been involved with this year?

Hurstfield-Meyer: We have made visits to Mexico, the CBI region, Guatemala and other countries to learn firsthand what we need to do to capture some of that business.

We also worked hard to obtain rebates on prior wool duties for some of NTA’s members.

Would you outline any major subject areas that are active within NTA?

One of the major subject areas is the short supply issue. There is a provision in both NAFTA and CBI about raw materials not readily available within those respective regions. We are protecting our members where short supply petitions have been filed on yarns and fabrics produced by NTA members.

This year we created a Finishers Committee, which can address specific issues that the dyers and finishers face.

STN: What possible actions or legislation by the federal government are of concern?

Hurstfield-Meyer: How will the CBI act be implemented? When will we have the final rules and regulations? Will it be expanded to the Andean Pact? We will be watching the new round of WTO talks and any new rules plus enforcement of present trade laws by the U.S. Customs to prevent transshipments.

There are several bilateral agreements in the works that need to be followed closely.

Cotton Inc. CEO …

Week of Sept. 24, 2001

Assesses industry troubles

Editor’s note: Several industry leaders recently provided STN with in-depth opinions about the plight of the U.S. textile complex. Following, in Q&A form, are responses by J. Berrye Worsham, president and CEO of Cotton Incorporated, Cary, NC, the research and marketing company representing upland cotton.


Worsham

STN: What factors led the industry into these dire straits?

Worsham: There are a couple of major factors here. One is the tremendously strong dollar over the past four or five years. A currency change (devaluation of Asian currencies) of that magnitude certainly had an impact, making our industry less competitive versus the world market.

The slowdown in the retail situation magnifies all of the other problems that we are having. The consumers are not buying as much. Growth has slowed down. Inventories are building up a little bit.

Ultimately, you have a situation where profitability is way, way off. It has affected cotton used by the textile industry. We are off about 3 million bales at an annualized rate in just the last three or four years. We know that the profitability is virtually nil for the entire industry.

The strong dollar has also had major impact on the price of agricultural products. When you are not exporting and, combined with a slowdown worldwide, there is an oversupply situation for all agricultural commodities and that is reflected in the price. The price (of cotton) today is less than half of what it was several years ago. It has had a major impact on the cotton market.

STN: How is your company coping?

Worsham: We’ve recognized the importance of improving the profitability situation at the grower level. We’ve instituted a new program that will be starting in 2002 called the variety improvement program. It is a long-term effort to try to get better germ plasm in cotton varieties that will improve quality and yield for growers. That will be important for the textile mills, as well.

We are doing more today thinking regionally in terms of working not only with the textile mills in United States but certainly the mills in the entire Americas region because that is the way the industry is going. More of our efforts have been targeted a little farther downstream to apparel manufacturers and retailers, as well.

We’ve had some cutbacks. We’ve closed our Basil, Switzerland office this past summer. We do not have a European operation anymore. In the course of the last couple of years, we’ve downsized some employees, too. We have about 5 to 7 percent fewer staff than a few years ago.

STN: Will the industry pull out of this funk?

Worsham: There will be some improvement. We are being hit by two negatives here, a down cycle and down trend. If the dollar weakens or the economy begins to improve, obviously that will have a positive effect. But for now we haven’t seen a major change in the dollar. It has weakened a little bit but nothing dramatic. We have also not seen any great improvement in the economy. So it will be a year or so off, probably.

STN: What effect has NAFTA had on your business?

Worsham: Overall NAFTA has been a positive. It has allowed some business to compete against Asian business. From a raw cotton perspective, the question is, “Can you compete with Asia?” And I think that NAFTA has helped. It may have allowed some textile business to go from the United States to Mexico but that business may have gone to Asia anyway. From a U.S. cotton standpoint, we supply a very large percentage of the Mexican business. As long as it stays in the United States or Mexico that’s generally good for cotton.

STN: Will CBI help the industry?

Worsham: We think that CBI could be beneficial if all of the problems with it are fixed. That should be a plus for the textile industry and U.S. cotton. We held a CBI summit about a year ago to try to link up the industry with the buyers and sellers there.

STN: What are the biggest impediments that the industry faces?

Worsham: The strong dollar is certainly one. The state of the economy is another. The retailers are looking for short runs and quick turnarounds. Right now, that’s not what the industry is geared to do. We’re geared to run large volumes. That’s certainly a problem.

