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<ul><li>As many as 30 million Indian textile workers have already lost their jobs </li><li>More than 60,000 workers are jobless in the diamond polishing sector since 2018. </li><li>Rains have played havoc with sculptors whose stock was washed away in the rains. </li></ul> Much has written and spoken the job losses in the textile and <a href="https://www.businessinsider.in/indian-auto-manufacturers-have-laid-off-350000-jobs-in-four-months/articleshow/70563890.cms">automobile sector</a>. Millions of blue collar employees have lost their livelihood as plants shutdowns or production cuts. But just as many if not more artists and artisans are caught in the economic spiral with less or no spotlight. And it is not merely slowdown, but weather and other social factors are adding to the plight of the millions of India’s unorganised workers. These artists who are hurt the most are those who make ₹10,000 per month or less. And a few desperate of them have resorted to suicides, since few artists have prospects outside their chosen area. Rains sweep away profits from sculptors Ideally, this month Indian idol makers should be rolling in cash as Ganapati idol sales hit a high. But, they are now lamenting over losses and pain, as heavy in Maharashtra in Sangli and Kolhapur districts have<a href="https://indianexpress.com/article/cities/mumbai/maharashtra-ganpati-idolmakers-reel-under-heavy-losses-after-rain-flooding-5908852/"> swept away their</a> raw material, and annual earnings. Due to rains, the stock of idols made of plaster of paris has also deteriorated. Some have developed cracks while others rotting bases and others are bare damp leaving those who have worked all around the year, penniless. Lenders’ fury hits diamond polishers The story of artisans who shine diamonds is even worse. As US markets have lost sheen, the Indian industry is depressed. Multiple<a href="https://www.businessinsider.in/nirav-modi-arrested-in-london/articleshow/68496650.cms"> scams in the sector</a> right from Nirav Modi to Mehul Choksi has also resulted in shutdowns. Moreso, the banking sector which is hurt by diamond merchants is also refusing a lifeline, deepening the crisis. As many as 60,000 workers are jobless since 2018. According to Gujarat<a href="https://www.businessinsider.in/gujarats-diamond-industry-loses-sheen-as-60000-turn-jobless-and-a-few-resort-to-suicides/articleshow/70888125.cms"> Diamond Workers Union</a>, as many as ten artisans have already committed suicide. More are in trouble as a large number of units in this small and medium sized industries, are working on a single shift. Spoke in the spinning wheel As many as 30 million Indian weavers and powerloom workers have already lost their jobs, thanks to government policies and the effect of slowdown. This constitutes to a third<a href="https://www.businessinsider.in/a-third-of-indias-textile-workers-30-million-lost-their-jobs-and-more-could-go/articleshow/70781257.cms"> of all textile workers</a> in India. Over 600 spinning wheels have shut down leaving 200,000 unemployed. Half of these shutdown took place in the textile hub of Coimbatore in Tamil Nadu, which paint a grim picture of the economy. These job losses will affect many families as a large chunk of Indian textile workers are women. Their earnings support families, which now have nothing to fall back on.

