War Breaks Out in ‘Hostile Textile Country’
WAR STORIES By Phil Cohen
For over a century, Cone Mills was an iconic denim manufacturer, spinning bales of raw cotton into yarn which was then woven into enormous rolls of cloth. Once the material had gone through the final stages of finishing, it was sold to large jean companies. Levi Strauss was their largest customer.
During the early 1980’s, Cone had twelve mills sprawling across the Carolinas, five of which were represented by the Textile Workers Union of America. By the time I was assigned to help run an internal rebuild in 1990, foreign competition had closed half the plants, leaving three union facilities with a combined total of 4,000 workers. The TWUA had entered into a merger forming the Amalgamated Clothing and Textile Workers Union (ACTWU).
Textile workers formed a distinct subculture within the Old South. Many could only read at a third-grade level but were highly skilled at running specific types of machinery. Unions were perceived as an alien incursion into their tight-knit culture and achieving fifty-percent membership was a milestone few locals ever reached. Employers passionately resented unions which they had hoped to avoid by building plants in the South, and never missed an opportunity to undermine our presence. Arbitrators often referred to the South as hostile textile country.
Cone management never actually tried to bust its union locals, but rather utilized sophisticated techniques to marginalize their influence at every turn. When I showed up, the membership at all three organized plants stood at thirty-percent. It took a bitter three-year fight to break management’s stronghold on workers, enforce their rights and implement significant economic gains. We leveraged the company to a precipice where they began realizing it would be a good business decision to work with the union rather than persist in an ongoing labor dispute.
Shortly thereafter, ACTWU merged with the Garment Workers Union to form UNITE (currently Workers United.) I remained permanently involved with Cone Mills, negotiating contracts, doing arbitrations, and sometimes servicing the 2,500 workers at the White Oak plant in Greensboro. Their personnel director was Stahle Vincent; a tall, broad-shouldered man who’d once played minor league baseball and was one of the few Black people rising to prominence within the racist environment of Southern textiles. As our common enemy was offshore competition and free trade agreements, he slowly realized the union would make a better ally than adversary.
By the dawn of the 21st century, NAFTA and the World Trade Organization had decimated the American textile industry. Cone Mills was reduced to two denim plants with downsized workforces: White Oak with 600 hourly employees and a nonunion mill in Rutherford County with 350. Stahle Vincent had been promoted to Corporate Vice President of Human Resources but still worked out of his White Oak office.
Though the vast majority of domestic cotton mills were closed, Cone dominated a niche that allowed its continued survival on a more limited basis. The newly built third-world factories produced commodity grade denim for making affordable jeans worn by the average customer. Cone had developed expertise in manufacturing value added denim, targeting an affluent clientele who didn’t care how much they spent on designer clothing with a prestigious label. Offshore mills were incapable of competing when it came to high-end quality.
During March 2003, I successfully concluded a vicious year-long fight against an illegal decertification attempt at a Kmart warehouse. I’d been obliged to direct this campaign while simultaneously servicing several other locals and was utterly burned out. I cashed in all my unused vacation, disappeared for eight weeks and returned desperately hoping the rest of the year would be relatively uneventful.
The three-year collective bargaining agreement at White Oak was expiring on June 30, and I began preparations by sending information requests to Stahle and meeting with the 30 officers and stewards of Local 1391. Horace Tarpley had been on the shop committee for 30 years and served as president for 15. He was not only an effective representative but had the strength and presence of mind to stand up to his own members and stewards when they became disruptive. Everyone on both sides of the table respected his mature leadership. I anticipated an amicable round of negations as had become the norm in an increasingly productive relationship.
Despite Cone’s strategic position in the rich yuppie jean market, the company continued to suffer economically and filed for bankruptcy. It had actually turned a profit in 2002 for the first time in several years but claimed to be overwhelmed with debt. The newspaper headlines were dominated by stories of major shareholders about to lose their entire investment, fighting the company even more viciously than the union on its most militant day. Normally, the filing would have resulted in a corporate restructuring while the mill continued to operate. But to everyone’s astonishment, venture capitalist Wilbur Ross entered the game and offered to buy Cone Mills for $90 million.
Ross was a former United States Secretary of Commerce who became a Wall Street legend buying distressed companies and making them profitable. As the remnants of domestic textile manufacturing crumbled into ruins, he had a vision of salvaging the industry through strategic mergers and reorganization. Given his track record, this wasn’t to be taken lightly. Ross had an unusual quality for a member of the leveraged buyout crowd: he not only wasn’t anti-union, but believed in working with unions to save jobs. He’d purchased other failing UNITE plants and had a good relationship with the union’s President Bruce Raynor.
White Oak had a shift arrangement common among spin and weave mills. The majority of workers were divided into four twelve-hour shifts running day and night: Monday through Wednesday, and Thursday through Saturday. Every other week these shifts also worked on Sunday and, per the union contract, were paid double-time. The remaining employees worked standard five-day weeks on three eight-hour shifts but were also entitled to this premium when required to work Sundays.
