If ever there was a need to support our hometown roots, it is now.
If ever there was a moment to pay homage to our past and to reflect on how it forged our present, it is now.
If ever there was a chance to thank local business for remaining local business, it is now.
If ever there was an opportunity to embrace a cause, it is now.
If ever there was an occasion to offer a kind word, a gentle thought and perhaps a silent prayer, it is now.
If ever there was a reason to look back in order to step forward, it is now.
If ever there was a day to comfort a frightened neighbor, it is now.
As announced on the front page of last Tuesday’s edition of this newspaper, a fine old friend — Hardwick Clothes Inc. — has filed a voluntary bankruptcy petition for Chapter 11 reorganization.
Just the word itself — bankruptcy — breeds fear in the hearts of many who are wary of its message or who have felt its pain. But now is not the time for alarm. This is not intended as a eulogy.
A longstanding friend to the Cleveland and Bradley County community since 1880, America’s oldest privately held clothing manufacturer is certainly facing the toughest challenge in its proud 133-year history.
But leaders believe the longstanding company will emerge from this setback as an even stronger player in the clothing industry. To do so will mean finding answers to difficult questions. It could also hinge on new business partners who are willing to enter into a competitive field.
Because of lower labor rates and cheaper processes, foreign competitors have an edge on the race to sustained solvency; at least, in the clothing industry. Over recent years, international rivalries have tested U.S. manufacturing in many arenas. But that doesn’t mean the proud U.S. label is dying. It simply means innovation, production smoothing, cost effectiveness and product quality must rule the day.
In the case of Hardwick Clothes, solvency has nothing to do with the equation. The problem is one that has been faced, and is still being faced, by many major American companies. It is the question of employee pensions, especially those that are underfunded.
Hardwick Clothes had maintained a healthy pension plan since 1966. In 2009, according to Tommy Hopper, chairman and president, the company began experiencing fiscal challenges — probably related to The Great Recession — that made it difficult for the company to maintain the plan while keeping the company operating.
The difficult decision to discontinue it came in 2011.
Hopper’s explanation to staff writer Brian Graves said it all: “Because of the age of our company, it was more a demographic issue. That, along with the economic downturn and the reduced stock market, all made the plan impossible to maintain and keep the company running. It was a good plan for its time, but was just no longer feasible for us.”
Make no mistake. Hardwick Clothes is not insolvent nor does it rest on the brink of collapse. It is a solid company that is debt-free and pays its bill. But its underfunded pension plan, in the president’s words, “... had become a millstone around our necks.”
Hoping for relief from the Pension Benefit Guaranty Corporation, a federal agency designed to protect pensions in defined benefit plans, Hardwick Clothes received just the opposite response.
The Cleveland-based manufacturer was ordered to pay $7.3 million to the pension now or face a $1.3 million tax lien. A PBGC notice a month later said pay now or face an increased tax lien of $2.3 million.
Faced with little, if any choice, the company filed for Chapter 11 protection last Monday. It was a sad move — given the plant’s longevity — but in Hopper’s view it was a necessary one.
For the company’s future, as well as for its 225 employees, Hardwick Clothes needed a lifeline; at least, one strong enough to allow leaders the time to develop a new business strategy.
Other companies have sought bankruptcy protection. Many have survived. Some have fully rebounded.
To this longtime member of our Cleveland hometown, we wish the best; and we do as well for its fleet of dedicated employees.
It is not a time for panic.
It is more a need for calm heads and business savvy.
We believe the decision makers at Hardwick Clothes offer both.