BIG LITTLE TEXTILE COMPANY

Tuscarora Yarns: A global success story

By Devin Steele

Reprinted from: Southern Textile News, February 4, 2008

MOUNT PLEASANT, NC — Tucked in a small town with an inviting name, you’ll find the nerve center of a global success story.

A textile manufacturer.

Based in the U.S.

Bucking the trend.

Wind north through the main drag (don’t blink) of the Cabarrus County town of Mount Pleasant (pop. 1,425) and you’ll pass a barbecue joint, a curbside hamburger stand and a mechanic’s shop before reaching the modest headquarters of Tuscarora Yarns.

But don’t be fooled.

Inside, you’ll find some of the brain trust — those who aren’t out plumbing new business opportunities in various parts of the world — of a 109-year-old yarn production company that continues to find new ways to thrive in a challenging economic environment for American textile manufacturing.

Indeed, an anomaly of sorts. But to hear its story, you’ll realize that Tuscarora’s success hasn’t occurred through happenstance. And it comes from more than just hard work, quality, consistency, fast turnaround and service. Those are all givens in today’s fast-paced, 24/7 world.

Flexibility, customization, creativity, innovation, investment, new market and niche exploration, downstream involvement, a team culture and smart, loyal employees all figure into the company’s ability to differentiate itself from U.S. textile manufacturers its size.

And it starts at the top.

Chairman Martin Foil Jr., 74, who has headed Tuscarora Yarns since 1968 and has been involved with the company in some matter or form since he was a pre-teen, has spent his life thinking forward and holding an unwavering conviction that a strong manufacturing base is good for America, say those who know him. And that philosophy has transcended his office and is prevalent throughout the company, which has enabled Tuscarora to remain on the cutting edge during ever-evolving times, according to company President Peter Hegarty.

Moreover, the company is “staying out of the way” of big volume commodity producers in China, India, Pakistan or wherever, Foil said.

“We want to be the whipped cream and the cherry on top of the sundae,” he said.

Located just five miles from Reed Gold Mine, where gold was first discovered in America, Tuscarora Yarns has continually spun yarn into gold, so to speak, regardless the global pressures or the business cycle. Or, as the company so aptly puts it in its motto: “Spinning the Products of Imagination.” A strong balance sheet combined with virtually no debt and an aggressive growth strategy make Tuscarora Yarns — in many respects, the biggest little U.S. textile company around — an easy choice as our Featured Company in this, our 20th annual Textile South edition.

Key attributes

Privately held Tuscarora Yarns is a three-plant, 300-employee company that produces 100 percent cotton, synthetic and blended yarns manufactured both open end and ring spun for a variety of applications. They include men’s and women’s sportswear, hosiery, sweaters, home furnishings, automotive and more.

Tuscarora Yarns is the largest manufacturer of cotton heather and mélange yarns in the U.S. and the only Supima-licensed spinner of heather yarns in this hemisphere. Its yarns are sold in end products at the mass market level to the private label level and are found in such top brands as Victoria’s Secret, Liz Claiborne and Ralph Lauren, to name a few.

Driven by an export-oriented mentality, the company has and continues to use a hemispheric strategy — encouraged by certain free trade deals, particularly the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) — to its benefit. About 40 percent (and growing) of Tuscarora’s business is exports, Hegarty said.

The company views its competition as burgeoning niche players in Asia, particularly China, and not the guy down the street, Hegarty said. And its top forte is innovation, he said, defining that as, “the ability to create new products that create demand.” And it does so with quality and in quick-turn fashion, he added.

A number of other attributes have factored into the company’s success, Hegarty said. Tuscarora:

• was one of the first companies to do business in Mexico and Central America and today is one of best-known textile companies working those regions;

• was one of the first companies to call on retailers directly;

• is “peerless” in color creation and color matching, thanks to its unique R&D facility; and

• uses state-of-the-art machinery and technology for the most efficient production of the highest-quality products.

In a nutshell, all of this relates to the company’s strategy — and the supply chain’s demands — for fast turnaround, Hegarty said.

“We try to maintain our deliveries within a two- or three-week time frame,” he said. “You have to be able to maintain that because the pressure is on from the retailers. They want it faster all the time. Our customers feel that pressure and they put the pressure back on us — and we have to have the ability to do that.”

A creative resource

A perusal of Tuscarora’s website and “capabilities brochure” for customers, potential customers and designers, along with a tour of its showroom, reveals that the company views itself as much more than a yarn producer.

In the printed piece, words, concepts, images and design all collaborate to send a message that Tuscarora is more of a creative resource than a mere manufacturing company. Also available in Spanish, the brochure emphasizes color and creativity, accentuated by the inclusion of some of Monet’s paintings and such inspiring phrases as, “If you dream in color” and “Just Imagine It.” Such thematic elements also resonate throughout the company’s website (www.tuscarorayarns.com), which is available in English, Spanish, Chinese and Korean.

And that’s just an introduction.

Walk through the company’s showroom and you’ll likely be impressed by the depth and breadth of products — not yarn packages, but actual end products made with Tuscarora yarns. Apparel and fabrics of various colors, yarns, blends, brands, styles, etc. are available to see and touch, which only serves to reinforce, subliminally perhaps, Tuscarora’s image as a big-picture company.

