AN OPEN LETTER TO PILLOWTEX EMPLOYEES AND THEIR FAMILIES
From Michael Gannaway, Chairman and CEO, Pillowtex Corporation
There is no easy way to communicate the disappointment and sadness that surrounds our need to close the doors to a Company with a proud and distinguished history. Since joining Pillowtex I have been working with a management team dedicated to finding the best possible outcome for the Company’s future. Our management team and employees have made extraordinary contributions as we attempted to avoid this unfortunate outcome. In the end we are faced with our worst-case scenario. I want to personally thank each Pillowtex employee for years of loyalty and service and assure you that this decision was not reached lightly and without deep regret.
Pillowtex is a large and complex business, and the process of exploring alternate strategies is complicated. We explored various plans focused on preserving Pillowtex as a stand-alone entity by changing our business model, but the costs to implement those changes were enormous and in the end we were not successful in securing the substantial investments needed to carry out any of those plans. We also tried to arrange for a sale of our business to a more financially stable company that could keep some of our employees working, but despite our persistent efforts, terms for a mutually acceptable agreement could not be reached. I assure you that this final outcome was accepted only after an exhaustive review of all alternatives.
The textile industry is facing unprecedented increases in global manufacturing capacity combined with softening demand in a tough retail environment. For well over two decades the U.S. textile industry has been under constant pressure to reorganize while facing fierce competition from overseas manufacturers. Cheap imports are flooding the U.S. market and driving down prices, while global sourcing has created a new business model for textile companies that we are unable to replicate without substantial investments. These trends are being seen nationwide and have created a marketplace where we can no longer offer our customers the merchandise they need at prices that are profitable for this Company.
As we move ahead we are making it a priority to coordinate assistance for our employees. We have met with numerous local, state and federal officials in an effort to explain our situation and research emergency worker assistance options. In the coming days, the Departments of Labor and their Rapid Response Teams will be providing unemployment benefits information directly to employees. Human resources representatives will be working with the Rapid Response Teams to help with individual needs.
We understand that in difficult times such as these, access to information is critical. Up until today we have been unable to publicly comment on the details of our situation. Publicly commenting on rumors and speculation, or even providing updates on specific scenarios being explored, threatened to drive away potential investors and partners. In addition to jeopardizing sensitive negotiations, commenting on private discussions risked violating Fair Disclosure regulations and misinforming the public about our intentions and possible future outcomes.
We are committed to helping each employee by providing updates on available resources. We have established a toll-free hotline with a recorded message containing current information about benefits, rapid response team meeting schedules, and other issues we want to communicate or explain. That number is 1 – 800 – 476 - 5021. We encourage each employee to refer to the hotline for information and will regularly update the message with any new information.
In addition, we will be using the Pillowtex Web site at http://www.pillowtex.com to post updates and a list of questions and answers about this and future announcements. The site also has links to federal, state and community organizations that may be able to provide you and your family with assistance if needed. An e-mail address has been established for you to submit any specific and urgent questions. Human resources personnel will regularly check messages and respond to your inquiry as soon as possible.
This has been a challenging year for all of us. Each individual employee is a part of this company’s great history, and it is profoundly sad to witness the end of its operations. I want to thank you for your service.