In lieu of an abstract, here is a brief excerpt of the content:

Chapter 17 Fieldcrest Cannon, Pillowtex, Bankruptcy, and the Return of David Murdock Market conditions, competition, the aftershock of the Murdock period, and bad industrial relations plagued the company’s new management. Fieldcrest Cannon struggled with profitability. In 1987, the firm lost $3,660,000 on sales of $1.4 billion. Profits increased the next year to $11,776,000 and to $23,434,000 in 1989. The encouraging trend did not continue into 1990, however , as Fieldcrest Cannon lost $37,834,000 and sales fell to $1.242 billion.1 During most of 1991, the textile firm continued to lose money but managed to make a profit of $3 million for the year with the strength of the fourth quarter. Company president Chuck Horn blamed the poor performance on the downturn in housing, which caused a loss in Cannon’s rug and carpet division. (Cannon Mills had purchased Designer Accents of Tennessee, Inc., in 1982 and renamed the firm the Cannon Rug Company.) Horn also explained that the bed and bath division of Cannon remained strong. The head of the bed and bath division, Robert Dellinger, noted that Cannon still maintained a 50 percent market share for towels. The domestic market was not growing, however, so sales growth had to come through gaining market share from rival firms. Dellinger claimed that the firm had recently gained an additional 2 percent market share at the expanse of its competitors.2 The growth of large discounters also changed market conditions for the textile firm. Cannon had been selling products to Kmart and Walmart for years. Those companies’ use of electronic inventory systems, which recorded actual sales at each register, tallied total sales at the end of the week, and placed orders accordingly, necessitated changes at Fieldcrest Cannon. Kmart 202 @ Fieldcrest Cannon, Pillowtex, Bankruptcy, and the Return of David Murdock required five days for orders to be filled, while Walmart expected orders in three days. Fieldcrest Cannon had to restructure its manufacturing operations to meet the demands of the large discounters.3 Restructuring of the manufacturing operations had been ongoing since the takeover by David Murdock. Cannon had cut fourteen thousand employees from its work force since the early 1980s,4 and the work force at its core plants in Kannapolis and Concord had fallen to seventy-five hundred production employees.5 Relations between management and production employees deteriorated in the atmosphere of rapid change. Workers “complained of job overloads, irregular hours, poor benefits and wage cuts.” Some workers claimed that the firm had cut employees’ wages by sixteen to eighteen dollars a day.6 While explaining that changes were necessary because of the competitive market, the company also admitted that it had to do a better job at communicating effectively with employees.7 As chief operating officer James Fitzgibbons noted, “We’ve got to change, and we know it.”8 News of the debacle at Executive Life and Murdock’s use of Cannon’s pension fund contributed to the bad labor relations at Fieldcrest Cannon. Workers felt betrayed by the firm. Company loyalty plummeted as many workers wondered if they could trust the new management. Some employees longed for the good old days of working under Charles Cannon. Pete McIntyre summed up the feelings of many when he said, “Mr. Cannon is not going to walk out of that grave down in Concord and say, ‘I’m going to take care of you.’ If Fieldcrest treated their employees fairly—give them a fair day’s pay for a fair day’s work—then there would be no problem.”9 It was not surprising that in this strained atmosphere the Amalgamated Clothing and Textile Workers Union tried again to organize the firm. What was surprising was the speed at which the union garnered the 30 percent support from workers to force a union vote. One week after the organizing effort began on June 12, 1991, the ACTWU filed with the National Labor Relations Board for a vote. The NLRB set the vote for August 20–21.10 Members of the International Association of Machinists from the Philip Morris cigarette plant in Cabarrus County helped the ACTWU. Some Philip Morris organizers merely sympathized with the Cannon workers. Others, however, had been workers at Cannon Mills and had gotten jobs at the unionized cigarette manufacturer after the textile company had eliminated their textile jobs.11 Although it already had some unionized plants, Fieldcrest Cannon fought the organizing effort.12 Company officials stated that “Fieldcrest Cannon...

Share