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'Combined company' could save millions, he says


By Meredith Barkley Staff Writer

News & Record

GREENSBORO -- Financier Wilbur Ross says his purchase of Burlington Industries earlier this month and pending purchase of Cone Mills would herald "the beginnings of a consolidation in the textile industry."

Though he has talked in the past about merging the denim businesses of the two Greensboro companies and finding ways that their jacquards and decorative-fabrics businesses could work together, his comments this week contained the strongest hints yet that he will merge the two.

"There are obvious synergies (efficiencies) that would occur from putting the two in a friendly mode toward each other," he said.

Ross also said that the "combined company" should save millions of dollars by eliminating such "duplicative" functions as selling and administrative, and from cutting jobs and shuttering "redundant facilities."

He said he will likely take a combined textile company public eventually so he can use its stock in further acquisitions and raise money without having to borrow.

His comments come amid a wave of layoffs in the textile industry, including Thursday's announcement that Cone would be cutting 190 workers Nov. 23 at its White Oak plant in Greensboro.

A consolidation, Ross said, would likely include more textile firms than Burlington, which emerged from bankruptcy earlier this week, and Cone, which is in the midst of bankruptcy reorganization. Ross, though, would not comment on whether he's interested in Guilford Mills, which has said it is looking for a buyer, or any other specific company. "We don't comment on plans until they're announced," he said Friday.

In the Triad, Cone Mills employs 1,448 workers, and Burlington employs 1,700.

Ross' $90 million bid for Cone will be the one to beat during a Jan. 29 auction. After a Cone acquisition is concluded, he said, he will turn his attention to other companies in the industry.

"Half the industry is in trouble," said Ross, who specializes in distressed companies. "I've been saying for some time that one problem with the industry is it's too fragmented. There are too many people with jacquards at 50 percent. There are too many people with dyeing and finishing at 50 percent."

Plants operating at 50 percent have a lot of expensive equipment sitting idle.

Those inefficiencies, he said, will have to be "justified" -- made more efficient through consolidation or other means.

Among the industry's biggest problems, Ross said, is that it has been populated with a lot of companies that have gone their own way rather than coming together into a potent political force. That, he said, has kept the industry from presenting a unified front on such critical issues as foreign competition, which has left the industry vulnerable to a wash of inexpensive imported goods, he said.

What's more, said Ross, small, inefficient companies can't compete in two areas that he feels are critical to the industry's survival: research, development and technical innovation, and developing brand awareness.

Bloomberg Business News contributed to this report.

Contact Meredith Barkley at 373-7091 or [email protected]

Burlington Industries President and chief executive: Joseph Gorga Chairman: Wilbur Ross Headquarters address: 3330 W. Friendly Ave., Greensboro 2002 earnings: Lost $101 million Employees: 5,200 Plants: 9 What it makes: Jacquards, denim, decorative fabrics, mattress fabrics, fabrics for office and hospitality interiors, wool and synthetic fabrics Cone Mills Chairman, president and chief executive: John Bakane Headquarters address: 804 Green Valley Road, Greensboro 2002 earnings: $11.4 million Employees: 2,972 Plants: 5 What it makes: denim, jacquards, decorative fabrics Source: Companies and News & Record

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Textiles is really a dead industry in this country but hopefully we can keep jobs that we do have in that industry. The days for hitech related industries could be numbered. I know it doesn't seem like it now but many hitech companies are finding cheap labor across seas. In about 15-20 years, we could be seeing big layoffs in hitech manuractoring plants. 40 years ago, no one thought the textile industry would die.

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