Avondale Mills to close doors

Philip Lord

Tuesday, May 23, 2006

Stephen Felker Jr., manager of corporate development for Avondale Mills, talks with reporters outside the Graniteville mill Monday after company officials told employees they planned to close all of its mills by July 25.

Avondale Mills announced Monday it is closing all 18 of its plants and laying off some 4,000 people as a result of the impact of the Jan. 6, 2005, Graniteville train derailment.

Stephen Felker Jr., manager of corporate development, said the decision to close the textile company that traces its roots to its founding in 1845 was announced to managers during a 9 a.m. meeting held in Alabama, Georgia, North Carolina and South Carolina. From there company employees were notified during meetings throughout the day.

Avondale Mills, which merged with the Graniteville Company in 1996, employs approximately 2,000 people in Aiken County, Felker said. All of those employees will see their employment terminated as of July 25.

“We wanted to give our associates as much notice as possible,” said Felker, who added his family has a five-generation association with the company. Stephen Felker Sr. is currently CEO of the company.

Felker Jr. said Avondale Mills had a long-term business plan in place and had positioned itself to compete in the global marketplace with importers like China before the train derailment occurred.

“We saw changes in it (the marketplace) taking place for some time,” Felker Jr. said. “We had positioned ourselves for those changes as best we could. We didn’t foresee the impacts that were beyond our control.”

Rep. James Roland Smith, R-Warrenville, said the news means the Graniteville community has been struck by tragedy once again.

“There are so many people there that that is all they know. This is all they have ever done,” said Smith, who is chairman of the Aiken County Legislative Delegation.

Smith added, “It means we have really got to do some double time to get some jobs in here.”

Looking beyond the jobs impact of the closings, Aiken County coffers will take a hit if the Avondale Mills plants are simply locked up with equipment inside of them, said Aiken County Administrator Clay Killian.

Last year Avondale Mills paid $973,500 in personal property taxes, which covers the equipment inside the plants, and an additional $583,000 in real property taxes, which covers the buildings themselves, Killian said.

If equipment from inside the plants is sold, the Aiken County Board of Education, which gets two-thirds of the money, and the County, which gets the rest, will get something, Killian said. On the buildings themselves, Killian said if the mills are no longer “a going concern,” the assessment changes to a much lower figure.

In a letter handed to associates during meetings, Felker Sr. said the company simply could not emerge from the damage and lost production time suffered as a result of the train derailment and chemical spill that killed nine people.

“The textile business has been difficult for several years,” Felker Sr. wrote in his letter to employees. “However, until the tragic derailment on January 6, 2005, I was confident of Avondale’s ability to be a part of the future, even if others failed. The train disaster and chlorine spill caused more financial and operational damage than our company could withstand.”

He added, “Chlorine works like a cancer that eats away at metals and electronics and even plastics, both on the surface where you can see it and below the surface, out of sight. In addition to the human tragedy, the financial impact of higher costs, lost business and severely damaged equipment and plants is greater than we can endure. We worked hard for a year and a half to recover, but the damage is too great. Without the train derailment and chemical spill, we were challenged. With it we were destroyed.”

Looking back at the company’s recovery effort, Felker Sr. said the company did its best to overcome the tragedy. “Looking back, I cannot now think of what Avondale could have done differently to better overcome the railroad disaster. All I can do now is wish for my associates and friends the best the future can bring.”

Norfolk Southern Railroad spokesman Robin Chapman said Monday his company could not discuss the Avondale closure or the claims made by the company’s leader.

“Because of the suit by Avondale, we really can’t comment on it,” said Chapman.

Currently Avondale Mills is suing Norfolk Southern in an effort to receive some relief from the damages suffered as a result of the collision that saw a train leave the main line through Graniteville and strike a train parked on a siding rail.

The National Transportation Safety Board has ruled that human error on the part of the local crew that parked the train on the siding rail and then forgot to return the switch to its main line position caused the accident.

As a result, the three members of the local crew from Augusta were fired and changes in the operational procedures for railroads have been recommended.

“The unbearable loss of the nine souls who perished in that awful event is now compounded by the loss of employment by over 2,000 relatives, friends and coworkers they left behind,” said Sen. Tommy Moore, D-Clearwater.

Questioned about pensions earned by Avondale Mills employees, Felker Jr. said no firm decision on those benefits have been reached. “I really can’t speak to that right now,” he said.

Felker Jr. said some of the Avondale properties could be purchased by another company and continue to operate, but no such deals had been struck as of Monday afternoon.

Contact Philip Lord at plord@aikenstandard.com