CEMATEX tries to snuff out …

Week of Sept. 24, 2001

Fires related to ITMA 2003

CEMATEX, the European Committee of Textile Machinery Manufacturers, is attempting to put out fires regarding the beleaguered International Exhibition of Textile Machinery (ITMA) trade show of 2003.

Last week, the group issued a press release “in response to rumors circulating ... regarding the organization” of the quadrennial event and “underlined its commitment to ITMA 2003 taking place at The NEC, Birmingham (England).”

Indeed, the grapevine has been busy since June, when word came that the British Textile Machinery Association (BTMA) — the host nation association — would no longer be involved in the show’s organization. Details about the cause of the withdrawal were fuzzy, as officials from each side refused comment. The organizing committee structure also was left open for speculation.

CEMATEX said last week that an organizing committee has been set up comprising members of The National Exhibition Centre (NEC), which will plan the show directly with CEMATEX.

Contracts have been signed with The NEC to enable the exhibition to take place October 22-29, 2003.

“After making a detailed evaluation of the options available to us, we chose The NEC as the venue for ITMA 2003 and we have every confidence that the show will be extremely successful,” said Bernard Terrat, president of CEMATEX. “This will be the first time that ITMA has been held in the United Kingdom and we are all looking forward to working closely with the new organizing committee to ensure that our exhibitors and visitors experience an outstanding show.”

ITMA is the world’s largest textile machinery exhibition and takes place every four years. ITMA 2003 will use the whole of The NEC site, with an expected 1,400 exhibitors and 150,000 visitors from more than 140 countries.

Guilford to close

Week of Sept. 24, 2001

… New York facility

GREENSBORO, NC — Guilford Mills, Inc. announced another closing September 10, this time its stretch knit fabric-making facility in Cobleskill, NY, where 500 people are employed.

The company said it will operate the facility through November 8 to service remaining orders and assist in transitioning its customers to new suppliers.

Guilford added that it is currently discussing opportunities for the sale and/or alliance of this operation with other interested parties. Such discussions may result in the continuing operation of the facility under new ownership.

Guilford had recently consolidated its intimate apparel and swimwear lace and fabric production into this facility and reduced fixed costs by closing two other facilities. However, eroding business conditions have resulted in further sales and margin declines and increasing uncertainty as to the viability of the operation, the company said.

The company, which has eliminated more than 1,000 domestic jobs over the past 14 months, will reduce its domestic apparel business selling and administrative staff by 70 percent. Corporate staff will also be affected as certain functions are decentralized to the non-apparel businesses, the company said.

Guilford said it anticipates a fourth quarter pretax charge associated with the actions to range from $60 to $75 million.

Bankrupt JPS Apparel

Week of Sept. 24, 2001

… decides to close doors

GREENVILLE, SC — JPS Apparel Fabrics Corp. said it is closing its doors after failing to find a buyer.

The company, which filed for bankruptcy two months ago, is shutting the Monaghan Plant here with 372 workers and the Watts Plant in Laurens, SC, with 137 workers, by the end of the month.

JPS added that it expects to close its headquarters here with 20 employees and its New York sales office with five employees on or about October 12.

The company made greige cloth for the apparel industry.

Reid McCarter, JPS Apparel president, blamed the company’s woes on the slowdown of the economy and a flood of imports.

TNS Mills planning employee furloughs

GREENVILLE, SC — TNS Mills Inc. plans to furlough a number of employees at its plants in Blacksburg, SC, and Spartanburg, SC, during the Thanksgiving and Christmas periods.

The Japanese-owned company said it will cut back on production to reduce its yarn production.

In August, the company laid off about 30 employees at the Blacksburg yarn manufacturing plant and 43 at its Gaffney yarn manufacturing and weaving facility.

Paxar announces cuts after buying U.S. Label

GREENSBORO, NC — Paxar, the world’s largest maker of apparel labels, plans to lay off 222 people here beginning in November.

The company bought Greensboro-based U.S. Label, a maker of clothing tags and labels, earlier this month.

Paxar said the plants here duplicate work done at other plants, including graphic design and label weaving.

AMTEC to reorganize under new owners

MOUNT PLEASANT, NC — Tuscarora Yarns, Inc. announced that shareholders of American Textile Export Co. (AMTEC) have agreed to a reorganization effective October 1.

