WPS Shuts Plants, Cuts Jobs

Nearly 2,500 Employees Out

Michelle SanFilippo, Staff Staff, January 17, 2005

New York — WestPoint Stevens is carrying out a sweeping overhaul of its operations — including closing plants and consolidating production — that will result in the elimination of nearly 2,500 jobs as it approaches the finish line of a long bankruptcy.

To consolidate its bedding manufacturing, WestPoint Stevens will close its Alamance Plant and Distribution Center in Burlington, N.C.; its Clemson, S.C., Fabricating and Greige Plants as well as Distribution Center; and its Middletown, Ind., Plant, while reducing more than 50 percent of the staff at its Clemson Finishing Plant.

The company's bath manufacturing will also be consolidated with the closing of its Drakes Branch, Va., Plant. Facility closings will take place in late March or early April.

Roughly 2,465 employees will be affected. The Alamance Plant and Distribution Center staffs 560; Clemson Fabricating Plant and Distribution Center employs about 760; Clemson Greige Plant, about 340; Drakes Branch Plant, about 450; and Middletown Plant, approximately 110. At the Clemson Finishing Plant, some 245 jobs will be eliminated.

The overhaul, said M.L. 'Chip' Fontenot, WestPoint CEO, could bring the major mill to within weeks of winning creditor approval of a business plan which will allow the company to emerge from a painful, protracted bankruptcy that began in June 2003.

“Does it move us closer? I think the answer is yes,” said Fontenot. “Our creditors still have some issues among themselves, but I think those could be settled in the next couple of weeks. And I think they know they have to be.”

With creditors seemingly close to signing off on the plan, WestPoint is still on track to emerge from bankruptcy by the end of March. “I'd sure like to think so, if we can get this accomplished within the next couple of weeks,” said Fontenot. “And if that happens, it's all in the hands of the bankruptcy court judge, and how fast he's willing to act. But once the creditors are in agreement, he should be prepared to move pretty quickly. So I think this could be done by the end of the first quarter. I know I've said that before, and we've missed our target before, but this time it looks like it can happen.”

According to company officials, the closings and reductions are directly related to the removal of textiles quotas from low-wage countries. While some of the production at these locations will be shifted to other facilities, a significant amount will now be sourced from other countries.

Lorraine Miller, senior vice president, finance and external communications, said, “It's unfortunate we had to do this because we are not competing on a level playing field. These moves will better help us compete and strike the right balance between domestic production and global sourcing.”

“This is another move in our ongoing strategy of adjusting as necessary to meet the challenges of doing business globally,” explained Fontenot. “We must be flexible in maintaining the most profitable balance between our domestic manufacturing and goods sourced from overseas. This becomes more critical with quotas removed.

“This restructuring will strengthen the company with better-aligned capacity and greater freedom to market in a cost-efficient way those products most in-demand. Our goal, of course, is to ensure the company's growth and profitability in a global economy,” he emphasized.

“We deeply appreciate the associates at these locations — indeed all our associates,” said Fontenot. “Their skills and perseverance over the years have made WestPoint Stevens a leader in our industry, and we sincerely regret that this restructuring is made necessary by today's global marketplace, where so many of our products can be produced much less expensively in countries other than the U.S.”

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