Joan's McCallum Closes World's Largest Jacquard Plant in Fall River
March 2, 2004
LOWELL, Mass. - Joan Fabrics Corp. owner Elkin McCallum began a gut-wrenching restructuring of his upholstery mills this summer that included the October closing of a 300,000-square-foot jacquard plant in Fall River, Mass.
McCallum laid off hundreds of workers and top management staff throughout the streamlining process, during which upholstery sales slipped from $600 million to $300 million, he said. The closing of the jacquard plant came on the heels of business losses to China.
''Today, manufacturing as we know it in the U.S.A. is over because the Chinese have changed the rules and we have to make adjustments to remain competitive,'' McCallum said. ''If we reduce the workforce, we'll be competitive.''
In July 1997, McCallum purchased Mastercraft, then the world's largest jacquard mill. Since then he paid off $250 million in debt, spent $90 million on capital expenditures and made 11 acquisitions, including the purchase of Texel, a jacquard mill just outside Puebla, Mexico. In 1999 McCallum funneled $40 million into the remodeling of the then 33-year-old Fall River plant. But rough times have forced the closure of the state-of-the-art plant, cutting 400 jobs whose total annual payroll with benefits approached $25 million. He now strives to be a low-cost but high-value converter rather than a traditional mill, abiding by the ideology that as long as he can weave his own designs, he doesn't have to manufacture them himself.
''Our goal is to be cost-effective and beneficial to the customer. First we get the order and then we decide where it makes sense to produce the goods. Our job is to give the customer instant gratification by following through with great product and quick deliveries.'' Another severe cost-cutting move was the decision to pull out of the Showtime show in High Point. Only Doblin still presents there; Joan's displays all other lines year-round at Joan's new marketing and design center in Hickory, North Carolina.
Additional restructuring efforts include closing the Morganton plant in N.C. which produced Doblin fabrics, and combining it with a plant McCallum purchased with Circa 1901 Fabrics Corp. a few years ago; closing the Spindale, N.C. plant for weaving in May; closing the Concord, N.C. finishing plant and merging it with the Eagle Mountain plant outside Charlotte, N.C.; and closing the Park weaving plant used for Mastercraft (but keeping open the dyeing facility) and merging Mastercraft production into the Texla plant.
The plant in Fall River - the world's largest jacquard plant - assumed the brunt of the production work. Joan produced all its brands there except for Doblin/Circa, which is run independently. ''One of the best things I did was get out of the automotive upholstery business two years ago in that plant,'' McCallum had said of shifting production to Fall River. ''For the first time in our history, we also have a single sales force that carries Mastercraft, Home, Joan, Guildthreesixty, Main Street and Mastercraft Contract, all divisions of Joan Fabrics Corp.''
''If you look at the needs of the market - instant gratification and need for service - how do you get them without manufacturing?'' he asked. ''In terms of the assortment and getting to the market quickly it is very hard to be competitive to imports in the U.S.A. but we're going to try.''
McCallum is trying to develop a global strategy that meets the needs of the market but considers logistics. ''We're going to end up with a combination of a lot of things,'' he said. ''We're caught in the middle of a transition in manufacturing; we can't continue manufacturing in the same way as before, nor can we completely shut it down. If we go to China for our product, we're face with long lead times compared to a place like Mexico. China is not the total answer. Our customers who think that China is the answer may end up being wrong. How do you service the customer who is making furniture in China even when the logistics work against them?''
To prevent customers from taking their business elsewhere, McCallum aspires to offer them more selection than any other company. ''Product diversification and service is the most important alternative to commodity product,'' he said. ''We plan to offer the widest assortment of fabrics available in the world. The Chinese won't be able to compete with that.'' He said Joan currently produces 3,000 patterns a week.
McCallum has also installed a new software program called ''Fabric Workshop,'' a special order program that can turn goods over to the customer in under two weeks from receipt of order. Bassett Furniture recently added this program from Mastercraft to all 101 company-owned Bassett stores that might previously have been serviced by the local jobber. ''Being the biggest is no longer important in this business,'' he said. ''Being the best is what's important. We have to be nimble and flexible to survive. My goal is to prevent anyone from coming between our mills and the customer.''
