Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, August 3, 1993 TAG: 9308030123
SECTION: BUSINESS PAGE: B6 EDITION: METRO
SOURCE: MARK FOLK LANDMARK NEWS SERVICE
DATELINE: LENGTH: Medium
\ Fieldcrest Cannon Inc. on Monday completed a $140 million sale of its carpet and rug division, a move that is expected to prod selection by the company's directors of a bidder to take control of the giant textile maker.
Sale of the rug and carpet division was to Mohawk Industries Inc. of Atlanta.
It followed agreement Sunday by the Amalgamated Clothing and Textile Workers Union to a new contract with Mohawk for 400 workers at the Eden, N.C., plant, which operates under the Karastan brand name.
Mohawk agreed to settle several union complaints against Fieldcrest, including giving workers back pay of 1 percent from January 1992. That was when the union accused Fieldcrest of giving higher wage increases to workers in non-union plants in an attempt to discourage union activity.
Meanwhile, about 160 employees in the Greensboro headquarters of Fieldcrest Cannon's former carpet and rug division are awaiting word on whether they will lose their jobs or be transferred.
So far, about 12 management jobs - including that of Jack Riley, president of Fieldcrest's carpet and rug division - have been eliminated.
Most headquarters employees will be offered transfers in the next three months to operations in Eden, Calhoun, Ga., or Atlanta, Mohawk President Don Mercer said in a statement.
More management jobs could be eliminated in the future, said John Swift, Mohawk's vice president of finance.
Mohawk plans to run the 10 former Fieldcrest carpet and rug plants at full capacity and possibly expand them, Swift said. The division employs 2,500 workers, including about 1,050 in North Carolina at plants in Eden, Greenville and Laurel Hill.
The plant jobs are safe for now, but the "economy can always change things," Swift said.
No news had surfaced by late Monday on the sale of Fieldcrest Cannon itself, which has been on the selling block for months. Fieldcrest still operates a bedding division and is the nation's largest maker of towels, with a mill in Henry County, Va.
It is believed that Fieldcrest's own management could try to use money from the Mohawk sale to finance a buyout bid for the company.
Bidding for Fieldcrest has been kept under wraps. Smith Barney Harris Upham & Co., a New York investment bank, is handling the process for the Dumaines Trust, which controls Fieldcrest, and reportedly is negotiating with top bidders.
Besides Fieldcrest management, insiders have identified top bidders as Springs Industries of Fort Mill, S.C.; Apollo Investors, a New York investment company; and Bibb Co., a Georgia textile manufacturer.
by CNB