The untold crisis to befall India’s artists, artisans and weavers

<ul><li>India’s textile industry, which employs 100 million workers is the second largest to generate employment opportunities. </li><li>Roughly a third of spinning mills have shutdown amid slowdown in export and domestic sales — leading to huge job losses </li><li>The cotton yarn export fell by 34.6% at $696 million in the quarter ending in June, shows the Directorate General of Commercial Intelligence and Statistics (DGCI&amp;S).</li></ul>In a bid to boost the textile industry in India, the Ministry of Textiles drafted guidelines in the National Textile Policy to export as much as $300 billion by 2024-25, and hoped it would add 35 million jobs. That has not happened. Over and above, due to slow down as many as <a href="https://www.nationalheraldindia.com/india/economy-in-crisis-over-3-cr-people-face-job-loss-in-textile-industry-representative-body-blames-tax-regimen">30 million </a>jobs in the sector lost their jobs. This will result in a deep job crisis across the country as textiles is the country’s second largest employer. More jobs to go Due to the state of affairs, more job cuts are inevitable. Sluggish exports and reduced consumer demand has resulted in production cuts. Roughly a third of the spinning mills have shutdown. The cotton, jute, fibre and wool industry is facing its worst time in nine years. The textile industry employs over 100 million people across the country. And the mill association is seeking government intervention to prevent job loss and “avoid the spinning industry from becoming a Non-Performing Asset (NPA),” a recent advertisement titled<a href="https://thelogicalindian.com/awareness/textile-industry-advertisement/"> by </a>Northern India Textile Mills Association (NITMA) said. In the spinning sector itself, over 200,000 workers have lost jobs, Sanjay Jain, Chairman, Confederation of Indian <keyword id="753614" type="DOMAIN" weightage="20" keywordseo="textile-industries">Textile Industries</keyword> (CITI), <a href="http://www.newindianexpress.com/states/tamil-nadu/2019/aug/21/12-lakh-textile-jobs-in-tamil-nadu-lost-in-one-year-2021936.html">told</a> BusinessLine. The textile hub of Tamil Nadu is affected as well as nearly 300 spinning mills have shut down. Across the country, as many as 605 have shut operations, according to M Jayabal, president of TN Open-end Spinning Mills Association (OSMA). Expectedly,120,000 turned jobless in the last one year. Taxes and interest rates According to the NITMA, there has been a decline in cotton yarn exports as well. The export fell by 34.6% at $696 million in the quarter ending in June, as per Directorate General of Commercial Intelligence and Statistics (DGCI&amp;S). This slowdown could reach the farms as well. In fact, the cotton association doubts if the 40 million bales of cotton may not even find buyers in India or overseas. And they blame taxes for that. The State and Central level taxes have made the Indian yarn non-competitive globally. <a href="https://www.businessinsider.in/rbi-cut-interest-rates-by-35-basis-points-as-growth-sputters-and-inflation-cools/articleshow/70565859.cms">High interest rates</a> in the current regime which the central bank has been trying to bring down but unable to is affecting a large number of small and medium sized enterprises of the industry. This is combined with the higher cost of raw material is higher in India, as compared to Bangladesh, Sri Lanka and Indonesia. This has led to ₹20 ₹25 loss per kilo. These competing countries have interest rates at <a href="https://www.thehindubusinessline.com/companies/yarn-fabric-exporters-seek-help-from-centre-as-shipments-fall-mills-close-down/article29189506.ece">around 5%</a>, while it more than twice that at 10%-12% in India. See also: <a href="https://www.businessinsider.in/job-cuts-at-parle-and-britannia-sales-show-indian-economy-is-in-dire-straits/articleshow/70766429.cms">India’s biscuit crisis shows slowdown is hurting the poor more — and job losses are making it worse</a> <a href="https://www.businessinsider.in/hero-motocorp-tata-mahindra-and-maruti-suzuki-are-all-cutting-production-as-theres-no-demand/articleshow/70710729.cms">Hero MotoCorp, Tata, Mahindra and Maruti Suzuki are all cutting production as there’s no demand</a> <a href="https://www.businessinsider.in/the-maker-of-general-motors-and-toyotas-parts-in-india-is-folding-up-axing-thousands-of-jobs/articleshow/70603130.cms">The maker of General Motors and Toyota's parts in India is folding up — axing thousands of jobs</a>