“This showroom has been a tremendous success for us,” Hegarty said. “I don’t think you’ll find many spinning companies that have a showroom like this with product that we can pull off the shelf. Anytime we can get a customer to come into this showroom or go to our Oakboro mill more on that later, I guarantee we’re going to sell them.” Why such a showroom? “We decided that we had to be proactive rather than reactive in presenting our product,” he said.

Tuscarora has a mini-manufacturing center complete with testing and knitting machines, enabling the company to test the quality of its yarns in a fabric before being sent to the customer.

“We figured we might as well make some garments out of this fabric so we can show people what our product looks like in the actual garment, rather than just putting a cone of yarn on the desk and saying that’s what we make,” Hegarty said. “Then we decided the retailers were the first ones who need to see the product, so we were the first spinner to start calling on retailers.” Creating “up-market garments,” he added, has led to business opportunities.

“It’s been tremendous because people will say, ‘this is fantastic. Who can make this for me?’ And we’ll say, ‘where do you want it made? Do you want it made in America? Do you want it made in Guatemala? Wherever you want it made. And we have a list of our customers who can make it for them.”

Color-matching lab

Tuscarora’s color-matching lab also sets Tuscarora apart, according to Foil.

“In the lab, designers can spend a couple of days and do a whole year’s line of colors and yarn for fabric and go away with everything done,” he said. “We don’t have a peer in that business, and that would include everybody — the Chinese and the rest of the world.” Being able to match customers’ colors and provide quick turn is significant, Hegarty added.

“We can actually turn around a color submit within 24 hours,” he said. “A customer can send in a color match and we can turn it around and have a knitted piece of fabric back to them in the color they’re looking for. We have a great customer service staff who is bilingual and a great planning group within the mills who has the ability to provide those deliveries on a quick notice.”

Hot products

Tuscarora’s product line is quite impressive and too extensive to list here. In its literature, the company tells customers, “if you can imagine it, we can create it.” And it does, from cotton acrylic heather yarn to dyed cotton mélange yarn to bamboo yarn to cotton polyester mock twist yarn.

“The beauty of what we do is we can do any blend, any kind of fiber together, any percentages,” Hegarty said. “Nearly everything we produce is custom made. We don’t make anything from stock. The requirement is set up by the customer.” One of the hottest products among consumers and designers are vintage heather yarns and Tuscarora has been at the forefront of creating this unique product range. These 100 percent cotton and also tri-blend products create irregular patterned heathers.

The exceptional soft hand has proven to be the most popular, Hegarty said.

The retro vintage look has become a top seller for a number of name brands, thanks in part to actresses such as Renée Zelwegger and Lindsay Lohan being spotted wearing them.

“This is a tremendously difficult product to produce on a consistent basis to maintain its irregularity,” Foil said. “Someone will always try and copy a successful product, but ours is the original and no one has been able to duplicate its appearance and hand.” The company also spins a range of specialty fibers such as bamboo, flax, specialty acrylics, flame-resistant (FR) rayons, FR acrylics, outdoor acrylics, outdoor polyesters and antimicrobial polyester.

Its Bambu collection of products, made with bamboo, are among those generating buzz in the trade, Hegarty said. Several garments in the showroom were produced by blending predyed cotton fibers with bamboo to create a heather effect. The sample shirts have a nice drape with a rayon feel and a sheen like mercerized cotton.

As a renewable, natural resource, bamboo falls into the sustainability category, which of course is one of the biggest trends in all industries these days. But the “green” movement is nothing new to Tuscarora, which has produced a recycled, cotton-based product, “Remade™” for more than 20 years for the upholstery market.

With Bambu and other fibers, the company has now moved beyond recycling by producing environmentally friendly and health-conscious products. Prominent among the range are sustainable yarns produced from USA organic cotton fiber; Ingeo corn fiber (licensed spinner); flax fiber; and recycled post-consumer waste polyester fiber, Ecospun and Naturespun.

Other products in the range are antimicrobial yarns produced from Fosshield® polyester; Invista Fresh FX™; Nanohorizons SmartSilver®; Cupron™ copper fiber; and DAK Americas Delcron® HydroPur with AlphaSan®.

A number of other ecofriendly products are in the works, including those from recycled polyester, Hegarty said.

“We recycle as much of our waste as we possibly can and that’s very important that we continue to do that within the company,” he said.

Five Star Process

Another differentiating factor for Tuscarora is its Five Star process of making 100 percent cotton colored heather yarns, offering the most homogenous blend possible, Foil said. This unique process is protected and made possible by patents held by the company.

The process produces a smooth fabric appearance with an enhanced sheen and silky look, providing a much better hand, he added. And the lack of neps in the fabric compares favorably to the best 100 percent cotton heather yarns made anywhere in the world, he said.

The driving force behind the development of the process was Foil.

“The Five Star process came about as a desire on my part to make a world-class product,” Foil said. “And I thought I knew how to do that, but I couldn’t get anybody to work with me to help me. I couldn’t get a machinery company to let me use their equipment and I didn’t want to buy something to bring in here and work with it and hope that it would work.

“But I finally talked a used machinery dealer into letting me have a used piece of machinery and I set it up, got it running and the first pound I saw come off, I knew I got it right. And that’s how Five Star was born. It’s been very successful. It’s not the end-all, be-all because it’s not perfect. Nothing’s perfect. But this year we’re going to invest probably another three quarters of a million dollars to put in some new equipment to make Five Star even better.” When the process was introduced, it caused a “real stir” in the business, Foil recalled, because of the properties of the product.

