NEWS

Biddeford Textile 'will thrive', predicts new owners - the union, management, an investment bank and a local partnership

Portland Press Herald

By Jack Beaudoin, Staff Writer

Biddeford, ME., - Rita Lachance has gone to work in the mills every day for the past 46 years. Monday she'll return to her job as pattern-maker at Biddeford Textile but with one important difference -- she'll be going to work for herself.

Lachance and her 370 co-workers Friday became 33 percent owners in the new Biddeford Textile Corp. The workers' union, local investors, mill management and a Maryland-based investment banking firm purchased the electric blanket shell manufacturer from Sunbeam for $10.5 million.

"Excited is not the word," Lachance said, minutes after the final document was signed in Portland. "We are ecstatic."

The 33 percent stake held by the Union of Needletrades, Industrial and Textile Employees as part of a stock ownership plan represents the largest share in the privately held company. American Capital Strategies of Bethesda, Md., a labor-friendly-investment bank that specialize*s in funding employee buyouts, will own 29 percent of Biddeford Textile.

Other owners include a local investment partnership headed by a Portland businessman, Michael Liberty, which controls 29 percent of the company, and the mill's management team, led by a Biddeford resident, Rene Boisvert, which controls 9 percent.

The new company's board will include two directors from the union, two from American Capital, two from Liberty's group and Boisvert.

The sale includes a five-year agreement by Sunbeam to purchase the blanket shells made at two facilities in Biddeford. Workers also agreed to a new five-year contract that cut wages and benefits by 11 percent. The concessions will allow the new company to improve cash flow and help pay off the $15 million financing during that time.

"With the new five-year supply agreement . . . we'll be adding jobs," Liberty said at a news conference Friday night. He said the factory now operates at 60 percent capacity and he wants to increase it to full capacity.

Lachance, who will serve on the new company's board of directors, said the concessions the workers agreed to earlier this year will pay off dividends down the road.

"This is just the beginning," she explained." This company will thrive, just as it has been doing for the past 25 years. In five years, when we burn the debt cards, when everything is paid for, we'll have a big party."

Michael Boisvert, a machine repairman at the mill for 23 years, said he never imagined that he would one day own the mill his ancestors worked in.

"My father worked in the mills and so did both of my grandparents," Boisvert said. "From one generation to another, we've always been a mill family. I'm very excited about this."

With the largest stake in the company, Boisvert said, mill workers -- who have been at the mercy of out-of-town corporate boards since the Biddeford mills were built 150 years ago -- will finally have a say in their own destiny.

That sense of confidence was shaken in 1996, when a corporate downsizer, Albert "Chainsaw Al" Dunlap, took the helm of Sunbeam, Biddeford Textile's corporate parent since 1971.

Within four months, Dunlap included the two Biddeford plants among the 18 factories and subsidiaries scheduled for sale or closure, and said the company would look for alternative sources for its blanket shells.

"We were very uneasy," said Boisvert, who is married and has one child. "Like everyone else, we didn't know what the future would hold for us."

City and state officials, along with the workers' union, formed a task force to find a buyer for the plant. The union's regional manager, Mike Cavanaugh, first proposed the possibility of a union-led buyout, and later brought in American Capital Strategies and the Liberty-led investment group as partners.

With investment advising from the Llama Company, an Arkansas-based investment bank owned by Wal-Mart heiress Alice Walton, the buyout group reached a definitive agreement to buy Biddeford Textile on March 27.

Despite Dunlap's bad-guy reputation, Liberty said the Sunbeam chief bent over backward to make sure the deal succeeded. Liberty said Dunlap could have made money more quickly, but waited for the Liberty group to put together a deal instead.

"He could have easily handed this thing to an investment bank . . . He really is concerned about being fair," Liberty explained.

"(And) Sunbeam gave us a five-year supply agreement that virtually guarantees the success of this company."

Biddeford Textile also has contracts with companies other than Sunbeam, Liberty added, such as L. L. Bean, although "Sunbeam's contract is very important. It's the cornerstone of this company's future."

While labor and mill ownership historically have regarded each other as foes at the negotiating table, Lachance said workers, management and investors quickly established a strong, trusting relationship while they put together the new collective bargaining agreement.

"The last round of negotiations was easy," she said. "not the 11 percent cuts, but because we all knew and trusted the people we'd be working with for the next five years."

Lachance said there would be little visible change in the way the company operates.

"We'll all go back to our jobs Monday," she said. "We'll still be laboring, but we'll be laboring for ourselves".

Joshua Weinstein, staff writer, contributed to this story.