A third of India’s textile workers — 30 million— lost their jobs and more could go

Dhaka: <keyword id="19919639" type="General" weightage="20" keywordseo="bangladesh" source="keywords">Bangladesh</keyword>'s garment industry, a vital economic pillar, is facing a severe crisis due to a volatile mix of <keyword id="20444027" type="General" weightage="20" keywordseo="political-unrest" source="keywords">political unrest</keyword>, including violent protests, and catastrophic flooding, threatening to unravel years of rapid growth and global prominence. The textile and garment industry, which accounts for over 80 per cent of Bangladesh's total export earnings and contributes approximately 11 per cent to the nation's GDP, has been hit hard. This industry contributes significantly to export earnings and employs millions. Following the unprecedented anti-government protests, which reached a crescendo on August 5, Sheikh Hasina resigned as prime minister and fled the country. She landed in India on August 5 and is currently staying there. The two-month-long anti-quota protests have led to widespread demonstrations, curfews, and violence. This unrest has not only disrupted factory operations but has also caused significant economic losses. Factories were forced to close, and with the peak season for Christmas shipments and the booking of next season's orders upon us, the timing of the unrest has exacerbated the crisis. The Bangladesh Garment Manufacturers and Exporters Association (<keyword id="22930680" type="General" weightage="20" keywordseo="BGMEA" source="keywords">BGMEA</keyword>) recently has reported substantial financial losses, estimating a shortfall of Tk 6,400 crore (approx Rs 4,500 crore) due to the shutdowns and communication breakdowns. Khandoker Rafiqul Islam, the newly elected president of the BGMEA, mentioned that the goal of reaching nearly USD 45 billion in exports this year may not be achieved. He attributed this to disruptions in both export activities and production. "I think this is a temporary crisis and we will tide over it. The exact magnitude of the losses will be known later, but yes, there has been an impact," he told PTI. Echoing similar sentiments, former cabinet minister and president of BGMEA, Gholam Sarwar Milon, said the garment industry has been badly hit by both the political unrest and the floods, as both production and the supply chain of raw materials have been severely affected. "The crisis in the garment industry is unprecedented. Production is nearly 15-20 per cent less than the corresponding period last year. Several orders have dried up as investors and order suppliers are wary about investing. Several small factories have either closed down or are working on sub-contracts for big factories," he told PTI. According to BGMEA sources, out of 3,000 major and small garment factories in Bangladesh, nearly 800-900 have closed since last year. "The big factories have survived, but the small and medium factories have borne the brunt. If the situation persists, it will worsen further," he said. Milon suggested that the garment industry needs to diversify into making jute bags and other high-end clothing and also look for new markets. The Bangladesh Textile Mills Association has projected losses of around USD 58 million. The impact on the industry is compounded by the recent flooding, which has further disrupted logistics and exacerbated the economic fallout. Bangladesh's main port, Chattogram, through which more than 90 per cent of the country's international trade transits, has become a focal point of the chaos. The port's operations were paralysed during the political unrest, leading to significant delays in shipments. Factories have struggled to maintain production schedules, and backlogs at ports and airports have stretched to a month in some cases. To mitigate the damage, factories have turned to air freight and extended working hours, but these measures have not fully alleviated the delays. The president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Mohammad Hatem, said orders are down by 15-20 per cent. "The industry has incurred huge losses in the last few months. In 2014, during political unrest, we suffered a similar situation. It then took us three years to return to the previous state. We hope to tide over the situation soon as Chief Advisor <keyword id="20024384" type="General" weightage="20" keywordseo="muhammad-yunus" source="keywords">Muhammad Yunus</keyword> is taking several steps to restore normalcy," he told PTI. Hatem