“We’ve sold a lot of product, but some people don’t want to pay for it,” he said. “Well that doesn’t hurt our feelings. But if they want that product and want to differentiate themselves — and that’s a key in the marketplace — then that’s a good way to go.” Tuscarora uses the Five Star process on certain yarns that go into Victoria’s Secret garments, which may be one reason the company is the only U.S. Spinner that supplies yarns to the well-known brand.

Modernization

Which brings us to manufacturing. Tuscarora produces about 500,000 pounds of finished yarns each week at three locations in the area:

• Mount Pleasant — open end yarns are spun here primarily for home furnishings and industrial applications;

• China Grove — also an open-end spinning mill dedicated primarily to home furnishings and apparel; and

• Oakboro — a ring-spun operation the produces yarns for home furnishings, apparel (including hosiery) and industrial applications.

All three plants operate non-stop, seven days a week. Throughout its plants is machinery from such well-known names as Rieter, Schlafhorst, Zinser, Murata, Crosrol, Suessen, Saco Lowell and Trützschler.

The crown jewel of the manufacturing triumvirate is the Oakboro facility, an unassuming, U-shaped structure that hardly looks like one of the most modern yarn-spinning plants in the world. But exterior looks can be deceiving.

Inside, the plant has been completely upgraded over the last five years with much more modern equipment that achieves the highest production speeds in the industry today, said Andy Wheeley, vice president of Manufacturing.

In the spinning area, more than 17,000 spindles are running, with yarn counts ranging from 8s to 40s, he added.

For the carding area, Tuscarora recently placed a machinery order for Rieter’s 365 combers. The modernization project will be complete when that installation goes in.

“We have a lot of proprietary modifications to some of those machines, from opening all the way through to winding, some of which were designed by our own people,” Wheeley said.

A unique aspect of the plant is the lack of automatic laydowns, Wheeley said.

“People are used to seeing this big laydown of cotton and a picker going up and down doing that,” he said “But you can’t do that at our facility. Everything has to be measured and basically hand fed. So we have all these hoppers where we have to do this blending and putting all these colors and fibers together.

“This blending equipment is totally computerized,” he continued. “They’re all being monitored, with safeguards to make sure the drop weights are exactly what they’re supposed to be, because you have to make sure that blend is exactly spot on. And you have to make sure the color percentages are consistent. If someone orders a color today, he wants the exact same color six months from now or a year from now or five years from now.” The company also is continuing to expand or upgrade older equipment at its openend mills. Two older spinning frames were recently replaced at the Mount Pleasant plant, for instance, and in China Grove, equipment is being added to increase capacity.

In ship shape

Exporting has been a crucial part of Tuscarora’s strategies for about 20 years and is more important now than ever before, Hegarty said. To call the company a “free trader,” however, is a bit misleading, he added.

“We’re not for all the free trade agreements,” he said. “We’re for fair trade agreements and we don’t have a lot of fair trade agreements. We have a lot of free trade agreements. There are not a lot of two-way streets.” To that end, Tuscarora is utilizing the DR-CAFTA as well as any U.S. company, industry observers said. The region has become the bread and butter of its export business, as a number of U.S. customers have relocated there.

“If it wasn’t for DR-CAFTA — and to a lesser extent, NAFTA in the beginning — I’m not so sure that Tuscarora would still be here today,” Hegarty said.

Hegarty and his sales team spend a good amount of time in other countries, particularly in Central America but also Asia, he said.

Hegarty said he sees tremendous possibilities in Peru and Colombia, two countries with which the U.S. has free trade agreements in the works — if bilateral trade is allowed to occur.

“There is opportunity in there,” he said. “When the Peru agreement comes through, it will give us a whole different perspective because we’re going to be able to offer products without duties and make us more competitive with the local spinners.

“We’ve had customers there who want to work with us on a lot of finer-quality products, which is what we dedicate ourselves to — non-commodity, higher-end, better products, or more skilled labor work forces versus volume,” he continued. “That’s where I see a good potential for growth to diversify our products.” Supporting trade agreements doesn’t mean Tuscarora is abandoning manufacturers north of the border, he said.

“We have an incredible push right now to develop more business in the United States, as well as Canada,” he said. “We’re finding there’s a lot more opportunities for new, start-up companies here in America in all three aspects of our business, from apparel to home furnishings to industrial applications. We’re aggressively going after and developing new business here in America. We’re coming up with new products that we’ve never thought about making and it’s been good business for us here in the U.S.” The company does not favor trade agreements with such countries as Haiti, Korea, Singapore and Panama, according to Hegarty, because they would allow better opportunities for transshipment and other forms of fraud to occur.

Working with others in this hemisphere gives Tuscarora — and fellow U.S. companies — advantages in several areas, Hegarty pointed out. One is replenishment.

“When a garment is flying off the shelves, they can’t wait six or 10 weeks to get it from China,” he said. “They have to make it quick and get it back on the shelves and we can get it to them in their time frame.” Tuscarora’s color-matching capabilities and short lead-time requirements also play to its advantage when doing business in the Southern Hemisphere, he added. Also, because Tuscarora is a specialty producer, it can ship smaller volumes to Latin, Central or South America and can even combine loads with other U.S. suppliers, Hegarty said.

He explains: “If a customer has a commodity yarn they’re buying from another spinner and they need 5,000 or 10,000 pounds from us, we have an advantage of consolidating container loads or we have enough going down that we can consolidate with other customers to export there. But if they have to get it from Asia, they would have to buy larger volumes. So our minimums are a benefit. We don’t need a container-load quantity of yarn.”

