Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, July 17, 1994 TAG: 9407180129
SECTION: BUSINESS PAGE: F1 EDITION: METRO
SOURCE: Sandra Brown Kelly
DATELINE: LENGTH: Long
Here's a little history. Tultex Corp. is one of Martinsville's largest employers, with between 2,000 and 2,500 workers. The other Tultex facilities, including a Roanoke plant, aren't involved in next month's vote, but all total the company employs about 6,000 in Virginia, North Carolina, Indiana, Massachusettes and Jamaica and has contract operations in Mexico.
The company makes and markets activewear apparel products - hats to sweatshirts - under the brands of Tultex, Discus Athletic, Brittania, Logo 7 and Logo Athletic and also produces private label items for Levi Strauss, Nike, and Gitano.
A subsidiary, Dominion Stores Inc., operates 47 retail stores selling surplus company apparel and/or first-quality items. In 1990, the company started up Tultex Canada Inc. as part of its expansion into international markets and, in 1993, it signed an agreement with Nissan Trading Co. Ltd. to market and sell Tultex products in Japan.
No Tultex employees are currently represented by union.
A vote for union representation, therefore, would be significant for Tultex. It also could be very meaningful for other nonunion textile companies in the Henry County area. And it would be especially sweet for ACTWU.
The textile union, which represents about 50,000 workers in the Southeast and 234,000 workers nationwide, has had an excellent past 18 months during which it added 14 new units to its camp. Among ACTWU's successful campaigns were those with workers at a Kmart Corp. distribution center in Greensboro, N.C., and the high-tech electrical computer technicians working for Electrical South in Greensboro.
But in four previous tries to organize Tultex - in 1979, 1981, 1989 and 1990 - the union was defeated. It lost the 1989 and 1990 elections by 250 votes each time.. The battles between the company and organizers were bitter and costly.
In its 1990 annual report, Tultex attributed spending $3 million, or 7 percent increase over 1989 in selling, general and administrative expenses partly to legal and consulting fees related to fighting the unionization effort.
The years since the last election have also taken their toll on the employees and the company. Both have seen their incomes plummet.
In 1989, Tultex had its worse year since it was founded in 1937. Net income was only one-fourth of 1988 income. Things improved in 1990, when the company opened an over-budget and overdue $60 million distribution center, and it reported $19.2 million in net income, more than double that of 1989. In 1991, net income dropped to $10.2 million, then blipped up to $13.2 million in 1992 before falling back to $5.9 million last year.
The Tultex board suspended dividends beginning in this year's first quarter after announcing a net loss for the quarter of $4.9 million or 18 cents a share. Tultex is expected to have another loss when second quarter figures come out later this month.
Late last year, Tultex began cutting hourly and salaried jobs and made severe cuts in benefits. The cuts even went to such things as changing guidelines for length of service required before an employee is given a party and a gift.
"An employee used to get a party and a gift after five years; now it's 15 years," a worker said.
With the cuts, an employee who used to make $9 an hour began to find it tough to make $7 an hour.
Tultex has always prided itself on paying premium wages; some of its workers made $13 to $15 an hour. It even included in its 1991 "Vision" statement a commitment that "employees will receive compensation that is above industry average."
Recent cuts, however, were designed to bring the employees down to industry average, said a Tultex official.
However, some got cut and some didn't.
Last week, the union passed out information that showed some Tultex workers - after a pay rate cut of $1.70 and the elimination of several bonus plans, including the Christmas bonus - will take home $5,658 less annually.
At the same time the union listed the "painful cuts of 1993" for the workers, the union pointed to stockholder reports that showed the top five Tultex executives have kept the same salaries and received additional stock options.
The top five executives made between $144,000 and $245,800 each in cash; there were no cuts in their salaries.
Top executives did feel a pinch in March when all salaried employees were required to take a cut in pay or purchase stock up to the value of 30 percent of their annual income. The stock purchase is spread over five years, however, so it doesn't severely change the executives' take-home pay.
This can't sit well with the average Tultex line worker.
In addition to the frustrations resulting from pay cuts and pay gaps, the Tultex workers are going into this election burdened by a community attitude that if they vote for the union they will hurt their hometown's future.
Frank Novakowski, executive director of the Martinsville-Henry County Economic Development Corp., was quoted in The Martinsville Bulletin saying that a pro-union vote will jeopardize the area's chances to attract employers or get companies to expand in the area.
An official of the Chamber of Commerce said workers don't need unions "as they once did." Former Mayor Allan McClain, said the union is "hitting Tultex when it is down, and it's dammably unfair."
Some might say it's unfair for these heavy hitter community leaders to load hourly wage employees with so much guilt.
Patricia Westwater, the College of William and Mary graduate who is the union spokesperson, refers to the Tultex situation as the "traditional model" of a mill town company where the owner looks after folks and everyone is happy until there is a change in how owners view employees.
Westwater says pay is rarely the main issue. It's "a lack of respect" and the conviction that management won't care, she said.
In a few weeks, a group of workers who might think they can't take any more or don't see that they have anything to lose will decide their future relationship with Tultex.
by CNB