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Carolina Journal Publisher John Hood’S Exclusive “Daily Journal.” Policy Issues Facing North Carolina State and Local Governments

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Carolina Journal Publisher John Hood’S Exclusive “Daily Journal.” Policy Issues Facing North Carolina State and Local Governments • Think ‘Outside Box,’ • Universities Neglect Education Expert Says C A R O L I N A General Education Beach Renourishment Spy Conference in Raleigh Volume 12, Number 10 A Monthly Journal of News, October 2003 Analysis, and Opinion from JOURNAL the John Locke Foundation www.CarolinaJournal.com www.JohnLocke.org Pillowtex Jobs May Have Been Saved If Union Stayed Out UNITE leaders wouldn’t let UNITE President Bruce Springs buy because Raynor: master organizer of loss of Kannapolis jobs and corporate campaigner By PAUL CHESSER By PAUL CHESSER Associate Editor Associate Editor RALEIGH RALEIGH he 6,450 layoffs at Pillowtex, Inc., here’s a scene in the movie Norma which included about 4,800 employ- Rae in which organizer Reuben T ees in North Carolina, may have T Warshawsky prods Sally Field’s title been mitigated had the union representing character to lead her fellow textile workers the workforce not blocked a deal to sell the to form a union. “If you were in the State company. Department,” he says, “we would be in a The largest manufacturer of home fash- war.” ions in the United States, Springs Indus- The 1979 film was a fictionalized ac- tries, offered as much as $300 million for count of the effort to unionize employees at Pillowtex’s operations and assets in the early the J.P. Stevens Mill in Roanoke Rapids. spring. However, the Union of Needle- One of the real-life leaders in that war was trades, Industrial and Textile Employees Bruce Raynor, who started his career with may have hampered the deal because the Textile Workers Union of America in Springs’s plans didn’t include the retention Carolina Journal photo by Michael Lowrey 1973. of Pillowtex’s Kannapolis-area operations, The Pillowtex plant and offices in Kannapolis, where thousands of workers lost their jobs. After a couple of mergers with other which employed about 4,400 of its workers. unions and 2 1/2 decades of (mostly South- “The union didn’t help matters and the Southern Textile News in May. The union’s big buyer ern) organizing drives, Raynor was named didn’t provide any reason for Springs to be “If there is a single buyer out there who president of the Union of Needletrades, more enthusiastic about [the deal],” said thinks that they can come in and run this One bidder UNITE brought in was Industrial and Textile Employees in 2001. Sam McNeil, managing director of River company and take these labels and leave Cerberus Partners of New York, which Raynor is often referred to as part of the Capital Advisors, a Charlotte investment these workers in the street, they’re going to Harris Raynor insisted was interested in composite that formed the Reuben charac- company that specializes in working with have one hell of a fight on their hands,” said running Pillowtex. However, Cerberus op- ter in Norma Rae. His biography on the troubled companies. “They really shot their Harris Raynor, Bruce’s brother and vice erates as a “vulture fund,” in which inves- union’s website says he is “responsible for workers in the foot, in my opinion.” president of the Southern region of UNITE. tors pick over the remains of a near dead the national organizing program for UNITE, After Springs stepped back, the fight- company in order to turn a profit. in which capacity he is credited with inno- UNITE, we stand ing words caused the company to re-evalu- Raynor said that Cerberus was inter- vative and aggressive tactics that have led ate its offer in light of depressed first-half ested in parts of Pillowtex, but that the the way for the entire labor movement.” UNITE pressured Springs to allow other retail sales. Home textile sales declined at a company was reluctant to sell off pieces. The J.P. Stevens battle marked a his- offers for Pillowtex after the two companies double-digit rate during the first six months “[Pillowtex] was clearly something they toric turning point for labor unions, be- had signed an exclusive purchase agree- of 2003. wanted to look at,” Raynor said. cause it established a tough new strategy: ment for rights to brand names and some “There are very few players who didn’t Textile insiders said Cerberus’s inter- Corporate campaigning. The tactic has been manufacturing facilities. The deal was escape the crushing environment early this est, like Springs’s, primarily was in the value embraced by almost all unions in an effort amended to allow other buyers that the year,” said Don Hogsett, business editor of of Pillowtex’s widely recognized Charisma, to refortify their flagging memberships, and union said potentially were “willing to op- Home Textiles Today. Cannon, and Royal Velvet