feels that if the situation is not overcome soon, there is a growing perception that foreign investors might look at new markets in other South Asian nations. "However, other South Asian markets don't have the infrastructure like Bangladesh, which has such huge production capacity," he said. The garment industry's workforce, which employs over 4 million people directly and nearly 15 million indirectly, with a significant proportion of women, faces mounting uncertainty. The sector's remarkable growth over the past two decades-from USD 5 billion in exports in 2001 to nearly USD 40 billion in 2023-now stands at risk. The floods have compounded the challenges, causing damage to infrastructure and further complicating logistics. Monsoon rainfall-triggered floods in deltaic Bangladesh and upstream Indian regions have killed several people and marooned or affected nearly 3 million others in Bangladesh, posing a huge administrative challenge to the newly installed interim government amid a political transition. "Due to the floods, the supply chain has been badly affected. We reached a high in 2023-24 where our garment exports touched around USD 46 billion. This time it is likely to be much less," said former army major and owner of a woollen garment factory, Mahfuzur Rehman. The sector's growth from a small-scale operation in the early 1980s to becoming the world's second-largest apparel exporter, after China, underscores its strength. In the financial year 2009, Bangladesh's apparel exports were valued at USD 12 billion. By the financial year 2023-24, this figure had surged to over USD 46 billion, reflecting the industry's capacity for recovery and growth even amid adversity. In response to the crisis, the interim government, now led by Nobel Peace Prize-winning economist Muhammad Yunus, has prioritised restoring order and stability. According to garment industry insiders, the path to recovery is fraught with challenges as the political instability has undermined investor confidence, and the recent flooding has further strained the already fragile infrastructure. "The sector's resilience will be tested as it attempts to regain its footing and restore its reputation as a reliable global supplier," a garment industry owner, who did not wish to be named, said. He added that despite the current crisis, Bangladesh's textile and garment industry has shown great strength and the ability to recover in the past.

Bangladesh garment industry faces crisis amid political unrest and floods

Mumbai, In one of the biggest land deals in the financial capital, Wadias-run <keyword id="6383267" type="General" weightage="100" keywordseo="bombay-dyeing" source="Orion">Bombay Dyeing</keyword> on Wednesday announced the sale of a 22-acre land parcel to Japan's <keyword id="82654" type="General" weightage="80" keywordseo="sumitomo" source="Orion">Sumitomo</keyword> for Rs 5,200 crore. The plot in central Mumbai's Worli houses the Wadia International Centre, the nearly three-centuries old group's headquarters and other establishments. "It's a large deal and will help solve a lot of our issues," <keyword id="201105" type="General" weightage="50" keywordseo="rahul-anand" source="Orion">Rahul Anand</keyword>, the chief executive of Bombay Realty, an arm of the listed Bombay Dyeing, told PTI. He said the genesis of the transactions is in a March 2022 decision by the Bombay Dyeing board to make the company leaner from a debt perspective, turn it into black and put it on the path to sustained profits by strengthening balance sheets. The company, which reported a widening of losses to Rs 517 crore in FY23, will get the money in two phases, with the first payment of Rs 4,675 crore expected by October, while the remaining Rs 525 crore will come by March 2024 after the completion of certain milestones, Anand said. Goisu Realty, a subsidiary of Sumitomo Realty &amp; Development Company, will be purchasing the freehold land parcel, which allows it to use the entire 22 acre for residential or commercial use. Group Chairman Nusli Wadia said he is happy that Bombay Dyeing is entering into agreements with Sumitomo Group for the sale. The transaction will help Bombay Dyeing record a pre-tax profit of Rs 4,300 crore, take its networth into the positive territory, and also pay dividends in the future, as per an official statement. This is the second major land deal struck by Sumitomo in the financial capital, after signing an agreement with the state-owned MMRDA for a long-term lease of two plots at the Bandra Kurla business district for