Long-dead Pillowtex reborn as unlikely issue in U.S. Senate race in Georgia

07/21/2014 9:07 AM

07/22/2014 5:52 AM

The fate of Pillowtex, the long-dead former textile giant in Kannapolis, has resurfaced as a key issue in Georgia’s U.S. Senate race, of all places.

And like North Carolina’s contest, what happens in Georgia could help determine which party seizes control of the Senate this fall.

Georgia’s tight Republican primary runoff on Tuesday pits veteran U.S. Rep. Jack Kingston against business executive David Perdue, the next-to-last CEO at Pillowtex.

Several months after Perdue left the long-troubled company, it abruptly shut down on July 30, 2003.

It wiped out 7,650 jobs nationwide, including more than 4,000 in Cabarrus and Rowan counties – the biggest one-day job loss in the history of the state and the textile industry at the time.

Perdue, a political novice and the cousin of Georgia’s former governor, touts his private sector successes as an antidote to career politicians like Kingston. But Perdue’s website biography skips over his brief Pillowtex tenure.

Absent a lengthy voting record to pick apart, Kingston needed to go after Perdue’s business history, said Alan Abramowitz, a political scientist at Emory University in Atlanta. That’s what President Barack Obama did to Mitt Romney.

But it’s unclear how much the issue of an out-of-state company is resonating with Georgia voters. “The problem for Kingston is that this was not a Georgia company,” Abramowitz said.

Perdue at Pillowtex

Indeed, Pillowtex was a North Carolina mainstay for more than a century.

Its iconic 200-foot-tall twin smoke stacks towered over downtown Kannapolis. And it wasn’t unusual to see several generations of families work in the mills for Pillowtex and predecessor companies Cannon Mills and Fieldcrest Cannon.

When the company finally collapsed, Pillowtex leaders and politicians were quick to blame pressure from low-cost imports for the downfall. But a 2004 Observer series detailed a more complex picture: A changing roster of top leaders over its final three years made critical miscalculations at the debt-heavy company or squandered chances to address the growing import problem.

Perdue, credited with helping lead a turnaround at Reebok, arrived at Pillowtex in July 2002 with the chance to run one of the nation’s biggest sheet-and-towel manufacturers.

He came with big plans for a company that had recently emerged from bankruptcy protection, including aggressively marketing its brands and sending more work overseas.

But within weeks, Perdue began questioning the company’s rosy financial projections that were used when exiting bankruptcy.

Perdue later felt the information he received from the company before joining Pillowtex did not reflect the extent of its problems, the series found. That included Pillowtex’s underfunded pension plan, which required tens of millions of dollars the company did not have.

Perdue unsuccessfully tried to get company investors to provide more money, then worked to find a buyer for Pillowtex.

His frequent absence from the Kannapolis headquarters “was terrible for morale. We felt he’d given up on us,” an internal auditor told the Observer for its series. Others called him “Oz” behind his back, a nod to the seldom-seen wizard.

Nine months after he started, Perdue resigned in late March 2003 after earning nearly $1.7 million in salary, bonus and signing bonus, the series found. He soon became CEO of Dollar General, a Fortune 500 company.

Pillowtex refiled for bankruptcy four months after Perdue left and closed for good.

Babies and ad wars

In May, Perdue topped a seven-person field in the Republican primary with nearly 31 percent of the vote; Kingston came in second with 26 percent.

The runoff race remains close, said professor Abramowitz, who expects very low turnout on election day. The winner faces Democrat Michelle Nunn in the fall.

The ad wars typify the tough rhetoric of the GOP contest.

Perdue ran an ad in the primary showing his opponents as crying babies, with Perdue saying he wanted to change Washington’s childish behavior.

Kingston later ran an ad with a young child named “Davey” in a full diaper, stuffing his face with cake as a narrator intoned, “Perdue chewed up businesses. Eight thousand jobs were lost ... David Perdue. Something doesn’t smell right. ...”

The ad, and another one making similar claims about Perdue “ mismanaging Pillowtex,” were faulted by FactCheck.org and PolitiFact Georgia, The Atlanta Journal-Constitution’s independent, fact-checking arm, for inaccuracies.

Kingston spokesman Chris Crawford said Monday that the campaign sticks by the ads. He said it was fair game to examine the business record that Perdue has based his campaign on, and his claim he has a knack for turning things around.

“If you ask the 7,650 Pillowtex employees, they’d tend to disagree with that,” Crawford said.

Perdue spokesman Derrick Dickey said the ads were typical of a career politician. Perdue went to Pillowtex to do everything he could to help, Dickey said, but later found there were things beyond his control.

“He was proud he took a challenge and did the best he could under the circumstances,” Dickey added, saying Perdue’s lengthy private-sector experience has prepared him to go to Washington and focus on the economy and jobs.

Not everyone’s convinced.

Kannapolis resident Diane Winecoff, 68, worked at the mill for about four decades, and was a fabric print inspector when it closed.

“It’s kinda weird for it to be (an issue) in Georgia,” she said. “If I lived in Georgia, (Perdue) wouldn’t get my vote. He didn’t stand up for his people.”

Perdue repeatedly defended his time at Pillowtex.

He recently told The Associated Press that what happened at the company was tragic, adding, “My parents raised me to be the kind of leader that runs toward the burning building to try to help instead of running away from it and sitting on the curb and criticizing those that are trying to make a difference.”

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