The next step in the process was membership meetings, requiring seven separate shift meetings, round-the-clock for two straight days to make the discussion available to everyone. Most of the remaining Cone workers were there by virtue of seniority and were sufficiently realistic not to expect significant economic gains from a company facing bankruptcy. The bargaining committee had previously agreed to my suggestion that we start out with meaningful economic proposals and subsequently trade them for improved contract language, replacing antiquated textile provisions and bringing our agreement fully into the twenty-first century. The majority of union members at the shift meetings understood the wisdom of this strategy but there were always a few perpetually driven by rage and paranoia.
“All this talk about bankruptcy, just a bunch of bullshit to make the union back down!” said a middle-aged woman wearing a white head covering often used by female employees to protect their hair from cotton dust. “This company still making money hand over fist. I see all those damn rolls of cloth going out the door every day! I say we fight them and don’t back down ‘til we gets us a dollar an hour raise each year!”
Several workers greeted this fiery rhetoric with applause and began talking among themselves. Before I could intervene, Horace rose from his seat and addressed the membership. “You all need to grow up and face reality,” he said in a loud, stern voice. “Do you want to shut down this mill permanently? Some folks in this room are only a few years away from retirement!”
The few disclaimers immediately grew quiet without resentment, respecting their president’s authority and wisdom. It was an impressive display of leadership I’d witnessed many times over the years and spared me the task of restoring order. It presents a far better image when a local union can enforce its own sense of discipline.
Stahle was tied up in meetings and court proceedings regarding the bankruptcy and proposed sale to Wilbur Ross. The first bargaining session therefore wasn’t scheduled until June 19. During the interim, Horace and I met with Corporate President John Bakane to discuss both the bankruptcy’s implications on economic negotiations, and questions raised by employees about whether their retirement and health care benefits remained secure.
Bakane was always impeccably attired and exhibited a calm, rational demeanor. He’d long since accepted the union as an important player within Cone Mills and we were comfortable with his lack of animosity and level of candor. The top executive was quick to reassure workers about the stability of their benefits due to underwriting by the government and/or contract language. But the conversation became more complicated when it came to money. Bakane complained that White Oak’s labor costs were excessive and surpassed those in Rutherford County. He emphatically stated that Cone needed to reduce its operating costs by $900,000 to remain profitable.
Having received the necessary foreshadowing of negotiations, I sent a detailed information request to Stahle, asking for a comparative analysis of labor costs versus revenue in both plants, and the percentage of total operating expenses generated by labor.
On the morning of June 19, I entered the Cone conference room and took a center seat on the union’s side of the long, oval shaped table, flanked by Horace and seven other bargaining committee members. Following a brief discussion and with their permission, I crossed the hallway to touch base with Stahle. He assured me the bankruptcy was on the road to approval, meaning the plant would remain open. Discussions with Wilbur Ross remained productive but several matters still required resolution.
I updated my folks and a few minutes later we were joined by Stahle sitting across from me, accompanied by the plant manager and several key department heads. Initial bargaining sessions generally involve a broad-strokes discussion of both party’s needs and priorities, with proposals presented at the next meeting. But the writing on the wall was already in 48 point bold red letters and I decided to enter the game proactively with a list of ten opening proposals that would have been considered reasonable under normal circumstances. The union asked for a substantial general wage increase each year of the contract, modest benefit improvements, and several language revisions.
“How would you define a substantial wage increase, given our situation?” asked Stahle.
“It’s your money,” I responded, “and wages are a comparatively small percentage of your operating costs. How much are you willing to spend so Wilbur Ross inherits a group of satisfied productive workers?” We adjourned on that note with the next meeting set for June 26.
I sent Stahle an additional information request, “in order to further assess the Company’s economic posture during contract negotiations,” focusing on details associated with “manufacture of a yard of denim” at both White Oak and Rutherford County, including overall cost, labor cost, profit generated, and number of yards produced in the past year. In a separate document, the union asked for the annual compensation of Cone’s five top executives. We were entitled to all this information under federal law. I was slowly building a platform documenting that labor costs accounted for a relatively small percentage of the company’s financial distress.
The June 26 negotiations shed little light on where we were headed. Stahle emphatically rejected all of the union’s economic proposals, calling them “irresponsible” while the company was filing for bankruptcy, but said Cone was not yet in a position to make a counter offer. We ended up spending two hours debating the newly-imposed cell phone policy: employees observed even briefly checking their phones during working hours were now subject to discipline, placing an unreasonable burden on those who might need to respond to emergencies involving children at daycare or sick family members. Stahle responded that the company wasn’t interested in any policy changes during this period of transition.
Cone Mills engaged in the textile industry tradition of closing for the first two weeks of July, so the next meeting couldn’t be scheduled until July 17. Stahle and I signed a memorandum at the table, extending the contract expiration to August 1.
Part II Coming Soon—The Cat’s Out of the Bag