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Carpet maker's closing puts Dahlonega in 'crisis'

State will help 366 employees who will lose their jobs

POSTED: April 19, 2008 5:00 a.m.
HARRIS BLACKWOOD/The Times

The Mohawk Carpet factory in Dahlonega is closing, putting 366 people out of work.

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DAHLONEGA — Less than six months ago, Dahlonega Mayor Gary McCullough met with representatives of Mohawk Carpets to discuss a $3 million to $5 million expansion of their carpet yarn plant in Dahlonega.

On Monday, plant officials called to tell the mayor that the plant would close, leaving 366 people out of a job.

"We were in shock," McCullough said. "Our first thought is with the people who are getting laid off. They are losing the jobs that some of them have had all their life."

The news spread like wildfire through Dahlonega. The plant, which opened in 1955, was the first industry in what was then a remote mountain town. It was known by locals as the "Pine Tree" plant, a reference to the thicket of loblolly pines that surrounds the 375,000-square-foot plant, which has nine acres of covered manufacturing space.

J.B. Jones of Frogtown, who served as Lumpkin County’s sole commissioner from 1973 to 1996, took a job sweeping floors in the plant when he returned in 1956 from U.S. Army service in Germany.

"They paid me about $1.15 an hour," Jones said.

He said the news of the plant closing was like a death in the family.

"Those were jobs that kept people here in Lumpkin County," he said. "That plant put a lot of brick on houses in this county. I was able to stay here, build a home and raise my children because I had a job."

Jones said the plant had about 750 workers when he was "hired on." His sister, Annie Sue Wiley, took a job at the "Pine Tree" when she was 17 and stayed until she retired.

Jones recalled the community spirit of the company in its early days, donating carpet for local schools and the hospital. One of his favorite memories was the company’s donation of 30 acres of land for the present county recreation park.

"This is a significant loss of jobs and will have a huge impact," said Gary Powers, president of the Dahlonega-Lumpkin County Chamber of Commerce.

Both Powers and McCullough believe that nearly half of the current work force lives outside Lumpkin County. Company officials told McCullough that 35 to 40 percent of the workers are Latino.

However, there are a number of workers who have always worked at the "Pine Tree" plant.

"Many are over the age of 50," Powers said. "It is much more difficult to be hired once you’re over 50."

Tuesday morning, a meeting that included elected officials, economic developers and representatives of social service agencies gathered to plan their strategy in the wake of the news.

"This is the first time I’ve seen the city, the county, the development authority and the downtown development authority all get together and realize that we have a community crisis," Powers said. "But we’re not focused on the closing of this huge plant but rather on the hurt that families are going to go through. What can we do to help them stay on their feet?"

Lumpkin County Commission Chairman Steve Gooch said this is a time to put differences aside."This is an example of where we have to pull together and try to help the citizens," Gooch said. "There are 366 people who are going to lose their jobs, and it doesn’t matter if they’re from Lumpkin or not. It’s going to have an impact on a lot of people."

The plant had three owners through the years. The first, Lees Carpets, was acquired by textile giant Burlington Industries, which fell on hard times in 2003.

Burlington, in bankruptcy, was acquired by W.L. Ross & Co., which would spin off Lees Carpets in a $346 million deal to Mohawk.

The layoff is the sixth for Mohawk since September, when 270 workers were idled at Mohawk plants in Calhoun, Dalton and Hiawassee. In February, another 216 lost their jobs at plants in Armuchee and Dalton.

While company officials at Mohawk did not return calls seeking comment, the carpet industry has faced a sales decline on two fronts. First, more and more new homes have been using other flooring choices, such as hardwood and tile. More recently, the industry has felt the effects of the slowdown in the number of housing starts.

State Labor Commissioner Michael Thurmond said his agency will provide assistance to employees losing their jobs at Mohawk.

"The plant closure at Mohawk Industries in Dahlonega will create a difficult situation for the workers and the community," Thurmond said. "And I want the workers and their families to know they’re not alone in dealing with this difficult situation."

Labor department representatives are to meet with company officials on Thursday to discuss the various programs, including job training and day care assistance, that will be available.

Employees will be eligible for state unemployment insurance, which is administered through the Labor Department. The company is said to be offering a package that includes health insurance coverage for a 90-day period after the plant closes on June 6.

Both Gooch and McCullough have plans to visit Mohawk’s corporate offices in Calhoun to discuss the future of the building once it closes. The sprawling brick building has a water tank and could be attractive to an industrial prospect.

Another concern for the city of Dahlonega is the loss of revenue for the water system. Mohawk is one of the largest water customers at 1 million gallons per month.



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