Rs 2,067 crore in October 2022. Worli is in the heart of what was called the Mill Land at a time when the city had a reputation for being a hub of textiles. With the shutdown of mills, large parcels of land by Mumbai standards are getting released for commercial development and this locality already commands land rates, which are among the highest in the city. Anand said the sale will help Bombay Dyeing retire its existing debt of Rs 3,900 crore, and the debt-free balance sheet will help it take on further business activities. The company has many land parcels across, which have a development potential of 3.5 million square feet that can deliver revenues of Rs 15,000 crore, Anand said. Prime among the land parcels is an over 15 acre "unencumbered" plot in nearby Dadar while the rest are smaller parcels, he said, adding that the Rs 15,000 revenue potential can be realised in the next two years. It will launch a project on the Dadar land parcel by September next year, he added. Anand said it has booked revenues of over Rs 900 crore by selling inventory at another ready project in Dadar, which helped reduce debt from the March 2022 peak of Rs 4,600 crore. Apart from the WIC, the Worli land parcel, which is now being sold to Sumitomo, also used to house actor Shilpa Shetty-owned Bastian Restaurant. A few years ago, it also hosted the Hard Rock Cafe. Interestingly, over the last few days, Bastian has shuttered while the Wadia group headquarters have been shifted to another group-held property in Dadar. As per reports, Bombay Dyeing had toyed with a scheme to develop the 22-acre plot by itself in the past and announced a mixed-use development on it. The Wadia Group started way back in 1736, and has its roots in shipbuilding, and also runs a slew of other ventures, including biscuit brand Britannia, tea company <keyword id="663644" type="General" weightage="50" keywordseo="bombay-burmah" source="Orion">Bombay Burmah</keyword>, the grounded carrier Go First and Bombay Dyeing, which has its roots in the textile business. The company scrip closed 6.93 per cent up at Rs 140.45 apiece on the BSE on Wednesday, against gains of 0.37 per cent on the benchmark.

Maximum city's max land deal: Bombay Dyeing to sell 22-acre plot to Sumitomo for Rs 5,200 cr

<ul class="summary-list"><li>American manufacturers are thriving as global supply chains remain in turmoil. </li><li>They're not immune to other economic issues, like the labor crunch and rising shipping costs.</li></ul>Unlike many retailers this holiday season, Bayard Winthrop isn't concerned about global <a href="https://www.businessinsider.com/supply-chain-crisis-when-it-will-be-over-end-2021-11">supply chain snags</a>.That's because Winthrop, the CEO of <keyword id="11899424" type="UNKNOWN" weightage="60" keywordseo="apparel" source="Orion">apparel</keyword> retailer <a href="https://www.businessinsider.com/reviews/out?u=https%3A%2F%2Fwww.american-giant.com%2F">American Giant</a>, is close to nearly every aspect of his company's <keyword id="11894138" type="UNKNOWN" weightage="60" keywordseo="supply-chain" source="Orion">supply chain</keyword>: The cotton is grown in the US; it's spun into fabric and made into hoodies and sweatpants in factories throughout the Southeast and Midwest; then it's delivered, mostly by UPS, to customers across the country.That means nothing is <a href="https://www.businessinsider.com/home-depot-chartering-cargo-ships-started-as-a-joke-2021-10">stuck on a container ship</a> or needs to be air-freighted to the US to arrive in time for the holidays. "We expect to be fully in stock in the holidays," Winthrop told Insider. "We don't spend any time talking about supply chain stuff internally." Winthrop is one of four <keyword id="6362048" type="UNKNOWN" weightage="60" keywordseo="manufacturing" source="Orion">manufacturing</keyword> CEOs who spoke with Insider about what it's like to make products in the US during a time when <a href="https://www.businessinsider.com/why-store-shelves-are-empty-supply-chain-crisis-shortages-2021-10">global supply chains are in a state of upheaval</a>.None of them is immune to challenges facing the US economy in 2021. Some are having trouble hiring while others are raising prices as raw material costs soar. But they also described the benefits of manufacturing close to home — mainly, more control over their supply chains and greater flexibility when problems arise.When the coronavirus began spreading worldwide last year, it shut down ports and took factories offline while simultaneously sparking