The Triumph of Dawson’s Textile Workers
Left without jobs when their mill closed down, Georgia textile workers formed a co-op and re-opened it as its new owners
Catherine Merlo
Editor
Most of the 200 employees who were laid off when the plant closed
down are now back at work in Dawson, Ga.
(Photos by La Shinda Clark)
For 31 years, the people of
tiny Dawson, Ga., depended on Almark Mills for jobs.
The fabric cutting and sewing plant employed as
many as 900 people during the 1980s, turning out finished products for such well-known
brand names as Ralph Lauren's Polo, Sara Lee Underwear and Hanes. And though the number of
workers dropped to 200 by the mid-1990s, Almark Mills remained the third largest employer
in Terrell County, where Dawson (pop. 5,300) is located.
All that, however, came to an abrupt halt in
early October 1997, when Leeds Manufacturing Co., the New York-based company that bought
the plant a year earlier, defaulted on a $770,000 loan. The owners abandoned the mill,
leaving 200 people without jobs.
But just two months later, a remarkable
turnaround was made. The padlock chains that had barred entry to the plant were removed
and the plant was back in limited operation. This reversal of fortune was made possible
thanks to a concerted community effort and financial and technical assistance from USDA
Rural Development and other agencies. The former employees of Almark Mills are the new
owners of the textile plant and have put the operation back in business.
How the employees of the Dawson Workers-Owned
Cooperative (DWOC) reversed their fortunes, formed their own co-op and re-opened the mill
is a success story that has left even the participants still catching their breaths.
"We all have a new attitude toward
life," says Dianne Williams, DWOC's board chairperson, who has worked at the plant
for 29 years. "We can now say, 'We own what we do. 'For us, the future is bright
because we have something to look forward to. We never thought we would become owners of
anything."
| "Persons in this community doubted that women and minorities could make this work where it hadn't succeeded before," says Robert Albritten, the mayor of Dawson. "But we've made believers out of them." |  |
"The new owners have pride and
determination, they've become somebody," says Gregg White, Cooperative Services
coordinator for USDA Rural Development in Georgia and South Carolina. "Their dreams
can come true."
Desperate Days
In the days before Almark Mills closed, Marcus
Lemacks desperately searched for ways to keep the plant running. As president and general
manager of Almark Mills, Lemacks knew the company inside out, and the bleak picture facing
it.
Terrell County already had the third highest
unemployment rate in Georgia. Its 1995 per-capita personal income of $14,417 ranked 143rd
in the state. While farming peanuts and cotton was an important part of the local economy,
even those crops had diminished in the past five years.
There were a handful of other major employers
in Dawson: Tyson Foods (chicken), Dawson Manufacturing (rubber components for
automobiles), Cargill (peanut processing plant) and the Terrell County School System. But
most of the employees of Almark Mills had worked at the textile plant for 15-20 years.
Their job skills were limited to apparel manufacturing. There were no textile jobs in the
two closest towns: Albany, 25 miles away, or Columbus, 60 miles away.
"This is a rural community," Lemacks
says. "To try and find work would have been impossible. There are only so many jobs
in fast-food restaurants or stores. We had two choices: unemployment or try to retrain 200
people who averaged age 40."
And as is typical in the apparel industry, the
majority of the mill's work force was female. Women made up 76 percent of the mill's
employees. Most were black. A third of the women were single mothers. In fact, Almark
Mills had been the largest employer of women in Terrell County.
"If the mill had closed permanently, there
would have been 1,000 people employees and their families - affected directly," says
mayor Albritten. "Men there would have been several hundred more indirectly affected
through stores where people shop, bank loans, you name it."
He adds: "Once people are out of jobs, an
increase in crime can be expected. As a father of the community, I had to be
concerned."
The Trouble With NAFTA
Furthermore, Dawson and much of the U.S.
textile industry were facing another problem - the North American Free Trade Agreement
(NAFTA). While this trade pact has created thousands of jobs across the continent, some
localities - including Dawson - have been hurt by changing trade patterns.
"NAFTA has had a devastating effect on
Dawson," says Lemacks. "It just opened the floodgates for everyone to run to
Mexico and Canada."
