London Fog Corp.'s last U.S. factory restarted operations yesterday in Baltimore, beginning a three-month process of getting back to full production after being idle since October.
But over this happy event looms the continuing struggle of the Eldersburg-based company to restructure its $425 million debt, which the company has conceded it cannot handle without some relief from its creditors.
About 25 workers and supervisors yesterday were cutting, stamping and labeling fabric for the company's famous rain coats even as contractors were putting the finishing touches on the $2.1 million retooling of the 54,000-square-foot factory in the Park Circle Business Park.
The final epaulets and buckles for the first set of completed coats will not be attached until Feb. 20, according to Edward Zitka, manager of the plant. And even then the plant will be producing only 60 coats a day -- a fraction of the 900 daily production expected when the plant is in full swing.
But yesterday's humble beginning was long awaited by London Fog's remaining domestic manufacturing workers.
"I'm glad they opened back up," said Alma Pollard, who has worked for London Fog for 27 years.
Starting with a small crew in the cutting department, the factory's work force is gradually being increased as more workers are recalled and trained in the new processes. the factory will reach its full strength of 220 workers by mid-May, Mr. Zitka said.
London Fog also operates a 500-person distribution and administrative center in Eldersburg. Just last month, the company announced it was moving its headquarters back to the Carroll County facility after spending less than a year in Darien, Conn.
Closed in mid-October for its make-over, the Baltimore plant is the company's last domestic factory. The company closed five other plants in Maryland and Virginia last year, eliminating more than 1,000 jobs. The company, which shifted nearly all of its production overseas, said it cost $18 a coat more to manufacture in the United States.
The Baltimore plant was spared only after workers agreed to a $1-an-hour pay cut that reduced their base rate to $6.90 an hour.
But workers were still happy to be back.
Ms. Pollard, who had worked at the company's Brookhill Road cutting facility, was laid off a year ago when that plant was closed. She was able to find another job at the Jos. A. Bank Clothiers Inc. factory in Baltimore in August, but that job ended in September when a third shift was eliminated.
"Considering the economy and everything, I'm lucky to have a job now," she said. Still, she says, "I wish they didn't lower the pay, because the cost of living is steadily going up."
Margaret E. Christian, a 20-year-veteran of the plant, welcomes the change in her job, moving from sewing to the operation of a new $300,000 computerized cutting machine.
"I feel great because it's different," she said. "I'm not sewing."
While their pay was cut substantially, London Fog workers were able to keep their medical benefits. "That's a big factor, I don't care where you work," said Carmen S. Papale, regional manager of the Amalgamated Clothing and Textile Workers Union.
To meet its foreign competition, the plant is adopting a "quick response" strategy, which emphasizes speedy replacement of gaps in retailers' inventories -- something that cannot be done by distant foreign manufacturers.
But while the renovation at the Baltimore plant is nearing an end, the company is still trying to restructure its $425 million debt. The company, which has annual sales of about $350 million, will not be able to make some quarterly interest payments this year, according to London Fog's new chairman and chief executive officer, Robert E. Gregory Jr.
But he says he is confident that he will be able to persuade creditors to give the company a break rather than to force it into bankruptcy.
"Those discussions are ongoing," said Robert D. Siegfried, a spokesman for the company.