published Saturday, October 22nd, 2011

Beaulieu to close Dalton plant; 170 jobs may be lost

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Beaulieu of America told employees Friday that it would close its Dalton, Ga.-based Riverbend plant by the end of 2011, a move that may cost as many as 170 jobs.

Just days before, Beaulieu had completed a refinancing deal with lenders on debt of $230 million.

"We are disappointed with having to make this decision," said Ralph Boe, president and CEO of Beaulieu. "But it is necessary for Beaulieu to remain strong and operationally efficient."

Beaulieu has traditionally attempted to avoid direct layoffs through furloughs and pay cuts, including cuts to executive pay.

Beaulieu has operated its Riverbend plant, which produces tufted and finished carpet, since 1988.

The closure was the latest blow to Dalton's struggling carpet industry, which has suffered a series of shutdown announcements in recent weeks, including Shaw Industries' Riverbend facility.

The latest cuts come from the business heart of Dalton, which calls itself the world's carpet capital, at plants that have long been major centers of production for the tufters and at locations that are just a stone's throw away from carpet companies' corporate offices.

That's worrisome, said David Pennington, mayor of Dalton.

"These are the first ones that are inside Dalton," Pennington said. "The carpet mills are the largest taxpayers in the city of Dalton and largest users of energy from Dalton Utilities."

Of late, Dalton officials have begun to consider life after carpet and are studying ways of attracting other industries to the city, using a nickel sales tax to help offset utility costs to new business.

Overall, carpetmakers have shed thousands of jobs since 2008 as builders slowed the pace of home construction amid record foreclosures and high unemployment.

"While regrettable, closing Riverbend will allow us to adjust our capacity to reduced sales levels," Boe said.

Since Oct. 10, there have been 634 carpet job cuts announced nationwide, including an additional 194 jobs cut at a Shaw Industries plant in South Carolina, as executives budget for what is expected to be another flat year in 2012.

Initial estimates called for slightly better results in the second half of 2011 after spring sales results ticked upward, said Kemp Harr, publisher of Floor Focus magazine.

"We thought it would recover in '11 but it hasn't," said Harr.

The recovery didn't take hold, however, and fears of a double-dip recession set in after the economy failed to improve over the course of the year. Shaw Industries' owner, Warren Buffett, predicted that housing may not recover until 2014, according to Dalton executives who spoke with him.

Both Beaulieu and Shaw plan to transfer affected employees to other plants, where possible, and pick up production at other plants, the companies said.

about Mariann Martin...

Mariann Martin covers healthcare in Chattanooga and the surrounding region. She joined the Times Free Press in February 2011, after covering crime and courts for the Jackson (Tenn.) Sun for two years. Mariann was born in Indiana, but grew up in Pennsylvania, Tennessee and Belize. She graduated from Union University in 2005 with degrees in English and history and has master’s degrees in international relations and history from the University of Toronto. While attending Union, ...

about Ellis Smith...

Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...

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lorabass said...

When it comes to unemployment it’s been a tale of two recessions, with level of education playing an unprecedented role in whether you’ve been pink slipped or not. Getting a degree from "High Speed Universities" is the only solution

October 22, 2011 at 6:25 a.m.
Wilder said...

I love it when reporters don't do their homework. Besides garbling numerous carpet terms, they refer to Warren Buffet, the CEO of the publically traded company, Berkshire Hathaway,as the owner of Shaw(one of it's worst performing subsidiaries).

October 22, 2011 at 6:57 a.m.
inquiringmind said...

Bottom line is the bad economy sends ripples throughout. Until the housing market comes back Dalton is screwed. That won't happen until the economy turns around. This is why we need Obama's job-stimulation package and not the tea party cutbacks.

October 22, 2011 at 9:35 a.m.
Wilder said...

When the carpet cartel conned the locals with their sob stories, and threatened to leave town if denied their illegal aliens(Bob's children), the citizens should have shown them the door.

They have reduced an historic 160+ yr old town, that was once a popular resort, to wall to wall squalor. Dalton will join the ranks of East LA, and Bell Gardens, as a third world slum.

October 22, 2011 at 6:59 p.m.
notpc said...

My brother is a victim of this downsizing and eventual demise of the carpet industry in this country. The only jobs that the Socialist-in-Chief will create are government jobs which will produce nothing but additional red tape and horrendous regulations that will further stifle manufacturing growth.

October 23, 2011 at 10:50 a.m.
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