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Chapter 16 David Murdock, Modern Management, and the Demise of Paternalism Immediately, David Murdock made major changes in the operation of the textile firm.1 He reorganized Cannon management. Stolz resigned as chairman and Murdock became chairman and chief executive officer. Mississippian Harold M. Messmer Jr. came to Cannon with Murdock and became the firm’s president and chief operating officer. Much of the rest of the reshuffling occurred within the firm among existing management.2 The new chairman immediately began to modernize Cannon Mills and improve the efficiency of the firm’s operation. Between 1983 and 1984, the textile company spent $100 million to modernize equipment, including the most advanced textile equipment in the world. Management planned to spend a similar amount in 1985 and 1986. Cannon Mills also worked to improve its public image by revamping its advertising. The advertising department placed new slick advertisements in major magazines featuring celebrities with Cannon towels.3 With Cannon Mills operating at a four-million-dollar loss when he took over, Murdock laid off eighty-five hundred workers for six days in March 1982. Public relations officer Ed Rankin characterized the action as a “curtailment in production” and avoided using the term “lay off.” Workers’ morale dropped. Some noted the bad conditions at Cannon, and one worker told a reporter that “people are scared to death.”4 By the end of the year, Cannon Mills began selling or closing some of its plants. The sale of Plant 14 in Graham, North Carolina, to Culp, Inc., of High Point, North Carolina, cut 196 @ David Murdock, Modern Management, and the Demise of Paternalism three hundred workers from the Cannon payroll.5 Murdock had eliminated more than three thousand jobs by the time he sold Cannon Mills in 1986.6 Many Cannon workers were leery of David Murdock. The new chairman represented a break from the family-oriented, paternalistic management of the past. Murdock told workers, “People who don’t want to work and don’t want to do a good job [won’t be allowed to stay]. I’m aware there are some people in the Cannon family who think if they hide in the stairwell they can continue to draw their paychecks and not have to work hard.”7 Cord Winburn, who retired after forty-three years as weaver, did not like Murdock and his new management style. “I’d rather have things the old way,” he told the Charlotte Observer a year after Murdock took control of Cannon Mills.8 Workers soon pegged Murdock as a modern businessman, not a paternalistic leader. Johnny Mae Fields viewed Murdock as “a businessman from the top of his head to his toes.”9 Cannon Mills retiree Evis Moore stated that Charles Cannon was family but “Mr. Murdock’s the boss.”10 Any sense of family between the management of Cannon Mills and its workers was gone. Chairman Murdock also brought changes to the mill village. Viewing the company housing as “an enormously losing proposition,” Murdock began to sell company houses to the firm’s workers.11 In 1983, Cannon sold three hundred houses to workers at its plants in Concord, Rockwell, China Grove, and Salisbury, North Carolina. Noting that it was “one of the last companies in the United States to provide company-owned housing and that most companies in the textile industry sold all their houses more than 20 years ago,” Cannon Mills announced on October 18, 1983, that it would sell its houses in Kannapolis. The firm offered its mill houses to then-current tenants below market prices and provided financing through Countrywide Funding Corporation.12 Noticing that Kannapolis looked rundown, Murdock spent $20 million to renovate the downtown district. He created “Cannon Village” out of the downtown district, an attractive shopping area composed primarily of outlet shops.13 Murdock also sought to divest the firm of the company-sponsored YMCA. The chairman gave land in the GI Town section of Kannapolis for the new center. Thirty GI houses were to be torn down to make room for the new YMCA, and residents, mostly retirees, were moved to other housing. While the Cannon family had paid for the past YMCAs with company funds, Murdock left the building of the new center to the community. YMCA director Jerry Shepherd summed up the Murdock philosophy as “Let’s see some initiative out of you folks, rather than just giving a handout.”14 The transfer of the Cannon family’s beloved YMCA from company to...

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