a rush on consumer goods. In the US, where the labor market is tight, there are also fewer people to process all the goods coming into the country from overseas, leading to a backlog at the nation's ports.And so, in the intervening months, there's been <a href="https://www.businessinsider.com/pandemic-shortages-risk-us-american-companies-using-global-supply-chain-2020-5">a greater push to manufacture more goods in the US</a>."There's not a guarantee that if you produce in the United States or North America, that you will be immune to any of this," Scott Paul, president of the <a href="https://www.americanmanufacturing.org/">Alliance for American Manufacturing</a>, an industry group that partners with both manufacturers and unions, told Insider. "But there is a better chance that you will be less impacted."<h2>The labor crunch was very real — even with the promise of higher pay</h2><h2><div type="image" title="Man works machine making spoons at Sherrill Manufacturing" height="1875" width="2500" msid="88094586" hostid="261"></div></h2>This mindset is on display at <keyword id="12670697" type="UNKNOWN" weightage="60" keywordseo="sherrill-manufacturing" source="Orion">Sherrill Manufacturing</keyword> in Central New York, which produces <a href="https://www.libertytabletop.com/">Liberty Tabletop</a>, a line of flatware and cookware. Sherrill Manufacturing's supply chain is "about as vertically integrated as you could possibly imagine," Greg Owens, the company's CEO, told Insider. The company's products start as a coil or bar of steel that's made in one of three places: Western New York, Pittsburgh, or Tennessee. That steel is then turned into forks or knives at the company's manufacturing facility in Sherrill, New York, and boxed up using locally sourced packaging.Owens said that sales of Sherrill's flatware doubled in 2020 as more people ate at home and rose another 50% year-over-year in 2021. The biggest problem the company faces now is keeping products in stock. But there are other challenges, too: Owens estimates that steel prices have doubled since before the pandemic, and he said finding workers to fill open positions is harder than usual. The company has raised wages to attract and retain workers, but filling the 25 positions it added to boost production took a long time, he said. "We went a year advertising with our payroll company on their program, which puts job postings on 10, 15 different sites," he said. "Didn't get one application."<h2>'Biting the bullet' as costs rise</h2><h2><div type="image" title="Person holds flannel fabric under sewing machine at Vermont Flannel Company facility" height="1583" width="2110" msid="88094588" hostid="261"></div></h2>Finding workers has been a challenge for <a href="https://www.vermontflannel.com/">Vermont Flannel Company</a> President Mark Baker too. The 30-year-old company manufactures its flannel shirts, pajamas, and blankets in the Green Mountain State and Baker said the biggest challenge the company has faced, besides the initial shut-downs in early 2020, is filling vacant positions. "We lost some people that either moved or decided they had other options," Baker told Insider. "It's really hard to find people to get into manufacturing nowadays." <keyword id="12670695" type="UNKNOWN" weightage="60" keywordseo="vermont-flannel-company" source="Orion">Vermont Flannel Company</keyword> differs from <keyword id="12670698" type="UNKNOWN" weightage="60" keywordseo="american-giant" source="Orion">American Giant</keyword> or Sherrill Manufacturing in that it imports its raw materials. The company contracts with a mill in Europe that produces the fabric and ships it to the US, but Baker said Vermont Flannel hasn't hit many snags, despite the supply-chain crisis. The company purchases its fabrics almost a year in advance, and they're shipped to the Port of Boston, which isn't as large — <a href="https://www.bostonglobe.com/2021/10/22/business/late-arriving-ships-plague-port-boston/">or quite as constricted</a> — as ports like Los Angeles.Baker said he's even more concerned about rising costs. The fabric is more expensive now, and the cost of shipping it to the US has skyrocketed. He's also worried about getting flannels shipped out to US customers ahead of the holidays because carriers like the United States Postal Service are <a href="https://www.businessinsider.com/holiday-shipping-usps-raising-prices-2021-8">raising prices</a> and may face issues that <a href="https://www.businessinsider.com/usps-slammed-before-christmas-workers-sick-gifts-delayed-2020-12">delay shipments like last year.