Two important attributes for the company are coordination and communication throughout the organization, Hegarty said. Salesmen keep each other posted on where each stands, and often the work one is doing in one country affects what a colleague is doing in another country.

A tremendous amount of communication between mills, the color lab, sales, administration and management occurs as well, which is important to keeping everyone on the same page, he added. “We keep our communication flow going,” he said. “We rely heavily on e-mail and our sales team answers their phones no matter what time of day or night.”

Also, Tuscarora and its exporting arm, ATMEC, LLC, both employ bilingual staffers to handle customer calls. Part of the company’s exporting success comes from networking and marketing opportunities gleaned from membership in certain organizations, such as Cotton Council International, a division of the National Cotton Council; and the American Apparel Producers Network.

“Peter and Tuscarora take advantage of CCI’s international programs more than any other company I know,” said Jesse Curlee, president of the Supima Association. “They’re very active with that association.”

Human capital

A team culture and a family atmosphere pervades the company, according to Phil Absher, director of Human Resources, adding that communication and employee involvement are strongly encouraged.

“Employee opinions matter,” he said. “And we also promote healthy relationships between management and employees. Employees feel open to speak with direct supervision and/or senior management in a non-threatening environment.” Foil agreed with those sentiments.

“I’ve always believed that a door has two handles and that’s so you can open it and close it,” he said. “I leave my door open and everybody knows they can come see me, whether it be the janitor on the third shift or the lady on the switchboard or the salesman on the job. Doesn’t make any difference. We try to be fair.”

He added: “We try to see that people have fun. They spend more time with me than they do with their family and that’s a responsibility I don’t take lightly. I tell people who come to work here, they should have three guiding principles in their lives and that is, first and foremost, that higher power that they look to. Their family should come next, and third, it should be wherever they earn their living.

I believe if your priorities are organized like that, you’re well on your way to lead a happy and productive life.” Employee motivation, rewards and recognition and an emphasis on health and safety have brought about positive employee morale and a high retention rate, Absher said. The average length of service is 15 years, and some employees have worked as long as 38 years, he added.

One reward that was much appreciated among employees, Hegarty said, is employee lunches. For three days twice a year, around the Fourth of July and Christmas, Absher prepares meals on a grill for every shift at all three plants.

“And it’s usually steaks and chicken, not hot dogs and hamburgers — and a lot of baked potatoes,” Hegarty said. “It really emphasizes the family atmosphere we have and the positive feedback is tremendous.” Absher added that Tuscarora takes a proactive approach to its benefits package and has implemented a wellness program that includes health screenings. Nurse coaches also are available through the company’s health administrator for discussion, monitoring and follow-up.

The company has a strong safety record at all facilities, according to Absher. Safety committees are active at each plant, with Oakboro being recognized by the NC Dept. of Labor a couple of years ago for having logging 3 million hours of work without a lost-time accident, he said. The China Grove facility, which also has earned NCDOL recognition recently, is approaching 1 million hours without a lost-time accident, he added.

“Bottom line: Safety is good business and it gives us an advantage financially by controlling our costs,” he said. “Morally, it’s the responsible thing to do. And we do believe that that employee who is earning that hourly wage is our most valuable asset.”

Strategies for growth

Clearly, Tuscarora Yarns is seeing its way through a murky world. In a day when many U.S. manufacturing companies, textiles or otherwise, are finding it harder and harder to turn a profit, that says a lot.

Tuscarora’s formula for success is currently working well for this small yarn spinner, but isn’t universal. And the company knows it can never get too comfortable, that it must continue to actively pursue new business opportunities, wherever they may lie, and stay on the leading edge of technology and innovation.

Distinction is critical.

So says Foil.

“We want to be on the cutting edge of what’s new and different and be able to offer those kinds of resources to people who are going to differentiate themselves from the masses,” he said. “We want to make it and enable you to differentiate yourselves when you show to the public something that they won’t be able to turn down.” Foil added that there are no real secrets in the textile business — just different ways of doing things.

“There are people who have secret ways of putting chemicals together or who make fabric look and behave differently, but given enough time, all those secrets are going to be unlocked. What we’re doing this year, we’ll be doing some of next year. But hopefully we’ll keep adding those layers of new and exciting items that will continue to renew our outlook on our business and customers as a unique supplier.”

Tuscarora one of first to explore export options

MOUNT PLEASANT, NC — Tuscarora Yarns was one of the first U.S. textile companies to see a major change coming as the industry began to recede — ever so slightly — in the late 1980s, according to Chairman Martin Foil Jr.

With a captive but shrinking U.S. customer base, the industry knew it had to explore its exporting options. Trouble was, few of them knew where to begin. So Tuscarora, along with 38 other yarn production companies, created a cooperative for that purpose called the American Textile Export Company (AMTEC), based in Gaston County, NC.

Peter Hegarty was hired as president of AMTEC from Unifi, Inc., where he headed the international group.

In 1988, such a symbiotic organization may have seemed improbable, given the competitive nature of the domestic industry, Hegarty recalled recently. “Can you imagine that?” Hegarty, now president of Tuscarora, asked. “It was hard to even get them together in the same room. For them to create this cooperative for exporting was tremendous.”