The 1996 legislation removed trade barriers
among the U.S., Mexico and Canada. Before NAFTA, a manufacturer might ship its goods
overseas to take advantage of cheap labor, but it would have to pay a duty tax when the
goods re-entered the United States. With NAFTA, duty taxes and quotas were eliminated.
"NAFTA eliminated the duty tax, and that's
30 percent of the value added," says Lemacks. "Here in the United States, we
might pay employees an hourly rate of $8 per hour. That's competing with 35-40 cents an
hour in Mexico."
Terrell County had been identified as one of 11
Georgia counties suffering job losses as a result of NAFTA. Since the enactment of NAFTA,
Dawson's only other textile mill, Oxford Manufacturing Company, had closed down. Almark
Mills' business had dropped sharply and its labor force had shrunk to less than 200
employees.
"All the textile mills within a radius of
50 miles of Dawson have closed since NAFTA went into effect," Albritten says.
Not surprisingly, there were no private
investors interested in purchasing the Dawson mill.
Finding a new job wouldn't have been difficult
for Lemacks. He had 36 years in the apparel industry, most of it in management and
consulting positions ranging from marketing to industrial engineering. He'd worked at
Almark Mills for 16 years, where he was president and general manager.
But Lemacks couldn't let the mill and its jobs
- disappear. "When you work with a group for 16 years, you become like a
family," he says. "We have feelings for each other, know each other's
children."
Holding On
Marcus
Lemacks, president and general manager of Almark Mills, played a key role in getting the
textile plant back open.
By Oct. 3, 1997, Lemacks still had no
solution. That day, the Bank of Terrell took possession of the mill and sealed its doors
with a chain and padlock.
"The day the mill closed, I went home and
thought, 'Now what am I going to do? remembers Williams, who'd gone to work at the mill
when she was just out of high school.
Then, in a stroke of luck, Lemacks heard of a
small but successful textile operation in North Carolina that had restructured itself as a
co-op several years before. Through it, Lemacks first heard the name of Frank Williams of
the Boggs Rural Life Center, a non-profit organization in Keyesville, Ga., that helps
rural areas with economic development.
"I tracked him like a bloodhound until he
agreed to meet with me," says Lemacks.
He and mayor Albritten met with Frank Williams
and learned what it would take to restructure Almark Mills into a worker-owned co-op. Then
they contacted Greg Garland, their local accountant, to put together a business plan. By
Oct. 6, they had formed the co-op, calling it Dawson Workers-Owned Cooperative. Employees
soon elected a board of directors.
Equally important, they found the equity they
needed to get emergency financing. For years, employees at Almark Mills had paid union
dues of $15 per month. Now, with the union dissolved, they voted to use that fund as their
equity investment.
"We really didn't know if we could pull it
off," says Garland, the Certified Public Accountant in Dawson who helped the mill
prepare its financial paperwork.
However, says Lemacks, "The one thing we
weren't short on was determination."
"We had a meeting and all the employees
decided this co-op was something that could work," says Dianne Williams, who was
elected DWOC's board chairman by a large margin. "What we had to sell - all we had to
sell - was our labor. We thought this could be great. I didn't even go look for another
job."
With their business plan in place, Lemacks and
his team applied to Georgia's Regional Development Center (RDC) for $150,000 in state
emergency funds to start the mill operating again. Furthermore, each of the 200 workers
pledged to pay $7.16 from future weekly paychecks (for a total of $1,500 each) until the
loan was paid off. That investment would represent each employee's share in the ownership
of the mill.
They waited for nearly a month to hear whether
or not they qualified for the funding. But they remained hopeful.
"Here we had a 147,000-square-foot
building full of equipment," says Lemacks. "I knew with all the experience and
contacts we had we could re-open the plant and make it a viable operation."
Good News
Finally, to their surprise, they got the
money, with the RDC check arriving on Nov. 27.
Lemacks and the people of DWOC were further
helped by Jack Tuck, the president of the Bank of Terrell, which held the note on the
mill. Tuck realized that keeping the mill open would benefit the bank as well as the
community. Tuck offered his support.