The new company, AMTEC, LLC, will be owned by Tuscarora Yarns, Inc., Jones Companies, Limited, LLC, Pharr Yarns, Inc. and Washington Manufacturing Co., LLC. Tuscarora Yarns will be the majority owner.

AMTEC, LLC will continue to engage in the export and import of textile yarns and other related products with Peter Hegarty as president.

In a related move, Tuscarora Yarns announced that, effective September 1, Hegarty will also assume responsibilities for directing Tuscarora Yarns, Inc. global marketing and sales effort, reporting to Bud W. Willis, president and chief operating officer of Tuscarora Yarns.

Hegarty will continue to maintain an office in Ranlo, NC, as well as in the corporate headquarters of Tuscarora Yarns here.

Frisby Technologies one of fastest-growing firms

WINSTON-SALEM, NC — Frisby Technologies, the developer of patented Comfortemp® climate control materials, has been named one of the fastest growing technology companies in North Carolina in the 2001 North Carolina Fast 50 list.

Frisby placed 15th on the list, with a five-year revenue growth rate of 744 percent. A year ago, Frisby placed 21st on the 2000 North Carolina Fast 50 list and also earned a spot on the national Fast 500 list.

Frisby’s products were introduced commercially in 1997. Since that time, its licensed customer base has surged to more than 120 global partners and the number of consumer products containing from Frisby products has grown from 25 to more than 1,000.

Innovo Group acquires Azteca’s knit division

Innovo Group, Inc, a sales and marketing organization that designs and sells craft, accessory and apparel products to the retail, specialty and premium markets, has acquired the knit apparel division of Azteca Production International, Inc.

Azteca’s knit division designs, produces and markets knit apparel products for private label and retail customers such as Tommy Hilfiger, Calvin Klein, Express, Bongo, American Eagle and Sears.

Guest Editorial

Week of Sept. 24, 2001

Defending our economic freedom

Editor’s note: The writer is president of the Institute of Textile Technology, Charlottesville, VA.

I AM WRITING this in the aftermath of the “Assault on America” that devastated thousands of families, crippled our national and financial capitols and left our nation in shock. These terrorist acts resulted in visible images that will be forever etched into our memories and left scars in our hearts and souls. The event awakened our nation to its vulnerability and will likely change the very roots of our free and open democratic society. In response, U.S. citizens of all races, religions, and geographic regions have rallied with great resolve to bring the perpetrators of this audacity to justice and to reestablish security for our nation and families. Let no one question the power of the American people when put to the test!

As I reflect on the current economic conditions facing our industry, I’m drawn to wonder if our nation has not been under assault for some time. While no buildings had been blown up and no blood had been shed, it appears that the very foundation of our nation’s economy has been under attack. The target of this attack is the manufacturing infrastructure of our economy that, once weakened beyond its breaking point, could result in destruction more catastrophic, devastating and widespread than the targeted and isolated events witnessed in New York and Washington. As fires, intensified by aviation fuel, weakened the steel infrastructure of the World Trade Center Twin Towers to the point of collapse, I fear that the weakening of our nation’s manufacturing infrastructure could result in the collapse of our economy.

WITHOUT TRIVIALIZING the human suffering witnessed during these terrorist acts, the ultimate impact of the economic terrorism being experienced by our country could be far more devastating. It should be clearly understood that governments that devalue their currencies to provide indirect subsidies to trade, that do not reciprocally honor our open trade policies and that do not support basic human and environmental values are directly assaulting our economy, our values and the basis of our freedom.

As it is likely that our response to explicit acts of terrorism will be to enforce our laws and aggressively protect our borders, so should our response to economic terrorism be to enforce our trade laws and assure that our industry is competing in a fair and reciprocal international market. We can no longer afford to submissively open our market to countries that do not respect our values and honor our trade policies.

AS THE devastation to our economy is realized and understood, one cannot help but believe that the resolve and resourcefulness of the American people will once again lead to its salvation. No other nation in the world can compete with the United States of America, when focused. Our human and technological resources have demonstrated our ability to recover from assault and to conquer those who challenge the basis of our values and strength.

So it is with the U.S. textile industry. Now, more than at any time in our industry’s history, we must work together to create the political resolve to strengthen the manufacturing integrity of our nation and to rely on technical innovation to improve our economic competitiveness. Let no one question the power of this industry when put to the test!