The arrangement worked well for several years, Hegarty said, until NAFTA was ratified and began to take effect. Companies were becoming more savvy in international trade and AMTEC would gradually begin to lose members. By 2001, Tuscarora and four other predominant members of AMTEC bought the organization, with Tuscarora being the majority owner. The organization was renamed AMTEC, LLC.

At the time, Hegarty was hired full-time by Tuscarora to lead the company’s global marketing and sales effort, though he would continue to lead AMTEC as well. Since then, Tuscarora has continued to buy a bigger stake in AMTEC and is now the majority stakeholder.

“The interesting thing is we have continued to export for other spinners that are not owners of AMTEC,” Hegarty said.

Recalling those early days of AMTEC and his first encounters with Foil, Hegarty said he knew from Day 1 the Tuscarora leader was forward thinking.

“I certainly thought AMTEC was the way to go, as I’ve always been a trader, wandering around the world,” he said. “Martin Foil had the vision as well. He saw this market shrinking and Tuscarora got very involved in the export business.” “We still see continuing shifts from here to the CAFTA regions,” he added. “And as that shift continues we will continue to increase our presence in CAFTA and do a better job working with the key retailers in the places they make their garments.” — Devin Steele

Suppliers call Tuscarora Yarns ‘ingenious,’ ‘innovative’

MOUNT PLEASANT, NC — A diversified yarn spinner, Tuscarora Yarns produces 100 percent cotton, synthetic and blended yarns and relies heavily on its suppliers to provide quality product, according to Peter Hegarty, president of the company.

One of those suppliers, Tintoria Piana of Cartersville, GA, established a presence in the U.S. primarily because of a relationship it forged with Tuscarora, said Andrea Piana, executive vice president of Tintoria Piana U.S., Inc., a stock-dyeing mill for cotton. “Tuscarora was the key that stimulated us in our new adventure in this fantastic country,” Piana said.

It started when Martin Foil Jr., Tuscarora Yarns chairman and CEO, was presented with a yarn that was made and dyed in Italy by Tintoria Piana. So impressed was Foil with the yarn’s attributes that he flew to Italy to see how it was made and, soon, he would be importing it “by the boat load,” he said.

“It was the way they dyed the fiber that differentiated it,” Foil said. “I told the owner (of Tintoria Piana) that if he comes to the U.S., I would help him get started here. I also told him that if he comes here, he would run everybody else doing that out of business — and that’s what happened.”

Tintoria Piana opened its U.S. branch in 1995 and now operates at a capacity of about 88,000 pounds of dyed and blended cotton a day. “Tuscarora is a very important customer for us,” Piana said. “As in any long-term business relationship, it started as business and has evolved into friendship.

“Tuscarora is honest, professional, polite and reinventing themselves constantly,” he said. Tuscarora buys plenty of dyed fiber from Tintoria Piana, Foil said. “They are the best fiber dyers in the world, bar none,” he said.

Meanwhile, Jeff Dellinger of Foss Manufacturing, which also supplies fiber to Tuscarora, described the yarn spinner with three adjectives any company would be proud to have associated with its name.

“Capable, ingenious and credible,” he said.

Foss sells Tuscarora its EcoSpun and FossShield® fibers to Tuscarora. EcoSpun is a high quality polyester fiber made from 100 percent certified recycled plastic PET bottles. FossShield® is a unique antimicrobial polyester that has numerous applications.

“They’ve been extremely innovative with new ideas in fibers,” Dellinger said. “They’ve been able to grow in an industry where it’s difficult to grow in, and that has to do with their integrity, insights and innovation.” A representative of another partner, Wellman, Inc. called Tuscarora a “pleasure to work with.” “They’re very strategic to us,” said David Reed, whose company works with Tuscarora to place specialty fibers such as fine-denier polyester ComFortrel® into the hosiery market.

“We have used them to develop samples of new fibers that we’ve introduced. They’ve been timely, very cooperative and very amenable to looking at making new yarns out of our new fibers.” He added: “They’ve been extremely cooperative when we’ve approached them on a need for making yarns for development fabrics or for making samples for other customers. They jumped all over it. They do what they say they’re going to do, they do it in a timely fashion and the quality’s very good.”

Likewise, Henry Poston of Palmetto Synthetics called the relationship with Tuscarora “excellent.” Palmetto, which provides specialty synthetic fibers, has worked with the company on several projects.

“For that part of our business they’re one of our best customers,” Poston said. “Our development people work with their development people and our purchasing people work with their salesmen.

“They’re constantly looking for new things and new innovations and they realize that that’s what it takes to stay in business today,” he added.

Another specialty fiber supplier, DAK Americas, sells Tuscarora its Delcron® HydroTec moisture management fiber and its HydroPur™ moisture management/antimicrobial fiber.

“They’re a very innovative company and have a niche in the marketplace,” said DAK’s Jim Netzel. “They’re always interested in what’s new.” Cotton cooperative Staplecotn called Tuscarora “very straightforward” and “easy to work with.” “They have a strong niche product and they seem to be expanding,” he said. “At least they’re buying more cotton now than they have in the past.” Meanwhile, Jesse Curlee, president of Phoenix-based Supima Association, gave high praise to his main Tuscarora contact, Hegarty.

“He’s always been international focused, even when the industry wasn’t so much,” Curlee said. “He’s a very export-oriented textile guy. He’s very knowledgeable about their heather yarns business. He’s very good on the downstream marketing and he works with brand and retailers.” Tuscarora is the only Supima-licensed spinner of heather yarns in this hemisphere.

