GLOBE MFG. TO CUT 130 SPANDEX JOBS
Byline: Scott Malone
NEW YORK — Spandex producer Globe Manufacturing Corp. said last week that it plans to cut 130 manufacturing and administrative jobs from its Fall River, Mass., plant and headquarters.
The company described the move as a necessary cost-cutting step, following its involuntary entry into bankruptcy late last month.
Many textile companies have started to show signs of weakening under the continued brutal market conditions they’ve faced for the past few years — the combination of rising raw materials and energy costs and declining prices have left most companies scrambling to find ways of cutting costs.
Last year, knitters Glenoit and Dyersburg, burdened by heavy debt loads, filed for bankruptcy protection in an effort to get their financial houses in order.
Other top mills, including Burlington Industries, Guilford Mills and Galey & Lord have taken cost-cutting steps, including layoffs and moving production to Mexico over the past two years. These trends have been seen throughout the textile industry, which ended 2000 with 524,000 workers, a 25,000-job decline from 1999, according to recent government data.
Globe’s cuts will primarily come from its dry-spinning and reaction-spinning operations. In New England, the company will now focus on making heavy-denier spandex. Globe plans to move its reaction-spinning operations to its Gastonia, N.C. plant.
The firm also operates a plant in Tuscaloosa, Ala., and employs about 700 workers, according to its Web site.
“Due to a highly competitive textile marketplace that has caused intense downward pressure on prices and revenues and other recent events, especially in the fourth quarter, we had little choice but to make the difficult decision to reduce employee levels,” chief executive Richard Heitmiller said in a statement, adding that the cuts will not hinder the company in filing orders.
According to market observers, spandex prices last year plummeted after large amounts of new manufacturing capacity came online around the world. An executive at DuPont described the environment as a “spandex war.”
In a filing with the Securities and Exchange Commission, privately owned Globe reported that it was in the red for the first half of 2000, taking a net loss of $11.7 million, compared with profits of $156,000 a year earlier.
Revenues were down 16.7 percent, to $73.3 million.
Globe Manufacturing files with the SEC because of its public debt — it has $150 million outstanding in 10 percent notes. As reported, it was a trio of its bondholders that forced the company to file for bankruptcy. The filing came after the company and its bondholders had gone through three forbearance agreements.