The Greenwood Mills company is an old, South Carolina outfit under siege because, of course, nobody can make money in textile manufacturing in the U.S. anymore, as we have all been told over and over and over and over again. In dire straits, the family owned company went outside the clan and hired a real pro to straighten things out. Not a manufacturing expert, mind you – no need for a manufacturing guy to straighten out a manufacturing company since textile manufacturing is no longer possible in the U.S. – no, they brought in a turnaround guy from a high powered gang called Anderson, Bauman, Tourellot, Vos & Company.
The boys from ABTV & Co are great strategic thinkers, and one of their own penned an article explaining just what it takes to get an old South Carolina textile manufacturer into the fast lane. The title of the article is impressive all by itself: "Smart Textiles and Smart Strategies Are Key To Industry Survival". The ABTV recipe is (1) Outsource Production "because it is impossible for US textile firms to compete in high volume price sensitive categories"; (2) Tighten Supply Chain Logistics (Presumably because production has been outsourced so herding the textiles all over the globe can be tricky); (3) Practice Strong Branding (To create the illusion of value even if reality may be otherwise – "quality is not enough" say the boys at ABTV); (4) Go after ‘smart textiles’ through nanotechnology (Goes without saying – who would want to be seen wearing a pair of blue jeans without embedded nanotechnology?); and (5) Explore non-woven product technologies (In other words, find a different line of work).
So the Greenwood Mills folks turned the company over to the turnaround guy hell bent on outsourcing and nanotechnology blue jeans, and he promptly closed down a couple of Greenwood Mills plants, and began muddling around in Mexico (Remember, the ABTV wizard knew – as we all do – that it is impossible for US firms to compete.)
Apparently the copy of the ABTV article sent to Michael Rickman got lost in the mail and he turned out to be one of the few guys in the state of South Carolina who didn’t know that it is impossible for US firms to compete in textiles. He is the president of a company called Liberty Denim, which is a bunch of similarly ignorant folks who got together and bought one of the plants the turnaround hotshot closed. They hired another guy too dumb to know any better to run the plant named Charles Abbott, who promptly hired back all of the old Greenwood Mills employees and started making denim again. A whole lot of denim, in fact, 50 million pairs of blue jeans worth, so far, and all without any nanotechnology in ’em.
Lucky for the uninformed guys at Liberty Denim, they stumbled across the buyers at VF, the company that owns Wrangler, Lee, Rustler and a bunch of other brands, who, as it turns out, were even dumber than the Liberty Denim guys. Instead of buying in Mexico and Honduras, which everyone knows is the only place to buy textiles, the VF buying nitwits bought all of that denim from the Liberty manufacturing nitwits, even though it was impossible for the US folks to compete with the folks in Mexico and Honduras.
The chain of stupidity continued all the way down to us customers and, by the time enough folks who didn’t know any better were lined up, the Liberty Denim people were paying out $5.5 million a year in payroll to American textile workers, and another $25 million a year to other South Carolina businesses, and the company is cranking out 350,000 yards of denim a week from the same plant the turnaround guy shut down. And all of this because there are so many people scattered around South Carolina too intellectually challenged to understand what the turnaround guys made so clear – it is impossible for US textile firms to compete.
The end of the story is that all of the Liberty Denim employees are going to have a big party this weekend, with music and hot dogs and Dale Earnhardt Jr’s NASCAR car that Wrangler sponsors, and VF will be there to give everyone a pair of Wrangler jeans, and Liberty is giving them all a tee shirt, and the whole thing is going to be a grand celebration of just how much people can accomplish when they don’t know what they are doing is impossible.
Over at Greenwood Mills, the family owners decided that maybe they were just mismanaging things and they they have quietly thanked the turnaround guy and sent him on his way and they have regained family leadership and it looks like they are going to try to do the impossible themselves. I don’t know how they are doing – OK so long as they stay away from nanotechnology, I imagine – but I am sure they rue the day they got so much smarter than the folks at Liberty Denim.
AWilhem says
Don’t be too certain they’ll do OK, Bill. The new company president has an MBA ;-)
Bill Waddell says
I understand your concern, Al, but don’t let the word “University” in a school’s name let you confuse it with a real college. For instance, I went to the “University” of Cincinnati, but everyone knows that UC is a common sense sort of place for people like me who are not nearly bright enough to get into Harvard or Wharton or one of the real colleges where great business thinkers go to think great business thoughts. The President of Greenwood Mills got his MBA from the University of South Carolina, which is a lot like Cincinnati – a glorified trade school that prepares people to actually work for a living, rather than strategize their way to fame and fortune.
Eric H says
Bill;
I was once told by a Harvard grad that what they get is more than an education, they get “personal development growth”, which us little people can’t get at whatever backwater degree mill we went to.
This is a great post, and I’m glad the simpletons at Liberty Denim haven’t learned yet that they can’t make it in the US. Of course, Kathleen can list dozens of companies that have yet to see the light. Hurrah, ignorance!
Willard Ferguson says
Most Harvard and related grads have never gotten their hands dirty nor have they held jobs in which they could have gained experience at real work. It is much easier to write a paper on outsourcing to a cheaper labor country. What happened to JIT or cost of transportation?
JIm Bob says
I think this could be just about one of the best written pcs about our US textile business.
We are also “so stupid” we have over 300 employees in our Fox Apparel plant in Asheboro NC and Yes we are going to “Put the Petal to metal” (well half way to the floor) with our TEXAS JEANS line which happens to be the Last American Jean company that buys everything from Fabric to labels from US Made firms and Yes we make every pair right hear.
We have been downsized with the TexasJeans line due to a 5 year US Army contract making the new ACU pants. Now we find that China and others are SLIPPING these into stores around the bases. It appears that some of our troups might just be wearing uniforms made in China.
Stay tuned, Lou Dobbs!
TexasJeansUSA
Bob says
Mill closing forces 250 out of work
LIBERTY — Liberty’s denim mill might be shut down again, putting 250 people out of work, if the new owners of the Pickens County mill decide the estimated cost of $1 million to upgrade its sewage discharges is too high, general manager Charles Abbott said.
The Greenville News reported Abbott’s comments at a hearing in Liberty Thursday. About 50 people attended the hearing held by the S.C. Department of Health and Environmental Control.
The Liberty plant had 325 employees before Greenwood Mills shut it down in 2002. Investors reopened it later that year.
Bob says
http://www.thestate.com/mld/thestate/16048107.htm
Brendan O'Malley says
I loved your story of Liberty Denim. We can draw (at least) two conclusions: (1) There are huge benefits to be gained by focusing on what your customers want, by developing efficient and effective business processes, and by thinking for yourself about how to keep improving what you do; (2) As well as a few great thinkers and teachers out there, there is no shortage of hucksters peddling the latest idea du jour and stuffing whatever companies they are allowed to mess with into the straghtjacket of their one-dimensional worldview.
What I’d really like to understand is what the Liberty Denim people actually did to transform their business. Whatever it was seems to have been very effective, so it would be great to know more.
William Sherman Pinkston says
I worked for Greenwood Mills in the wet processing in the Tennessee plants all of the greenwood plants could have made money but we were told daily that we were not going to make a profit.that every plant was going to end up in mexico.we lost the Greenwood spirit to be a winner. the Self family needs to follow the GRAND FATHER.read the character of quality follow what James Cuthbert Self taught you.
Lynn says
I would like to know what is being done with Liberty Denims sewage problem, if anything or is it going to be another Saco Lowel thing to harm people.