Curlee, who said he has seen Hegarty a number of times in foreign countries, said the Tuscarora president is constantly meeting with his customers and aggressively staying abreast of his competitors. “He uncovers every stone,” Curlee said.

“We view our relationships with our vendors as parternships and they are an integral part of our business,” Hegarty said.

— Devin Steele

CHAT WITH THE CHAIRMAN Foil offers 60-year perspective on company, industry

Editor’s note: Martin Foil Jr., chairman of Tuscarora Yarns, Inc., Mount Pleasant, NC, recently sat down for an interview with Devin Steele, STN editor. He has led Tuscarora since his father’s passing in 1968 and has been involved with the company in some form or fashion since he was a pre-teen. One of the last of the still-working breed of Southern textile magnates, he covered a number of topics from his 60-year perspective in the industry. Throughout his career, Foil, 74, has spoken with numerous U.S. presidents and lawmakers about industry issues and has testified on Capitol Hill on numerous occasions. Following are excerpts of the interview .

STN: What factors, externally and internally, have contributed to your company’s success and how has your philosophy and ability to adapt played a role?

Foil: Are you asking me why we’re still in business? I think the biggest problem in the last 20 years has been the inability of CEOs to pull the trigger. The industry has always gone through cycles. When you talk to them, it was always, “well it’s not good right now, but it’ll be back in the fall or it’ll be back in the spring or it’ll be back in the summer.” Well, it came that time where it never came back. NAFTA had a lot to do with that. But be that as it may, a lot of these people didn’t invest in newer technologies and they always thought that tomorrow things were going to be better. So they never made provisions for what was necessary to survive.

You know if you’re sitting down there making a zillion yards of whatever and 100,000 yards of this or that and always thought there was going to be a market for it and you didn’t try to differentiate your products but made the same old stuff year end and year out, sooner or later these people with lower labor costs and cheaper products were going to get you. They just didn’t pay attention so they didn’t close those plants that were too expensive to upgrade and they didn’t look to see what else they could do in the marketplace to differentiate themselves.

STN: When Tuscarora helped create the American Textile Export Company (AMTEC) in the late 1980s, what kind of writing on the wall were you seeing for the industry?

Foil: One was the ability to make a profit. That was the biggest hurdle everybody had to overcome. So when you look at your balance sheet and you look at your income statement, you have to make a decision. Am I making the right products? Am I getting a fair return on my investment? Where can I squeeze out costs? And there are three things you look at for cost. One is your raw material base. Two is your cost of manufacturing — that is your labor and electrical, for instance, fixed and variable costs that go into making a product. And the third and most importantly is your SG&A. And I think that’s where some of the old-line companies failed. They were late in addressing their SG&A.

STN: So you saw a change coming and adapted accordingly?

Foil: It was either change or fold up. There was no real alternative.

STN: What were your initial feelings about NAFTA when was proposed?

Foil: We were in favor of NAFTA. We thought it was a good thing. Some people would say a necessary evil. I think, looking back now, I certainly would be more in favor of CAFTA than NAFTA. I don’t believe in free trade — I believe in fair trade. And our government doesn’t know the difference.

STN: How important is innovation to your company’s success?

Foil: I think that’s the driving force.

STN: What about R&D?

Foil: I am the R&D. When you think of R&D, most people think, “let’s go out and create something.” Being creative is not a matter of sitting down and saying, “OK, I’m going to be creative today. I’m going to come up with three ideas. Y’all watch out, here I come.” Doesn’t happen that way. You can go months or maybe even years without having a genuine creative idea that will put money below the bottom line.

STN: Tuscarora’s Five-Star Process is your brainchild. How was that initially received?

Foil: That caused a real stir. It makes your product real homogenous. It gives it a very silky hand and it almost looks like a mercerized product. So when you put all that together, a lot of people think that makes a very fine product and we’ve sold a lot of product.

Some people don’t want to pay for it. Well, that doesn’t hurt our feelings. But if they want that product and want to differentiate themselves — and that’s a key in the marketplace — then that’s a good way to go.

We have some people out there, for instance, who think that selling to Wal-Mart is the greatest thing since sliced bread. We sell Wal-Mart but Wal-Mart is not the end all, where you should chase it. You’ve got Wal-Mart selling $5 or $6 shirts.

At the other end of the scale, we’ve got people selling shirts that go to people like Lindsay Lohan for 70 bucks. Well I’d rather sell the fiber that went into the 70-buck shirt. You’d be surprised how many teenagers want a Lindsay Lohan shirt that costs 70 bucks as opposed to a $5 shirt from Wal-Mart.

So there’s a big, exciting market out there that differentiates itself from everything else. And that demands quick turn, it demands attention to detail.

It’s like being a surfer. You’ve got to ride the waves while they’re out there. Yeah, we’ve hit a lot of troughs, too, no question about it.

STN: You mentioned quick turn and attention to detail, something others such as the Chinese aren’t capable or willing to do. Please address the importance of maintaining a U.S. manufacturing base.

Foil: That’s right here (tapping his heart). I have a meeting on the with the head of the North Carolina Chamber of Commerce and I’m going to blister him real good about manufacturing. I think our government, led by this president, has done a horrible job of protecting the American worker and the American people.

I do not think we’re capable in this country anymore of making the garments for our soldiers, our sailors, our airmen, our Coast Guard. Our textiles have been decimated to the point where I don’t think we could deliver the necessary products for another world war. I wrote the president about that. Of course, I didn’t get an answer. I’m a strong believer in that.

