Thomaston Mills, Inc.

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Thomaston Mills, Inc.

P.O. Box 311
115 E. Main Street
Thomaston, Georgia 30286
U.S.A.
(706) 647-7131
Fax: (706) 646-5082
Web site: http://www.thomastonmills.com

Public Company
Incorporated: 1899
Employees: 2,246
Sales: $280.7 million (1998)
Stock Exchanges: NASDAQ
Ticker Symbol: TMSTA
SICs: 2200 Textile Mill Products; 2211 Brandwoven Fabric Mills, Cotton; 2261 Finishing Plants, Cotton; 2390 Miscellaneous Fabricated Textile Products

Based in Thomaston, Georgia, Thomaston Mills, Inc. produces textiles for industrial and consumer use. The company, founded in 1899, faced challenges from foreign competition in the 1980s, and suffered during the economic recession of the early 1990s. In 1998, it had sales of $280.7 million, and though losses were up, so were sales per employee. “The year just ended was disappointing,” admitted President and CEO Neil H. Hightower in the company’s 1998 annual report; however, he proposed a number of measures to increase profits in the coming year. Hightower’s promise seemed to reflect an eternal truth about the textile industry in general, and the company in particular, formulated by his uncle George Hightower in a speech 15 years before and excerpted as the epigraph to Hard Times, Good Times, a centennial history of the company: “Thomaston’s textile industry has grown. It has grown all the time, all through the years, hard times, good times, bad times, all times. The textile industry has always been that way; it’s always been the best of times and the worst of times. That never changes. It’s a fight all the time and a joy and a pleasure to be involved in it. It’s a wonderful business.” The company’s long and varied history gave observers plenty of reason to predict more good times ahead for Thomaston Mills.

Upson County Gets a Cotton Mill

Thomaston Mills is located in the west central Georgia county of Upson, whose principal town is Thomaston. By the latter part of the 20th century, Thomaston Mills was the county’s primary employer by a wide margin, but in the 1890s Upson County was without a major industrial presence. Editorials in the local paper, the Thomaston Times, called for the founding of a cotton mill, and in the last month of the 19th century, Robert E. Hightower and R.A. Matthews established Thomaston Cotton Mills.

In the depressed economy of the rural South, still reeling from the Civil War a generation after the conclusion of hostilities, the foundation of a new industrial concern was a cause for excitement. The mill soon became a major employer, and within a short time it had greatly affected the local economy. Yet the early years were also ones of struggle. Ill health forced Matthews to retire, and while on a trip to New York City in 1901, Hightower secured a new investor in James E. Reynolds. With Reynolds’s help, Hightower rescued the company from a brush with bankruptcy, and in the years that followed, would steer it into its first great period of growth.

Hightower had built a diversified resume as an apparel merchant, railroad executive, and banker. A devoted Methodist, he based his business principles on the New Testament parable of the talents, in which a merchant rewards or punishes employees on the basis of how wisely they use money he has entrusted to them. Thus he continually reinvested profits in the company. Between 1901 and 1926, the mill grew from a 5,000-spindle operation to a plant of some 75,000 spindles; and after expanding the original mill in the years between 1906 and 1910, Hightower added a second plant, containing 25,000 spindles, in 1915. Two years later, in 1917, Thomaston Mills opened yet another 25,000-spindle facility, this one dedicated to manufacturing a fabric used in making automobile tires. Directing its efforts increasingly toward the tire-cord market—Thomaston Mills counted both B.F. Goodrich and Firestone among its clients—the company replaced the equipment in Mill Number Two, and put the mill’s old machines to use in Peerless Mill, chartered in 1919. The company built a mill village to house 600 employees who would work in the new facility, and set up the Thomaston Bleachery, an operation for finishing textiles, in 1924.

Sticking Together Through the Depression

In 1926, Thomaston Mills signed a $100 million contract with B.F. Goodrich and the Fisk Rubber Company to provide them with 50,000 tons of tire fabrics over the next decade. As a result, the company experienced unprecedented expansion, adding among other facilities a new mill (dubbed Martha Mill in honor of Hightower’s wife), along with another village to house its workers. Thomaston also purchased new plants, including one in Griffin, Georgia; and modernized existing facilities.

Hightower’s eldest son, Harrison, became CEO of Thomas-ton Mills in 1925, while the father—known as “Mr. Bobby”—moved into the position of chairman. The Wall Street crash four years later hit the company hard, and after years of continued growth and expansion, Thomaston Mills faced a series of setbacks. The senior management took pay cuts, the company sold off facilities, and the company’s stock value dropped. Mr. Bobby even lost title to his own home.