</a> "I think it's going to be a little bit of a biting the bullet in the next six months," he said, adding that the company may have to raise costs if the issues persist.<h2>Soaring shipping prices amid soaring sales</h2><h2><div type="image" title="Woman wearing green Arrow + Phoenix swimsuit laughs outdoors with hand on hip" height="1620" width="1241" msid="88094590" hostid="261"></div></h2>Kayla Bell is also familiar with the challenges of importing raw materials during a time of global upheaval.As the CEO of swimwear and activewear brand <a href="https://www.arrowandphoenix.com/">Arrow + Phoenix</a>, which is manufactured in Henderson, Nevada, Bell had to scramble when shipments of her Italian-made fabric were disrupted in 2020 as the country grappled with devastating waves of the coronavirus.Arrow + Phoenix was simultaneously seeing demand for its suits soar, which Bell attributes, in part, to a societal focus on spending with Black-owned brands amid protests following the killings of George Floyd and Breonna Taylor. Customers were placing $1,000 worth of orders per day, so Bell found a US textile company that produced the same type of fabric as a substitute. Now Bell says she's facing a new logistical nightmare: shipping the finished products. The brand's domestic shipping costs have increased by about $2.50 more per package with USPS, she said, and its international shipping costs have also soared. As a result, Arrow + Phoenix raised its prices by a few dollars per item, scaled back on the number of styles and colors it sells, and offered preorders for certain items. "Before COVID, it was like 40 bucks for us to ship a swimsuit, or any package, over to Italy. Now it's $200," Bell told Insider. Bell's challenges, and those of the other companies, prove the complex nature of <keyword id="11893588" type="UNKNOWN" weightage="100" keywordseo="retail" source="Orion">retail</keyword> in 2021: No company, no matter how it makes its products or where, is isolated from the pressures of the global economy, or the undulations of supply and demand. Paul, the AFAM president, said these challenges are leading more companies to reconsider their supply chains, diversify their suppliers, make their manufacturing processes more flexible, and source products within the US. "I don't know anybody who's suggesting that we have autarky, that we just shut our country down and we're going to be self-sufficient," Paul said. "Just, the closer you are to your customer, the closer you are to your main assembly, the fewer things that can go wrong."

Sellers of American-made goods are thriving amid supply-chain chaos — but they can't escape labor and cost pressures

<div class="image-container float_right" style="width:480px"><div class="image">AP Photo</div></div>At the time, the press talked about it like it was another <a href="http://www.csmonitor.com/1983/0208/020837.html">War of Northern Aggression.</a>
Back in 1982, a 46 year-old <keyword id="15937" type="PERSON" weightage="60" keywordseo="Carl-Icahn">Carl Icahn</keyword> tried to take control of a 100 year old textile company called Dan River Mills, located in Danville Virginia. The corporate raider's siege lasted less than a year, and he was only repelled when the entire town banded together to buy shares of the company.
This was nothing like the now 77 year-old Icahn's current fights fellow hedge fund manager Bill Ackman, or Dell founder, Michael Dell.
In Danville, automobile and appliance salesmen offered shares of the company with purchases, and local businessmen paid millions for full page newspaper ads reading "<span style="color: #333333; font-family: Arial, Tahoma, Verdana, Helvetica, sans-serif; font-size: 14px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 22px; orphans: auto; text-align: left; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; background-color: #ffffff; display: inline !important; float: none;">''KEEP DAN RIVER AT HOME - BUY DAN RIVER STOCK!'' Residents lined up outside brokerages to buy stock to stop Icahn's hostile takeover.
The raid still lingers in the town's memory, in an article about the Mill written only two years ago, former employees remember the raid and the raider.
<a href="http://www.wsls.com/story/20822816/the-rise-and-fall-of-dan-river-inc">From Virginia's WSLS10:</a>
“Icahn was the worst … you had your ups and downs, but the period of fighting Icahn was probably the most intense,” said Rodney Reynolds, who retired as senior vice president and chief financial.