labels. one that Raynor employs effectively. erate Pillowtex as a viable company.” The business trend changed Springs’s According to industry experts, Cerberus “A corporate campaign is a form of “We are confident that one of these new perspective. If the company were to be asked never made a formal bid, but even if it did reputational warfare waged through broad- companies will be able to make a successful back into its deal for Pillowtex, the previous it likely wouldn’t have produced a better sides, half-truths, innuendo, and a staccato bid for the company and preserve Pillowtex offer that was approved by its financiers fate for the Pillowtex employees. McNeil, rhythm of castigation, litigation, legisla- jobs,” UNITE President Bruce Raynor said would have to be revisited. The most likely who said he knows Cerberus’s manage- tion, and regulation,” writes Jarol Manheim, in early May. “We compliment Springs’ top result would be a vastly scaled-down propo- ment style well, said they are “hardline” a George Washington University professor corporate leadership for allowing jobs to sition. As time passed, the value of and “a very bottom line-oriented invest- of media, public affairs, and political sci- come before their own financial interests.” Pillowtex’s assets diminished rapidly. ment company.” ence. He is the author of The Death of a Springs relented because UNITE threat- While Pillowtex flirted with other suit- “If Mr. Raynor thought they would keep Thousand Cuts: Corporate Campaigns and the ened to rally at its headquarters in Fort Mill, ors — some coaxed by the union — Springs people employed,” McNeil said, “he was Attack on the Corporation. S.C. withdrew its offer. very naïve.” “It is fought in the press and on televi- “We think the prospect of a national Whether Springs gave up because of “I think Springs would have been the sion, on the Internet, in the halls of govern- battle with the 250,000 members of UNITE union threats, or because of financial issues, best shot,” said Warren Shoulberg, editor- ment, in the marketplace, on the trading was something that Springs management or both, is unclear. Springs officials de- does not want to contemplate,” Raynor told clined to comment. Continued as “In Effort,” Page 3 Continued as “Raynor’s Campaigns,” Page 3 State Should Have Which Legislature? The John Locke Foundation NONPROFIT ORG. Contents 200 W. Morgan St., # 200 U.S. POSTAGE Part-Time, Session Limits 42% Raleigh, NC 27601 PAID Part-Time, No Limits 13% RALEIGH NC PERMIT NO. 1766 Full-Time Legislature 27% Calendar 2 Not Sure 18% State Government 3 Education 6 Higher Education 10 Local Government 14 Books & the Arts 18 Opinion 20 % of N.C. Respondents in Oct. 2002 “Agenda” Poll Parting Shot 24 C A R O L I N A Contents ON THE COVER • Bucking the notion that schools with • While Cumberland County’s Crown Coli- JOURNAL needy populations can’t succeed, Kerners- seum is a state-of-the-art facility, one thing • The 6,450 layoffs at Pillowtex, Inc., which ville Elementary in Forsyth County met all has been lacking: Enough events drawing included about 4,800 in North Carolina, 27 of its federal achievement goals for 2002- enough people for the building to break may have been mitigated had the union 03. Page 9 even. Page 16 representing its employees not blocked a deal to sell the company. Page 1 HIGHER EDUCATION • An interview with Raleigh lawyer Gene Richard Wagner Boyce. Page 17 Editor NORTH CAROLINA • The idea of a general education within the University of North Carolina system has THE LEARNING CURVE Paul Chesser, Michael Lowrey • The secondary deal behind the purchase “atrophied into a grab bag of elective Donna Martinez of North Carolina Natural Gas by Piedmont courses,” says a new study by the Pope • A review of the Raleigh Spy Conference Associate Editors Natural Gas Co. could eventually cause cus- Center for Higher Education Policy. held in September. Page 18 tomers’ rates to rise and diminish already Page 10 faint hope that taxpayer-funded bond • George Leef reviews the book The Future Karen Palasek, Jon Sanders money will be repaid. Page 4 • A resounding affirmation of free-speech of Freedom by Fareed Zakaria, and a review Assistant Editors rights on college campuses was recently of the book Naked Economics: Undressing the • The North Carolina Center for Applied made by the Office for Civil Rights of the Dismal Science by Charles Wheelan. Page 19 Andrew Cline, Roy Cordato, Textile Technology, a state-owned higher- U.S. Department of Education. Page 11 Charles Davenport, Ian Drake, education institution that since 1996 has re- OPINION Tom Fetzer, Nat Fullwood, ceived more than $1.2 million annually in • Jon Sanders writes that a new study of John Gizzi, David Hartgen, aid from the state, was audited recently for general-education requirements should • An editorial on the mold problem at Summer Hood, Lindalyn Kakadelis, the first time.
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