An already bad situation became desperate when the Fisk Rubber Company went bankrupt. As Charles Josey wrote in Hard Times, Good Times,”Making matters even worse, the mills had already purchased the cotton necessary to deliver its 1930 commitment to its enormous contract with Fisk. When a 100-boxcar train was loaded with cotton and headed north to be sold for whatever it would bring, there seemed little hope for the company. Debts piled up, and the company found itself being placed into receivership by The First National City Bank of New York.” Yet the Hightower family, and the larger “family” of Thomaston Mills and the town, stuck together through these lean years. Often the company provided food for employees, and distributed gifts to their children at Christmastime.

The company’s leadership had learned a lesson in the Fisk debacle, and thenceforth Thomaston Mills never put itself in the position of devoting more than five percent of its production to a single client. During the 1930s, the company developed strategic relationships with two distributors: F.F. Myers in Akron, Ohio, which acted in a distribution capacity for Thomaston Mills’ tire-related production; and J.P. Stevens, which similarly distributed its non-industrial products. By 1935, two years before the death of Mr. Bobby, Thomaston Mills was out of receivership and on the road to new growth.

Heightened Focus on Employee Needs in the Postwar Years

Under the leadership of Harrison Hightower, the company underwent consolidation of its operations, along with improvement of its facilities. During the 1930s, union agitators had attempted to organize the employees of Thomaston Mills, but they had little success due to the strong sense of family that blurred the lines between management and labor. Exemplary of the company’s commitment to its employees was a renovation of the mill villages that it underwent as soon as it came out of receivership. Ronnie VanHouten, who later became corporate secretary, recalled life growing up in the village: “We certainly didn’t think of ourselves as being ’owned’ by the company; we were part of it.... If something happened to one person, everyone knew … and grieved for them in times of trouble.”

During World War II, Thomaston Mills redirected its production for wartime, producing tire cord, industrial fabrics, and material for uniforms. It also maintained a much-reduced line of goods for consumer use; but with the end of the war in 1945, the consumer market reemerged as a priority along with plans for expansion and modernization of the company. The latter changes included formation of a personnel department—an innovative concept in late 1940s rural Georgia—along with a company newspaper, the Spinning Wheel, which ran folksy news items by, for, and about mill workers. Typical was this item: “Cecil thinks he’s something since he has a 1935 Ford. Better watch out folks!”

This was just one of the employee-oriented creations developed under the leadership of Harrison, who was also heavily involved in community work such as the establishment of a school for mill workers’ children, opened in 1946. He led efforts to improve education in textile engineering at Georgia Tech, where the textile industry building is named in his honor. In addition, he established Community Enterprises, Inc., a charitable organization which undertook a number of projects to improve community life in Thomaston.

With the death of Harrison in 1947, leadership of Thomaston Mills, Inc.—it had changed its name in 1945—went to his younger brother Rob. Like his brother before him, Rob put an emphasis on employees, in particular by encouraging participation in the popular company baseball and basketball teams. Rob Hightower died in 1952, and the last of Mr. Bobby’s sons, Julian, became CEO. He would remain at the helm for almost 20 years, until 1971, during a period of great change for America—and for Thomaston Mills.

Company Perspectives:

Among Thomaston’s key objectives are: to demonstrate the highest ethical standards in all dealings with our customers and suppliers; to assure that the quality of every product we sell is better than our customers request; to provide a level of service to our customers that allows them to be competitive and profitable; to be fair in our dealings with every employee at all times; to encourage open communications among all our employees at every level of the organization; to insist that every Thomaston Mills employee achieves the high standards of individual performance necessary to be competitive; to be a good corporate citizen in each community where we operate....

Computers, Direct Sales, and Other Changes

A symbol of the new world of the 1950s was the two-story school building Thomaston Mills built for the children of the community: among its many state-of-the-art amenities was a brand-new 1955 computerized communication system. This was just one of several local building projects fostered by Julian, who Josey in his company history characterized as a leader motivated as much by aesthetic as by humanitarian concerns. Like his brothers, he took especial care of the employees, and introduced a number of innovations. Under his leadership, the company in 1966 added a new data-processing system to facilitate management of operations. Although its early computers were ungainly and limited in function, from this start Thomaston Mills developed an information-management framework upon which it would build in the coming decades.

Julian, who died in 1987, turned over the reins of leadership to William Harrison Hightower, Jr., his brother Harrison’s oldest son, who became CEO in 1972. Billy, as he was called, set about changing the terms of the company’s relationship with J.P. Stevens, which had become increasingly rocky—a fact exacerbated by a decline in the tire-cord market. Under Billy’s watch, the company disengaged from Stevens and began directly marketing its own goods. Billy also began developing brand names for the company, which previously had maintained a relatively low profile with regard to the public. Taking his cue from Stuckey’s, which marketed candies through company-owned stores along interstate highways in the South, Billy opened six Thomaston Mills stores. Through these, the company sold varieties of apparel and other consumer products, including bed linens.

