Walking amid hundreds of sewing machines crammed together as a jackhammer pounds away, Edward Zitka surveys the transformation of London Fog Corp.'s last U.S. factory.
"No doubt I'm nervous," said Mr. Zitka, who is overseeing the plant's renovation and is slated to be its general manager when it reopens later this month. "It fits on paper. When you actually go to put it in place is going to be the proof of the pudding."
The revival of the plant is a last-ditch effort by the nation's premier raincoat and outerwear company, which just a little more than a year ago had five factories operating in Maryland and Virginia, to maintain an American manufacturing presence.
The financially strapped Darien, Conn.-based company is pouring $2.1 million into the Northwest Baltimore factory with the aim of creating a highly efficient if scaled-down plant that can quickly plug holes in a retailers' inventory.
How well it succeeds will determine whether London Fog, which has operated in Baltimore for the last 72 years, continues to make raincoats in the city of its birth.
Both the city and state, in an effort to help preserve it, are providing $1.85 million worth of aid in the form of debt reduction, rent relief and a half-million-dollar grant for training and plant renovations.
When the plant reopens on Jan. 31 it will be a very different place than it was when it closed in mid-October.
Fewer workers will turn out fewer coats in fewer styles, but in nearly half the time. All steps of the production process will be under one roof. And the workers will be doing their jobs differently.
In the old plant, 280 workers turned out 275,000 of the company's high-end London Fog brand in 15 different styles each year.
The renovated plant will have 190 to 220 workers making 200,000 coats a year with only five variations -- four of the inexpensive Towne brands and one London Fog. The time to make each coat will be cut from 18 days to 10 days.
Part of that time is possible because the cutting of the material will now be handled in-house by a $300,000 computerized cutting machine that replaces three to four workers. Before, cloth cut at another plant was trucked to the Park Circle factory, adding days to the production process.
But the changes go beyond plant layout, space utilization or product mix. The fundamental way that employees work will be changed.
"It's a change from going to work every day and being told what to do, to having some say in the work," said Mike Yachera, London Fog's corporate engineering manager who is working with Mr. Zitka on the renovation.
The plant will be moving toward what is called "modular manufacturing" -- an approach that emphasizes teamwork rather than individual efforts.
Under the old method, workers were assigned individual tasks, which they did repeatedly, passing on the partially completed coat to workers at the next stage. But under the new system, workers will be able to do two or three different tasks and will work in teams that decide who will do what.
"We will redevelop the supervisors into coaches rather than bosses," Mr. Yachera said. "The primary effort is in the team play."
The new team methods were originally scheduled to begin later. But because of physical changes in the plant, the company is now looking at a pilot effort soon after the plant opens, Mr. Yachera said.
"The opportunity cropped up," he said, declining to discuss it in detail because talks with the union must still be held about the proposal. But he said it would cut a series of steps that took eight days down to one.
To implement the new program, workers will have to undergo an average 12 weeks of training, Mr. Zitka said. Besides learning new skills, the workers will also take courses in team building, problem solving, conflict resolution and decision making, he said.
These new work methods, rather than the new machinery, will be the primary driving force behind slashing the time to make a coat.
For instance, the cutting machine, made by Gerber Garment Technology Inc. of Tolland, Conn., will cut the fabric with more accuracy and less waste. But it will only cut about one hour off the time to make a coat, Mr. Yachera said.
Other timesavers are the consolidation of all production steps in one building and the reduction of the number of styles made, he said.
Shortening the time to make coats is critical if the plant is successful in the new "quick response" effort.
The goal of quick response, said Edward Frey, executive vice president of operations, is to prevent lost sales because a particular style is out of stock at a department store. This often happens because retailers have to order stock months in advance and can not quickly replace popular items.
The problem is compounded when manufacturers rely on overseas production, which further delays deliveries,
With an American plant -- especially one with faster production -- London Fog hopes to plug inventory holes when they occur, leaving customers and retailers content.
"This is not available for our competitors," Mr. Yachera said, noting that most raincoat production is now overseas. "It's a matter of going after a business opportunity."
The new arrangement comes after a year-long battle between the company and the Amalgamated Clothing and Textile Workers Union that represented the workers. In the end, five London Fog plants were closed permanently and about 1,300 workers lost their jobs.
London Fog also employs about 500 at a distribution center in Eldersburg.
When all the plants were operating, more than 450,000 London Fog coats were made annually at factories in Hancock, Williamsport, Boonsboro, Portsmouth, Va., and two in Baltimore. But now the bulk of the company's production hasbeen shifted overseas, leaving only the Park Circle plant.
And those who kept their jobs had to agree to a $1 an hour cut in their base wage, reducing their pay to $6.90 a hour or about $14,300 a year.
To help ensure that this remaining plant survives, the city and state agencies gave London Fog an aid package that cuts its rent and provides money for training workers and renovating the building.
The debt on the five-year-old, 54,000-square-foot-building is being reduced to $1.75 million from $3.1 million, according to Robert L. Hannon, executive vice president of the Baltimore Development Corp., the city's quasi-government development agency.
Additionally, the state is foregoing any payments for its portion of the debt for the next two years. This reduces London Fog's monthly rent on the building from $23,509 to $6,600 for two years starting Jan. 1 -- an annual savings of more than $200,000. After the two years, the rent will increase to $14,500, still 38.3 percent less than the original rent.
Additionally, London Fog is receiving a $500,000 grant from the state's Sunny Day Fund to pay for the training and capital improvements and relocation of equipment.
"These are precious jobs," said Mark L. Wasserman, secretary of the Department of Economic and Employment Development. "Their impact not only includes Baltimore but Carroll County," he said, noting the survival of the plant also ensures the future of the Eldersburg center.
And London Fog needs all the financial help it can get as it struggles to recover from the aftershocks of the one-year reign of Arnold P. Cohen, who was ousted as chairman and chief executive officer of the company in August, as well as changes in the marketplace.
A victim of changing fashion trends and competition from cheaper private-label coats, the company's coat sales have fallen for the last several years, according to analysts that follow the company.
To make matters worse, the unseasonably warm autumn in the Northeast also has cut into sales, according to Alan G. Millstein, editor and publisher of Fashion Network Report in New York.
And even though the weather has gotten cooler in the last month, retailers are heavily discounting London Fog coats for the Christmas season and the company will have to pay part of that cost, Mr. Millstein said.
"They will have to pony up a major portion of mark-down money," he said. "It's called share the joy."
Debt has also ballooned in the last year because of the various excesses of the Cohen administration and the acquisition of Pacific Trails Inc., a Seattle-based outdoor clothier.
As of Nov. 27, 1993, the company had long term debt of $162.9 million, according to a report by Dun & Bradstreet Corp. The company's debt has since grown to $425 million by this summer, according to a July 8 filing with the Maryland Department of Assessment and Taxation.
But the debt, which is owed to a group of banks headed by Chemical Bank of New York, is only secured by $277.3 million worth of assets, of which $1.1 million is real estate and the rest is inventory, equipment and other nonreal-estate possessions.
The company has shied away from revealing its finances. In the past, the company filed information with Dun & Bradstreet, a major credit reference source for most businesses.
But D&B; has been unable to pry out any new information from the company since getting some financial figures more than a year ago.
"That means it's terrible," said Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting firm. "That's a very bad sign to its suppliers."