A lot of people think of textiles as a Southern phenomenon that’s geared toward extremely cheap wages with people who have no or little education. Nothing could be further from the truth today. And we struggle to do the right thing.

A lot of people point their fingers and say, you talk a good game but you buy all your equipment from overseas. That’s correct. And the reason is, our government didn’t do anything to encourage these people to stay in business over here to make equipment to manufacture, to take care of the textile industry. So all of that business did go overseas.

And if we’re going to compete with the world today and be able to help our government in a war or keep our people clothed, we have no option but to do that.

There are some pockets of people here in the United States who are still thriving, even under these circumstances. And these are the people I’m proudest of and try to pattern our business after. But they’re few and far between. And I’m afraid some day that will come back to bite this country in the fanny when we’re going to need an industry to step up and do what’s necessary.

We have to be able to feed our people, we have to be able to clothe our people, we have to be able to deliver the energy to keep it running and we should be able to manufacture what’s necessary in this country to be self-sufficient. And we are not. And if we’re not careful it will be the end of America and the end of a golden era.

STN: You served in the U.S. Army Quartermaster Corps. Were you enlisted during war time?

Foil: I missed Korea by about six months. In 1959 I won a national award for people in textile schools on addressing the issue of overseas competition. And I haven’t changed my position since 1959. The dean at NC State asked me to enter the competition.

STN: So, you’ve been personally involved and emotionally invested in that issue for a long time ...

Foil: I don’t do the things in NCTO and things like that, like Peter (Hegarty, Tuscarora president) does. I’m more of a voice crying in the wilderness. But I think it’s sad that the government doesn’t understand that our industry is strategic to the survival of our country.

I mentioned in my letter to the president that we either would fight the next war naked or we’d have to get our uniforms from the Chinese. Heck, I almost believe that. I mean, it’s really sad.

When the people in the Congress have to tell the Pentagon to source their uniforms in the United States and not buy from China and Pakistan and India and places like that, what are they thinking? What’s going to happen in the next world war if our competition is China and India and Pakistan or anybody else? I’m aghast that they don’t understand.

With all the industry that’s closed down, I don’t know that it can be done. The government would have to invest some money in the industry to get it back where it could compete. But even if it did that, where are they going to get the equipment if the world isn’t going to ship it in here to us?

STN: How’s your relationship with Congressman Robin Hayes (R-NC)?

Foil: We’re good friends. We grew up together in Concord. I knew his granddaddy, Mr. Charles Cannon, real well. He’s a big booster for the Pentagon and particularly for our (military) folks down in Fort Bragg. He believes as I do that we’re not prepared and we will not be prepared unless we do something.

STN: Do you think this free-trade, globalization tide is going to be prevalent in this election cycle?

Foil: I don’t know. I think this president has done this country a great disservice. I tell a lot of people this story. When I was 13 years old I used to ride the train to Philadelphia a lot. I went to the doctor up there. I would sleep in the top bunk and my daddy would sleep in the bottom bunk. And about 7 o’clock every morning, a guy would come in and wake everybody up and give us time to get ready before we pull into Penn Station.

And I would look out my window and we’d be rolling through a town called Chester, Pennsylvania. And there was a building which was probably a warehouse near the tracks. It was an old red, weathered building. And it had a white sign on it that was also faded. It was outlined in white and in white it said, “What Chester Makes Makes Chester.” That has always stayed in my mind.

What it says is that if we’re going to continue to be a great nation, we’ve got to make things and we’ve got to sell things. We’ve got to be self-sufficient. Well, we’re fast becoming a service nation and that is very, very poor. We’ve got some of the brightest people in the world who work in America and their gifts are being outsourced to people who are taking advantage of us. And our so-called free trade policies have caused us unbelievable problems. And it’s not that free trade is bad. It’s just that our government is myopic and can’t discern the difference between free trade and fair trade.

Now if you look at our automobile industry, their problem is not that they’re not smart anymore and not that they’re not automated. Their problem is, you know how much an auto worker makes an hour? About $80. Well no wonder we’re not competitive. I don’t begrudge $80 an hour if they can make a profit, but they can’t make a profit.

Do we still need an automobile industry? Absolutely. How are we going to make tanks, how we going to make Humvees, how are we going to make the armored personnel carrier? I mean, if we don’t have that ability, we can’t make planes that are competitive. I give up. They need help.

But when you go overseas and you look at our competition, it subsidizes its industries. And they don’t have the government making demands on every single thing.

Some of the rules have really been good. Like for instance, I used to fuss about clean air. I’m now one of the biggest proponents of clean air. You could eat off the floors at our plants. That environment is good for the people. It should be a nice place to work, it should be clean, it should be safe.

The government does do some things that are beneficial. But some of the things they do are really dumb, like rainwater preparedness, storm water runoff. How am I supposed to prevent six inches of rain ... why is that my responsibility? God’s going to do what God does. I wish he’d send some our way.

STN: Your company, starting when your father was in charge, has a long history of giving back to the community. Please address the importance of that.

Foil: I think companies have an obligation to the citizens of the area from which they operate, not just the ones who work there. And given that they have the resources to make a difference, they should endeavor to make a difference. I’m a big believer in that.

STN: Going forward, what is your strategy for growth and prosperity?