Thomaston Mills, which had formerly maintained a focus in tire cord and other industrial products, showed its new consumer-oriented approach with the introduction of patterned sheets under the brand name “Thomaston American Mood Prints” in 1970. Over the decade that followed, it would add numerous patterns to the collection, and this led to new distribution relationships with companies such as Ely and Walker of Memphis, Tennessee. Ultimately it would form even more lucrative alliances, including one with retail giant Kmart in the mid-1970s. In the 1980s, it expanded its retail lines with Rattlers Brand hunting gear, made of snakeproof Cordura nylon. But Thomaston Mills certainly did not confine itself to retail: along with other areas, it developed a strong line in institutional linens such that travelers at New York’s tony Plaza Hotel—as well as those staying at Motel 6—were likely to sleep on Thomaston Mills sheets.

Among Billy Hightower’s other important moves was the establishment of an export department, and when he retired in the early 1980s, the company’s board noted that sales under his leadership had risen from $46.6 million in the 1969 fiscal year to $137.7 million in 1981. At the end of his tenure as leader, the company opened a 64,700-square-foot weaving plant in Zebu-lon, Georgia.

Staying Competitive in the 1980s and 1990s

In 1982, George Hightower, Billy’s younger brother, became CEO. George faced the vicissitudes of a changing market, and it fell to him not only to close the company stores in 1984, but to sell off the mill villages. The company also stopped producing broadcloth and shirts.

Driving the latter move were factors which would increasingly come to haunt Thomaston Mills in the years that followed: government interference and foreign competition. A company executive recalled in Hard Times, Good Times: “Because of the [U.S.] Department of Agriculture’s rules on cotton, the Japanese mills could buy United States cotton, delivered in Japan, cheaper than we could buy the same cotton here in America. They could buy cotton ten-to-twelve cents a pound cheaper than we could. Also, the Japanese had retooled their industry with the very finest combed goods and weaving facilities; so, they literally drove us out of the business. We had to shift to heavy goods, such as denim twills, drills, et cetera. And this involved a major retooling.”

With the retirement of George Hightower in 1986, Neil Hightower—son of Billy and grandson of Harrison—assumed leadership of Thomaston Mills. Like his uncle George before him, Neil had to confront situations new to the company’s leadership. Seeking to cut costs, U.S. businesses had drastically reduced inventories, and therefore expected suppliers to provide goods quickly and efficiently as needed. This required the creation of a company transportation fleet and a department to run it. By 1997, the year when Thomaston Mills began outsourcing its transportation, the company’s fleet included some 17 tractors and 62 trailers. Another change was the creation of two classes of stock, one voting and the other nonvoting, to encourage greater liquidity without diluting the influence of the Hightower family.

On the retail front, the company moved increasingly into the department store market, and this required expansion of the bedding design staff. The “snake-bite-proof” Rattlers brand proved enormously successful, with annual sales of some seven million units, and in January 1998 the company sold the line to Rutter Rex of New Orleans. Another important development came in the fall of 1998, when the company reorganized the sales structure that had existed more or less unchanged since the split with J.P. Stevens. This led to the creation of divisions such as Apparel Fabrics and Apparel Sales.

A Century-Old Company in a Global Marketplace

A number of changes had been spurred by the increasing influence of the global marketplace, heightened through trade agreements such as NAFTA (North American Free Trade Agreement), signed in 1993. Despite the fact that many jobs go to Third World countries, the efficiency of U.S. facilities ensures their continued importance in part because of the capital-intensive nature of the business: moving factories is simply not a viable option. Nonetheless, Thomaston Mills has had to adjust to a changing landscape in order to remain as competitive as possible.

When it comes to maintaining an edge in a changing marketplace, computers are an important tool; but perhaps most important, in the case of Thomaston Mills at least, are its people. “The folks who run Thomaston Mills have a gallant, self-effacing demeanor that’s quintessentially Southern,” wrote Susan Harte in the Atlanta Journal and Constitution. “Don’t be fooled. They also ooze grit from every pore, and have no intention of allowing their family-controlled textile company to become a casualty of its beleaguered industry.”

With their strong sense of community, the company’s personnel are vitally aware of their long history, and of the other storms they have weathered in the preceding century. Thus as the company faced losses in 1998 due in part to the Asian financial crisis, Neil Hightower was able to take a long view. Explaining to stockholders a plan whereby the company would introduce new lines, close some facilities, and reinstate strategic relationships with old customers, he said, “We are not looking for a quick turn. We are going to be smaller before we are profitable, but we are all committed to meeting the challenge.”