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Burlington Announces Reorganization Plant Closings

Burlington Industries Inc., Greensboro, N.C., has announced the reorganization of its apparel fabrics business, a move designed to position the company for long-term success against growing worldwide competition. According to the company, operations will be streamlined, and U.S. capacity will be reduced by 25 percent to compensate for the continuing surge of low-priced garment imports, primarily from Asia.The plan will result in the loss of approximately 2,900 jobs and the closing of seven plants.We have been running our apparel fabrics operations at less-than-full capacity over the last 9 to 12 months, anticipating that the surge of low-priced garment imports from Asia might only be the temporary result of the Asian financial crisis, said George W. Henderson III, chairman and CEO.We now believe that this situation is more permanent in nature and we must reduce our U.S. manufacturing capacity accordingly and utilize only our most modern facilities in order to be competitive.The plan affects only the apparel products segment of the company.The major elements of the plan are: To create a fast, responsive organization with an improved cost structure, the company will merge Burlington Klopman Fabrics and Burlington Tailored Fashions two businesses that have complementary product lines and serve many of the same customers. Burlington Sportswear will become a business unit within the Burlington Global Denim division. The company will close its knitted fabrics and knitted shirts business. Burlington will reduce U.S. apparel fabrics capacity by 25 percent and at the same time reorganize manufacturing assets to work together. Seven plants will be closed: Mooresville, Forest City, Oxford, Cramerton and Statesville, N.C.; Bishopville, S.C.; and Hillsville, Va. One department in Raeford, N.C., will also be eliminated. The cost of the reorganization will be reflected in a restructuring charge, before taxes, of approximately $80 to 90 million in the second fiscal quarter, ending April 3, 1999, plus other expenses related to the restructuring of approximately $25 to 35 million, before taxes, that will be charged to operations over the next six to nine months.By reducing our overall capacity, using only our most modern equipment, and concentrating on a value-added product mix, we will be able to run our U.S. operations on a much more efficient and cost-effective basis, Henderson said.The combination of streamlined and modern U.S. operations, together with our new state-of-the-art manufacturing facilities coming on stream later this year in Mexico, will position the company well to compete on a global basis.Henderson added: We deeply regret the loss of jobs, many of which are held by long-term Burlington employees.

February 1999