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Pillowtex To Close Consolidate Some Operations

KANNAPOLIS, N.C.-- Citing the continuing decline inmarket conditions and as part of its restructuring under Chapter 11bankruptcy, Pillowtex Corporation (OTC: Bulletin Board: PTEXQ) announced todaythat it will close a sheet manufacturing plant in Kannapolis and a towel yarnmanufacturing operation in Columbus, Ga. In addition, the Company plans toscale back towel production in Kannapolis.<BR><BR> The restructuring eliminates the jobs of approximately 590 employees inKannapolis and approximately 190 employees in Columbus. The Company begannotifying affected employees on Tuesday.<BR><BR> "We regret that economic conditions beyond our immediate control haveforced the difficult decision to close or scale back these operations and aresensitive to the personal impact it will have on our employees, their familiesand the surrounding communities," said Bob Haase, Pillowtex's executivedirector for operations. "However, we must ensure the future viabilit

KANNAPOLIS, N.C.-- Citing the continuing decline inmarket conditions and as part of its restructuring under Chapter 11bankruptcy, Pillowtex Corporation (OTC: Bulletin Board: PTEXQ) announced todaythat it will close a sheet manufacturing plant in Kannapolis and a towel yarnmanufacturing operation in Columbus, Ga. In addition, the Company plans toscale back towel production in Kannapolis. The restructuring eliminates the jobs of approximately 590 employees inKannapolis and approximately 190 employees in Columbus. The Company begannotifying affected employees on Tuesday. "We regret that economic conditions beyond our immediate control haveforced the difficult decision to close or scale back these operations and aresensitive to the personal impact it will have on our employees, their familiesand the surrounding communities," said Bob Haase, Pillowtex's executivedirector for operations. "However, we must ensure the future viability of ouroverall business by taking these difficult, but deliberate steps. We believethat the actions we are taking will allow us to service our customers moreeffectively and, in turn, improve the Company's viability in the verycompetitive home textiles industry." Haase said the restructuring eliminates excess manufacturing capacitybrought about by declining towel and sheet sales and will allow the Company tobetter align its production capacity to sales. For example, he said, netsales were down more than 16 percent in this year's first quarter as comparedto the first quarter of 2000. "Since last November, employees have undergone frequent periods oftemporary layoffs. This reorganization should allow the Company to operate onmore predictable schedules," Haase said. A sheet manufacturing facility, Plant 4 in Kannapolis will be closed byJuly 15, 2001. The plant employs approximately 200 management and hourlyemployees and manufactures low thread-count muslin and percale sheetingfabric. Production of certain goods currently manufactured at Plant 4 willmove to the Company's remaining sheet greige facility, Plant 16, in nearbyChina Grove. The building housing Plant 4 will be marketed for sale. Restructuring at Plant 1 will affect approximately 390 hourly andmanagement employees in the #1 weave department and portions of towel wetfinishing, towel fabrication, and towel distribution. The Company will phaseout the looms operating in the #1 weave department over the next severalmonths. The Company will continue producing bath towels, hand towels andwashcloths in the #2 and #6 weave departments, Plant 1's more modern towelweaving operations. After the restructuring, 3,500 employees will remain atPlant 1. As part of the restructuring, the yarn department in Columbus, Ga. willclose by July 15, 2001. The department employs approximately 190 persons andproduces yarn for towel weaving. Production of certain yarn currentlymanufactured at Columbus will move to the Company's towel yarn manufacturingdepartment in Kannapolis and to its yarn manufacturing plant in Tarboro, N.C.The Company will continue to operate the towel warping, bleaching and dyeingdepartments in Columbus. The Company's towel manufacturing operations inneighboring Phenix City, Ala. will not be affected. After the restructuring,1,150 employees will remain at Columbus and Phenix City. Pillowtex is working with employees affected by the closures andrestructuring. "The people affected by this action are good workers, and theCompany greatly appreciates their efforts. We will do all we can to ease thisdifficult transition in their lives," said Don Mallo, vice president, humanresources. "Our goal is to make certain that all employees impacted haveimmediate access to information they and their families need during thistransition period." To assist employees affected by the closings, the Company is workingclosely with the North Carolina Employment Security Commission and the GeorgiaDepartment of Labor which intends to have representatives on-site at theaffected facilities to provide direct access to claims filing, informationabout possible job opportunities, job retraining and other unemploymentbenefits. Pillowtex human resources managers at each location will help withquestions concerning company benefits. Employees at the Kannapolis and Columbus locations are represented by theUnion of Needletrades, Industrial and Textile Employees (UNITE). The Companyand UNITE will begin negotiations to determine other applicable benefitsincluding the possibility of hiring at neighboring Pillowtex facilities forthe affected employees. Mallo said the Company intends to work with local government and economicdevelopment commissions in Kannapolis and Columbus to minimize the impact ofthe job losses to the communities. Pillowtex Corporation, with corporate offices in Kannapolis, N.C., is oneof America's leading producers of household textiles including towels, sheets,rugs, blankets, pillows, mattress pads, feather beds, comforters anddecorative bedroom and bath accessories. The Company's brands include Cannon,Fieldcrest, Royal Velvet, Charisma and private labels. The Company filed avoluntary petition for reorganization under Chapter 11 of the U.S. BankruptcyCode on November 14, 2000. Pillowtex currently employs approximately 12,200 people in its network ofmanufacturing and distribution facilities in the United States and Canada.SOURCE Pillowtex CorporationCopyright 2001 PR Newswire




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