"Jack had a lot to lose if the co-op
closed down," USDA's White says. "His bank not only financed the textile
operations but it financed employees' homes and cars. If they lost their jobs, he would've
lost everything too. He took the risk."
"The whole time the bank had the mill
doors chained, I had the key to the building," says Lemacks. "Jack had given it
to me so I could go there and use the phone, the fax and the computer to get the
information we needed to put a business plan together. He was very kind to give me that
kind of access and was one of the first believers that this co-op could work."
In addition, the area's utility companies -
telephone, electricity, water - worked with Lemacks and the mill to keep those services
running with little more than a promise to pay.
White had a further idea for the Dawson mill.
"Saving jobs for the people of Dawson is a key issue," says White. "If
we're going to reform welfare, cooperative development is one of the key instruments we
need to use."
White began working through USDA channels to
see about DWOC's chances for securing a Business and Industry (B&I) loan guarantee
from the Rural Business - Cooperative Service, an agency of USDA Rural Development. Under
its B&I loan guarantee program, USDA enters partnerships with local lenders all across
rural America to help finance businesses that will create or preserve rural jobs.
Funding available through the B&I program
was expanded this year under the Community Adjustment and Investment Program (CAIP), the
Clinton Administration's plan to offset job loss in the United States due to NAFTA. Under
this program, USDA is authorized to make loans to businesses in up to 50 rural communities
adversely impacted by NAFTA.
White was certain that DWOC was more than
qualified for a USDA loan under the terms of CAIP. Applying for it would mean
submitting more financial and paperwork, including a new business plan. But the effort
might be worth it. White, Garland and the DWOC team went to work.
On Dec. 8, with RDC's $150,000 emergency
funding, DWOC resumed cutting operations with six to eight people. Then
machine operators were called in. By the end of December, 70 people were back at work in
the plant.
The Christmas holidays came and went, with no
heat inside the plant in an effort to cut costs. Lights were never left on unless someone
was in the room. The new owners had decided there would be no wasting of time or money.
"We didn't buy anything we didn't need,
only what was required to go in the cutting and sewing operation," Lemacks says.
The USDA Loan
Then, as winter was finally slipping away,
Lemacks received the long-awaited news: USDA had granted DWOC a $1.4-million loan
guarantee.
"That day, March 1, 1998, was the high
point of the whole process," says White.
The loan is the first made in Georgia to a
textile co-op. Its terms are 20 years at a 10.5 percent variable rate. CAIP funding was
made available through USDA, partnering with the Bank of Terrell to finance the loan. If
DWOC should default on the loan, the federal government would repay 90 percent of the
debt. The other 10 percent would be made by Tuck’s bank - after selling the plant to
recoup the loss.
"The loan to DWOC was a project that
represents the best of everything we have to offer," says Laura Meadows, Georgia
State Director for USDA Rural Development. "It means sustainable development for
rural Georgia."
With the USDA funds, DWOC immediately paid off
its $150,000 RDC loan.
"That was a happy day," Lemacks
remembers.
DWOC also bought the textile building and its
equipment. Tuck sold the mill for a price sufficient only to recover his losses from
Almark Mills.
"It was a very good purchase," says
White. "DWOC paid much less than the $3 million it was worth."
DWOC got an added boost when Georgia Power Co.
agreed to reduce the plant's power bill by 25 percent for two years.
"The way the community came together to
support this was amazing," says White. "I've seen other scenarios where people
walked away. The desire of this community to succeed and not give up was the best and most
encouraging thing from day one. They were fighting for their lives and their jobs.
Everyone, from the mill manager to the mayor of the town, was willing to do what it takes
to see that this succeeded."
Gearing Up for the Future
Today, DWOC roars to a start every day at 7
a.m., just as it's always done. Except that things are done a little differently now.
Employees bring their own coffee, paper towels and toilet paper to work. They don't take
vacations, collect benefits or receive raises.
But every sacrifice brings the 169 employees a
step closer to their dream of paying off their loan and becoming the free-and-clear owners
of DWOC. So far, their plan is working.
"The eagle still flies every Friday,"
says Williams. "We still get that paycheck."
Like the other employees, Williams handles a
variety of duties. She sews, inspects, checks quality, even sweeps and cleans.
