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Pillowtex Lays Off 740 Workers

December 4, 2000

KANNAPOLIS, N.C. (AP) _ Pillowtex has laid off about 740 workers at its Fieldcrest Cannon plants in Salisbury and Kannapolis until Jan. 3 while it gets rid of excess inventory.

The three mills have been idle for the past two weeks and when employees reported for work Sunday, company officials told them the three mills would remain closed until January.

Executives said the closing was unrelated to Pillowtex’s Nov. 14 filing for Chapter 11 bankruptcy protection.

``This probably would have been just a blip on the radar screen last year,″ said Don Mallo, company vice president of human resources.

Mallo said the company wanted employees to know that the closings were not because of the bankruptcy filing and decided to talk to workers in person rather than call them on the telephone.

Company officials did not quantify the amount of excess inventory but said they hoped sales through January would clear the surplus.

Workers at the three mills won’t be paid for December but will receive a Christmas bonus of one week’s pay. The company also will pay employees an additional two weeks of salary when they return to work in January.

Pillowtex agreed to pay the additional two weeks after negotiations with the workers’ union, the Union of Needletrades, Industrial and Textile Employees, UNITE district manager Richard Resua said.

Almost 15 percent of Pillowtex’s 5,000 workers in Cabarrus and Rowan counties have been idled.

The company is one of the nation’s top three home-furnishings makers and has struggled for more than a year because of computer conversion problems, weak sales and debt from its 1997 purchase of Fieldcrest.

Despite the assurances that work will resume next year, employees were nervous about their future because of the bankruptcy filing, said union officials.

``I think people are panicked,″ said Mark Pitt, UNITE southern regional director.

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