EOnation: UNITE TRIES TO ORGANIZE EMPLOYEE BUYOUT

[Mike Wood <michaelwood@fuse.net>]

from the ATLANTA JOURNAL & CONSTITUTION :

BUSINESS TUESDAY • March 20, 2001




--------------------------------------------------------------------------------


Textile union considers buying into business
After years of battles, employees of Pillowtex unit may invest to help
the troubled company --- and save their jobs.
Chris Burritt - Staff
Tuesday, March 20, 2001


Kannapolis, N.C. --- The labor union that fought a quarter of a century
to organize Fieldcrest Cannon is now exploring the possibility of an
employee buyout of the textile maker's financially strapped parent.

Officials of the Union of Needletrades, Industrial and Textile Employees
said they believe Pillowtex Corp. is in such deep financial trouble that
its reorganization in federal bankruptcy court may include eliminating
thousands of jobs across the South.

Today, Pillowtex President Tony Williams plans to discuss the company's
future with salaried employees.

Since Pillowtex ran out of money last November and sought bankruptcy
court protection, its five Fieldcrest Cannon mills in the Kannapolis area have
operated sporadically. It plans another shutdown of all five mills ---
employing 5,000 people --- during the last week of this month.

Fieldcrest Cannon accounts for 9,100 of Pillowtex's 12,200 employees.
Some 7,000 are in North Carolina, which last year lost 10,400 textile jobs,
leading the region. North Carolina's loss of 19,800 manufacturing jobs
last year led the nation.

Some workers fear Pillowtex will close permanently more of its
approximately 20 manufacturing sites across the South. The company is in the
process of eliminating about 300 jobs in Hawkinsville, Ga., where it is closing
a
bleaching and finishing factory. It is closing another facility in Rocky
Mount, N.C., cutting about 250 jobs.

Pillowtex still operates a manufacturing complex on both sides of the
Chattahoochee River in Columbus and Phenix City, Ala. Those factories,
which employ about 900 UNITE members, have also suffered from partial
shutdowns, amid Pillowtex's effort to reduce a glut of bed and bath products
piled
up in its warehouses.

Fearful of additional plant closings, UNITE officials are studying
whether to seek an ownership stake in Pillowtex, the nation's third-largest
sheet
and towel maker, as part of its Chapter 11 bankruptcy reorganization in
Wilmington, Del.

Such a move would face many hurdles, including a requirement that
Pillowtex workers agree to contribute a portion of their pay in return for
partial
ownership in the newly reorganized company. They also would share in the
company's profits and possibly have a larger voice than they now do in
how the business operates.

UNITE officials met last Thursday with workers who in 1999 led the
biggest employee buyout in North Carolina history, the $200 million purchase of

the Champion International Corp. paper mills in Canton, Waynesville, N.C.,
Athens and four other satellite operations. The company, renamed Blue
Ridge Paper Products Inc., has paid profit sharing to 2,000 employees over the
past two years.

"We asked them how it would work," said Mark Pitt, co-director of UNITE's
Southern region. In Pillowtex's bankruptcy reorganization, he sits on the
committee of unsecured creditors, who along with other creditors will
greatly influence how Pillowtex emerges from bankruptcy court.

"It is very complicated and very interesting," Pitt said of the
possibility of an employee stock ownership plan helping to finance Pillowtex's
reorganization. "We are in a fact-finding process. Nothing is being left
out of the discussion."

UNITE has yet to approach Pillowtex with the idea. But Williams, the
 company president, said Friday he'd be willing to consider the possibility.
"I do not have any aversion to that," he said, adding he would "be willing to
listen" if an employee buyout would help reduce the company's debt.

With some employees in Kannapolis struggling to pay basic bills,
including phone and utilities, some say they'd be willing to contribute a
portion
of their paychecks in an employee stock ownership plan, if it meant job
security.

"I'd do anything I could to keep my job," said Delores Gambrell, a local
union official who has worked 30 years in Fieldcrest Cannon's plant No.
16. At 49, she said, "Textiles is all I know."

In an interview Friday, Williams said he envisions Pillowtex emerging
from bankruptcy protection as a leaner, more focused textile maker that is
once again profitable.

That transformation, he conceded, will result in fewer jobs and
factories. But he said he's not sure how many fewer but certainly not as many
as
UNITE says it fears.

"What we are trying to do is preserve as much of the company as possible,
trying to make it profitable," he said from the headquarters of Fieldcrest
Cannon, which Pillowtex acquired in 1997.

At that time, Pillowtex was based in Dallas, but Williams is now moving
the corporate offices to Kannapolis, where in the early 1900s Fieldcrest
Cannon's predecessor established Kannapolis as a leading Southern textile
city.

In recent weeks, Williams has talked about outsourcing some of
Pillowtex's production. He said Friday he believes few consumers care where
sheets and towels are made, an assertion that infuriates UNITE members who say
foreign companies couldn't manufacture the venerable Fieldcrest, Cannon and
Royal
Velvet brands as well as American workers.

"Kannapolis is Greek for city of looms," said UNITE official Walter
Szymanski. "The concern is if Tony Williams gets his way, it will be the
city of tombs."

Foreign mills are cheaper and in many instances produce goods as good as
U.S.-made, Williams said.

"If we do not compete in this market, we are all going to be out of a
job, quite candidly," said Williams, 54, a London native working in the
textile industry for the first time.

He joined Pillowtex as chief financial officer last May, five months
before company President Chuck Hansen resigned.

A month later, the company filed for bankruptcy court protection, laden
by debt from a spree of acquisitions, including Fieldcrest Cannon in 1997.

In 1999, under Hansen, Pillowtex ended Fieldcrest Cannon's
quarter-century fight against efforts to organize its Kannapolis-area mills.
UNITE
negotiated its first contract for workers last year. Now tensions have
resurfaced with the manufacturing slowdowns.

UNITE officials said many of the factories are profitable, once separated
from the debt of Pillowtex's acquisitions.   Some are profitable, some are not,
countered Williams, who said that in coming months Pillowtex officials will
decide which operations will be closed.

"This is not a campaign against the union or the workers," he said. "I
realize it is people's livelihood, as well as it is mine. I want this to
succeed."