Textile Company Blames Lack Of Credit For Shutdown

A North Carolina textile company said it closed two plants and laid off 200 workers this week because it couldn't find the credit to keep going.

Spectrum Yarns Inc. blamed the credit crunch in a letter to state authorities announcing the mass layoffs. Company president C. Douglas Blanchard said managers tried to find financing until Monday, then closed plants in Marion and Kings Mountain on Tuesday.

Hubert Johnson, manager of the Kings Mountain plant, said Thursday that without the money to make payroll or buy dyes and yarns, the company was out of choices. Blanchard's letter also said the South Carolina company that was its primary yarn supplier last week suddenly stopped shipping materials to Spectrum Yarns.

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  • by Anonymous on Oct 3, 2008 at 01:01 PM
    Any company borrowing to make payroll is going under anyway. A loan would just buy time. This is just an excuse for poor management to hide behind.
  • by Doug Location: Hubert on Oct 3, 2008 at 10:30 AM
    Microsoft, regardless of what you think of them, is one of the more successful corporations in this country, and that corporation has never in it's entire history borrowed money for anything. I don't want to make any sweeping judgements, but as a general rule, if a business can't make payroll without borrowing money, there is a cash flow and/or money management problem in that business. I've been running a small business since 1993. My company has been my sole means of financial support and has been profitable for 14 out of 15 years. It does not rely on credit for day to day operations.
  • by DoxieLover Location: Grifton on Oct 3, 2008 at 09:26 AM
    I agree w/"don't believe.." I'm sure this textile company was already in jeapordy like numerous others, ie DuPont they just waited until this week to do the layoffs to ease the blame on them
  • by don't believe the hype Location: Washington on Oct 3, 2008 at 04:55 AM
    And how were they getting materials before this? Did they get a new credit line every time they needed something? If this was an established business, they should have had existing credit, or they should have had the capital to purchase the needed materials up front. Am I missing something? I mean, I still have the same amount of credit available to me as I did last month. This is just an excuse to help the bailout argument. Can anyone explain?

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