McCallum laid off hundreds of workers and top management staff throughout the streamlining process, during which upholstery sales slipped from $600 million to $300 million, he said. The closing of the jacquard plant came on the heels of business losses to China.
''Today, manufacturing as we know it in the U.S.A. is over because the Chinese have changed the rules and we have to make adjustments to remain competitive,'' McCallum said. ''If we reduce the workforce, we'll be competitive.''
In July 1997, McCallum purchased Mastercraft, then the world's largest jacquard mill. Since then he paid off $250 million in debt, spent $90 million on capital expenditures and made 11 acquisitions, including the purchase of Texel, a jacquard mill just outside Puebla, Mexico. In 1999 McCallum funneled $40 million into the remodeling of the then 33-year-old Fall River plant. But rough times have forced the closure of the state-of-the-art plant, cutting 400 jobs whose total annual payroll with benefits approached $25 million. He now strives to be a low-cost but high-value converter rather than a traditional mill, abiding by the ideology that as long as he can weave his own designs, he doesn't have to manufacture them himself.
''Our goal is to be cost-effective and beneficial to the customer. First we get the order and then we decide where it makes sense to produce the goods. Our job is to give the customer instant gratification by following through with great product and quick deliveries.'' Another severe cost-cutting move was the decision to pull out of the Showtime show in High Point. Only Doblin still presents there; Joan's displays all other lines year-round at Joan's new marketing and design center in Hickory, North Carolina.
Additional restructuring efforts include closing the Morganton plant in N.C. which produced Doblin fabrics, and combining it with a plant McCallum purchased with Circa 1901 Fabrics Corp. a few years ago; closing the Spindale, N.C. plant for weaving in May; closing the Concord, N.C. finishing plant and merging it with the Eagle Mountain plant outside Charlotte, N.C.; and closing the Park weaving plant used for Mastercraft (but keeping open the dyeing facility) and merging Mastercraft production into the Texla plant.
The plant in Fall River - the world's largest jacquard plant - assumed the brunt of the production work. Joan produced all its brands there except for Doblin/Circa, which is run independently. ''One of the best things I did was get out of the automotive upholstery business two years ago in that plant,'' McCallum had said of shifting production to Fall River. ''For the first time in our history, we also have a single sales force that carries Mastercraft, Home, Joan, Guildthreesixty, Main Street and Mastercraft Contract, all divisions of Joan Fabrics Corp.''
''If you look at the needs of the market - instant gratification and need for service - how do you get them without manufacturing?'' he asked. ''In terms of the assortment and getting to the market quickly it is very hard to be competitive to imports in the U.S.A. but we're going to try.''
McCallum is trying to develop a global strategy that meets the needs of the market but considers logistics. ''We're going to end up with a combination of a lot of things,'' he said. ''We're caught in the middle of a transition in manufacturing; we can't continue manufacturing in the same way as before, nor can we completely shut it down. If we go to China for our product, we're face with long lead times compared to a place like Mexico. China is not the total answer. Our customers who think that China is the answer may end up being wrong. How do you service the customer who is making furniture in China even when the logistics work against them?''
To prevent customers from taking their business elsewhere, McCallum aspires to offer them more selection than any other company. ''Product diversification and service is the most important alternative to commodity product,'' he said. ''We plan to offer the widest assortment of fabrics available in the world. The Chinese won't be able to compete with that.'' He said Joan currently produces 3,000 patterns a week.
McCallum has also installed a new software program called ''Fabric Workshop,'' a special order program that can turn goods over to the customer in under two weeks from receipt of order. Bassett Furniture recently added this program from Mastercraft to all 101 company-owned Bassett stores that might previously have been serviced by the local jobber. ''Being the biggest is no longer important in this business,'' he said. ''Being the best is what's important. We have to be nimble and flexible to survive. My goal is to prevent anyone from coming between our mills and the customer.''
