Spectrum Yarns blames plant closing on U.S.'s financial crisis

By: Mike Conley | McDowell News
Published: October 01, 2008

Spectrum Yarns Inc. suddenly closed its Marion and Kings Mountain plants, putting approximately 200 people out of work. The shutdown appears to be partially related to the nation's current financial crisis.
"The reasons for the closing … relate in part to the recent problems in the nation's financial markets," read a letter from Spectrum President C. Douglas Blanchard to the N.C. Department of Commerce. "In the midst of this national financial crisis, Spectrum has been unable to obtain sufficient financing to keep operations going."
The shutdown at both plants took effect Tuesday. The Marion plant, located at 263 Barnes Road, made textured yarns and employed 83 people, 74 hourly and nine salaried. It started operations in 1998.
Larry Hartman, the plant manager, said Wednesday he found out about the closing on Tuesday and, while it was a shock that it happened so abruptly, he and others knew the company was struggling. Hartman said the owner of the company fought up to the last minute trying to obtain financial banking but was unable to get any help.
In his letter, Blanchard wrote that Spectrum was seeking additional financing from its lenders, including BB&T and Commodore Factors Corp. Neither of these lenders was able to provide additional financing.
"In addition, management sought funding from several private lenders, and had financing been secured from any one of them, Spectrum could have remained in business," read the letter. "Management has also approached other companies in the textile industry regarding possible partnerships with Spectrum, which, if successful, could have saved Spectrum's business. Because all of these efforts to obtain additional funding have failed, Spectrum has no cash available to fund operations."
Meanwhile, Spectrum was notified last week that Nan Ya Plastics Corp., Spectrum's sole supplier of poy yarn, decided to immediately stop supplying materials to the Marion plant. Nan Ya was the only available supplier of this material to Spectrum.
"As a result of this unforeseen and sudden decision by Nan Ya, Spectrum is forced to close the Marion plant," read the letter by Blanchard.
The document added that the closing of the Marion plant makes it necessary to shut down the Kings Mountain plant as well.
The Marion plant was closed for a week as of last Friday and was to reopen Monday, Oct. 6. So employees were notified by phone about the shutdown. The workers had to come back in Wednesday to pick up their paychecks, get information on about their 401(k) retirement plans and benefits and find out what they could do next.
A meeting has been quickly set up at McDowell Technical Community College to help the Spectrum workers. It will be held Tuesday, Oct. 14 starting at 10 a.m. in the William Harold Smith Building. The meeting will be held to talk about a variety of education and job training resources available for the laid-off workers.
"We will be able to answer any questions they might have," said Michael Lavender, director of external relations at McDowell Tech.
Meanwhile, County Manager Chuck Abernathy, who's also the economic development director, said he's talked with the plant manager about whether the building could be used for another purpose.
"The manager is obtaining the information for me," said Abernathy.
He added he was informed that BB&T now owns the 100,000-square-foot building.

Spectrum Yarns blames plant closing on U.S.'s financial crisis

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