Foil: I think there’s a finite amount of what we can do because we are not a commodity house of any description. I think there will be pockets of opportunity like the whole green scenario. We’re taking advantage of the green scenario. But we’ve been doing the green scenario since 1960. ...

That reminds me of a story about “The Shadow,” (begins speaking in bass voice) “Who knows what opportunities lie out there for textiles?” When you think about it, our biggest competition probably is going to be India in the next 20 years. They’re going to be cheaper than Pakistan and they’re smarter, in my opinion. And they’re loading up on the newest technology.

But what you’ve got is when something is being driven by mistake, what are they going to do? They’re going to be going after amazing amounts of volume of the things they can do like plain-Jane sheets, towels, washcloths, whatever. They will pound it out and sell it to where some of these retailers can’t say no. We want to stay out of the way of that. We want to be on the cutting edge of what’s new and different and be able to offer those kinds of resources to people who are going to be able to differentiate themselves from the masses.

EDITORIAL: An Inconsistent Truth

”A foolish consistency is the hobgoblin of little minds, adored by little statesmen, and philosophers and divines. With consistency a great soul has nothing to do. He may as well concern himself with the shadow on the wall” – Ralph Waldo Emerson

Emerson’s words from his essay, “Self-Reliance”, could easily apply to

Tuscarora Yarns, the big little textile company in Mt. Pleasant, NC. Except for givens such as color, quality and service, the yarn spinning company has eschewed consistency for much of its 109 year history – or at least In the last 40, under the leadership of chairman and CEO Martin Foil, Jr. That is to say, it has continually reinvented itself to avoid the comfort zone trap – a place in which, perhaps, many textile companies have found themselves during this globalization tide.

One thing we’ve learned during our extensive interviews with Tuscarora officials for our Textile Southern edition is this: The company is one of the most progressive we’ve ever seen, in textiles or otherwise. Define it as you like – cutting edge, out of the box, forward thinking – but understand that Tuscarora is enjoying great success in a world that’s not been so kind to many of its domestic brethren.

As you can read in these pages, the company is one of the first to realized that one day, the goose that had laid the egg for so many years would be cooked. So it began to explore the world of exporting and, in the late 80‘s, formed with more than three dozen other yarn spinners the American Textile Export Company (AMTEC). and for nearly two decades now, Tuscarora has sold its products abroad. Through hard work and a dedication to this mission, the company has consistently found new markets for its yarns. In another ground breaking move, the company was one of the first to call on retailers directly and such downstream thinking has proven effective.

LOOSE ENDS: Ying and Yang

The top two executives at Tuscarora Yarns of Mt. Pleasant, NC. Aren’t exactly two peas in a pod.

After all, Chairman Martin Foil Jr. is a Southern American industrialist and President Peter Hegarty is a worldly British sophisticate.

At first blush, Foil comes off as a gruff, no-nonsense, humorless man of big stature with a booming voice and an opinion on everything; Hegarty as a polished, dapper, articulate man of reserved countenance and playful spirit.

But beneath the surface, you’’ find in Foil an affable, erudite Teddy Bear and a bent for jest – and, in Hegarty, someone who cal roll up his sleeves and devour a North Carolina barbecue sandwich as well as any Tar Heel around.

And you should see ‘em together.

At appropriate times, they play off one another like a comedy duo. And when it’s time to get down to business, they work with a sense of gravity and shared purpose, though they occasionally disagree.

Their exchanges often oscillate between matter-of-fact discourse and waggish banter. For instance, answering a question about Foil’s management style and the company’s culture during a recent interview, the repartee occurred:

Hegarty: “The good thing about Martin is he listens to what we have to say. He doesn’t always agree with us and we don’t always agree with him. Its not a dictatorship. It’s teamwork and that’s a very, very big key to what we do”.

Foil: “The other thing it’s a week lost if he doesn’t get fired at least three times a week”.

Hegarty: “I really get fired every day”.

Together, they make quite a team. As leaders of a small but global production company, they have created a vision and led the company to a great level of achievement during these challenging times.

Hegarty and Foil also chare a mutual admiration of one another. Hegarty is particularly enamored with Foil’s right-brain aptitude, which one may not typically see in an analytical, rational person such as Foil.

“Martin is so creative”, Hegarty said, “He’s definitely our driving force in creativity. He’s 74 years old, and he’s seen every trend you can think of in the textile industry, so he knows what’s going to come back around. Martin has this ability and great color sense. He has a vision of putting a product together and colors like no-one I’ve ever seen.”

But one of Foil’s traits is a little nettlesome to Hegarty, he said.

“One of the biggest problems I have with Martin is his memory,” he said with a mischievous smile. “You know, he’s getting old now and you worry about his memory. But the problem is not that he has a bad memory – he remembers everything.

Foil hired Hegarty full-time in 2001 when Tuscarora became majority owner of the company Hegarty led, AMTEC, a cooperative owned by a number of US yarn spinning companies. Having worked with him for several years, Foil knew that Hegarty would bring plenty of international acumen to the table as the company boosted its export business, he said.

“Peter is a consummate salesman and a good politician,” Foil said, “If you’re gong to make profits, which is the key to staying in business, then you have to take these roads and unlock those doors to get there. Peter’s a big key to that. He’s extremely good at what he does, He’s the best I know. But everybody has an Achilles heel”.

Foil the hollered down the hall to Hegarty: “We’re not going to lunch, To heck with you”.

He then turned and in a hushed voice said, “I think we gee haw all right together”.

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