Icahn started building up a position in Dan River in September of 1982 when the stock price was only $15 a share. In October company started issuing 1.7 million shares preferred stock to employees in an attempt to dilute Icahn's voting power, <a href="http://www.csmonitor.com/1983/0208/020837.html/(page)/2">according to the Christian Science Monitor.</a>
By November Icahn owned 15% of the company and<a href="http://www.nytimes.com/1982/11/04/business/icahn-broadens-dan-river-offer.html"> offered 16.50 for 2 million shares</a> (and under 50%) of the company. He was rejected.
<div class="image-container display-table float_left"><div><div class="image">Google News, Milwaukee Journal screenshotIcahn's rejection in the Milwaukee Journal, December 14, 1982</div></div></div>Never daunted, he increased his bid to $18 a share and was rejected yet again in December.
Meanwhile, behind the scenes Icahn was making moves. As his offer was getting trashed by Dan River's board, he was bringing his stake in the company up to 19.2%.
At one point, Icahn increased his stake to 29% of the company.
The town retaliated to all of this by hiring New York law firm Paul, Weiss, Rifkind, Wharton &amp; Garrison and filing a lawsuit against Icahn, charging him with racketeering in a Virgina Court.
<a href="http://www.nytimes.com/1982/10/14/business/dan-river-challenges-icahn-with-charge-of-racketeering.html?n=Top%2fReference%2fTimes%20Topics%2fSubjects%2fF%2fFinances">From the New York Times, in October of 1982:</a>
In a complaint filed here in the Federal District Court for the Western District of Virginia...Dan River charged that Mr. Icahn had acquired its stock with ''proceeds derived through prior acts of extortion, mail fraud and securities fraud.''
''Dan River is the latest victim of Icahn's tactics,'' the complaint charges. ''Icahn and his group have already successfully dislodged over $83 million from various American corporations in the last two months alone.''
And Icahn's response?
'I consider it an abomination that a company's management should resort to these gutter and smear tactics,'' Mr. Icahn said in a statement. ''These allegations are completely unfounded and are simply designed to dissuade me from continuing my interest in the company.''
None of this stopped the onslaught, of course.
So Dan River went for the (potentially) nuclear option. In January the company's board got permission to form a separate, private, employee-owned corporation to buy the company. By February Chemical Bank had signed on to provide the $150 million loan it would take purchase it.
Now — this option was nuclear because that loan would be (and was) crushing for the company, bringing Dan River's debt-to-equity ratio from 49 percent to 125 percent.
<a href="http://www.wsls.com/story/20822816/the-rise-and-fall-of-dan-river-inc">From WSLS:</a>
“It was survival,” recalled Odell W. Hutson Jr., who worked as an engineer in the maintenance department, about the employee ownership plan.
In the 1980s, business got tough with plant shutdowns and a cutback on employee hours and some layoffs, Hutson said.
The fear that Icahn would take over lasted about a year, recalled Diana Raines, who worked as an invoice clerk. Employees knew Icahn’s reputation of shutting down companies and selling off assets to make money.
“It was scary when the Carl Icahn thing was going on,” Raines said.
Dan River tapped employee pension money, sold off collateral assets, and took Chemical Bank's crushing loan in order to wrest control from Icahn. Eventually, after all the dust settled and the lawyers flew back to New York City, Icahn made $8 million and Dan River stayed in the hands of locals.
It is said, however, that the debt Dan River took on to stave <a href="http://www.wsls.com/story/20822816/the-rise-and-fall-of-dan-river-inc">off Icahn made it hard to modernize.</a>
The mill was bought by three businessmen in 1989, rallied profits through the 1990s, but filed for bankruptcy in 2004. Dan River's last plant closed in 2007.
So in case you were wondering whether or not Carl Icahn ever loses, the answer is yes he does — but that doesn't mean his opponent will survive the battle.
You can watch a video of one of the Dan River's old smoke stacks getting demolished below:

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