"I will do whatever is necessary to get
the work out," she says.
 |
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| Bulah Deloney, a unit supervisor in the plant and co-op board member, prepares to sew pillowcases. | Mechanics Eddie Giles (right) and Joe Lewis Jones help keep the sewing machines humming. |
Among the employees, 25 have extensive
management experience, whether with Almark Mills or other mid-sized apparel firms. Ten
have engineering training and extensive experience in setting up and operating production
lines. The company bulletin board states, "One Employee-One Share-One Vote."
With the weekly payroll deduction of $7.16, it will take about four years for each person
to purchase a share. If an employee should quit, the funds will not be given back.
"Becoming the owners of this plant has
been a tremendous step forward," Lemacks says. "It shows the determination and
dedication of these members."
DWOC now produces sportswear and lingerie for
major U.S. retail chains, department stores and specialty retailers. (Lemacks won't
divulge the names of DWOC's customers.) The co-op ships the goods to distribution centers
or directly to customers.
"We are very versatile," says
Lemacks. "We didn't want to be a factory that made only one product because that
would limit us."
If all goes well, DWOC expects to increase its
sales by 50 percent next year, Lemacks says. Sales for 1998 are expected to reach nearly
$5 million, and $7.5 million for 1999. In fact, one of DWOC's management goals is to
become the largest sportswear-sewing contractor in the Southeast. The group plans to
continue to expand DWOC's labor force, with a goal of 350 employees over the next two
years. The co-op also plans to manufacture its own sportswear item with its own label in
the next year.
"All the worker-owners will have input in
that decision," Lemacks says.
"We have also pledged that if others can
use our expertise in forming a co-op, we'll help them," he says.
More To Learn
Still, there's a lot for the new owners of
DWOC to learn.
"Yes, they've made the transition from
employees to owners but now they have to realize what it takes to run a company,"
White says. "They've got to be aggressive, professional and innovative in management,
research and development, quality control, and efficiency. They've got to be to get those
name-brand contracts from the large corporations."
Most agree that learning to run a co-op will be
hard work. Much will start with the board of directors. DWOC's board consists of eight
directors, plus bank president Tuck and mayor Albritten as non-voting advisory members.
Garland, who donated much of his time to help develop the financials for DWOC's loan
packages, serves as the co-op's accountant.
"We want to get the board trained as soon
as possible to function with proper management techniques, so the organization will be
competitive in the world market," White says. "The board will set policy - the
road map - for this company. The employees are going to drive the car."
For board chairman Williams, DWOC's
transformation has meant new doors of communication among employees. "Before the
women were always worried the plant would close," she says. "Now I can tell them
anything they want to know. I will go as far as I can to get them an answer."
"This cooperative is giving people
investment and ownership where they have their destiny in their own hands," says
White. "They're in the honeymoon stage now. But when the honeymoons over, they can't
sit still. They'll have to get down to the nitty-gritty."
"We will succeed," says Lemacks.
"And when we do, we can be a model for others in the apparel industry to use to save
jobs in other communities and states. We want to be the brightest of the shining stars. We
realize there will be many eyes upon us. We will not falter and we will not fail."
Celebration
On March 31, 1998, an official celebration
was held at the DWOC plant to commemorate the rebirth of the mill. It was a sunny,
beautiful day in Dawson. The event was attended by more than 300 persons. To the disbelief
of DWOC's employee-owners, there were numerous federal, state and local officials and
politicians also on hand to mark the occasion. There was laughter, plaque giving and
applause. Jill Long Thompson, USDA Under Secretary for Rural Development, presented
Lemacks and Williams with an oversized replica of the $1.4 million loan check.
"It was an indescribable, glorious
day," says mayor Albritten.
"We were in an ecstatic mood," says
Lemacks. "We were happy, grateful. We had accomplished the first step toward climbing
some very tall stairs."
But perhaps nothing symbolized the celebration
or the new owners' pride more than one brief segment of the ceremony. In their hands, the
employees held the chain once used to lock the doors of their mill. Now the links had been
painted gold. In a jubilant moment, the new owners of DWOC proudly returned the chain to
bank president Tuck, who took it back with a smile. 
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