Chattanooga: Stowe closes textile plant; 350 here lose jobs

Chattanooga: Stowe closes textile plant; 350 here lose jobs

January 6th, 2009 by Brian Lazenby in Business

R.L Stowe Mills announced Monday the yarn mill will shut down and put about 550 people out of work, including 350 in the Chattanooga area, officials at the company said Monday.

The economic downturn made the closing inevitable, according to the Belmont, N.C., company.

"Business conditions in the fourth quarter deteriorated suddenly and dramatically," the company said in a statement. "Looking forward, management does not see sales returning to levels sufficient to sustain business."

Harding Stowe, president and chief executive, said there is no scheduled date for closure. The company will operate its two sites for at least 60 more days as required by federal law. The Worker Adjustment and Retraining Notification Act offers protection to workers, families and cities by requiring employers to provide notice before plant closings and mass layoffs.


R.L. Stowe Mills bought its two Chattanooga operations from Dixie Group Inc. in 1999 as Dixie shifted from the textile to the floorcovering business.

"We will post a 60-day notice, and the last day is really dependent upon business conditions," Mr. Stowe said. "There is no firm set day."

Mr. Stowe said the recent expiration of safeguards limiting the amount of textile imports from China may have contributed to the decision to close, but the economic downturn was the primary catalyst.

"That's coming in '09," he said regarding restrictions on China's textile imports that expired on Jan. 1. "The primary reason is the steep dropoff in business that we saw in the fourth quarter of last year."

J.Ed. Marston, the Chattanooga Area Chamber of Commerce's vice president of marketing, said the group is always concerned when officials hear about a business closing.

"These are challenging economic times, but we continue to be optimistic as companies continue to invest in our community," he said.

According to the National Council of Textile Organizations, there has been a more than 30 percent drop in textile and apparel jobs in the United States since December 2002. There are about 475,400 textile jobs remaining in the U.S., the organization reported.

Textile positions in Georgia and North Carolina each account for about 58,500 of those jobs. There are about 13,000 textile jobs in Alabama and about 27,000 in South Carolina, according to the textile organization. Figures for Tennessee were not immediately available.

According to officials at R.L. Stowe, the company will work with employees, customers and suppliers to make closing down the business smooth and orderly.