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Liberty Fibers faces another shutdown

Last updated: 8:41 PM, 04/07/2008

Source: The Newport Plain Talk

LOWLAND-Employees of Liberty Fibers in Lowland have reportedly been told to "go home and not to report back to work," according to several sources and employees of the former Lenzing Fibers facility.

Although company officials had not, as of press time on Friday, returned several phone calls from the Plain Talk, more than one Liberty Fibers employee has told the Plain Talk that the plant has been shut down. Liberty Fibers maintenance department employee Ronnie Wardroup told the Plain Talk on Thursday that, not only had production staff been told on Monday to go home and not return to work, but that "the maintenance department has been shut down as well. "The last time this happened, the production crew went home, but they kept the maintenance crew here," said Wardroup.

"This time, it doesn't look like they mean to start up again."

Liberty Fibers, which, in its heyday as American Enka, employed about 4,000 people-many of them from Cocke County-has a long, if checkered, history in the area. Both BASF and American Enka have owned the plant in the past.

Two years ago, a group of about 60 salaried employees of the company filed a $20 million lawsuit against the multi-national corporation in an effort to recoup alleged losses caused, they said, by cost cutting measures and restructuring by the company.

The group of employees maintained in its lawsuit that, "the company has knowingly attempted, during the course of several years, to bilk them out of their retirement benefits."

Liberty Fibers CEO Craig Barker announced then that his company was "continuing the process of restructuring its operations and has changed its name to Liberty Fibers Corporation," and that the company has filed for protection under Chapter 11 of the US Bankruptcy code, while continuing the reorganization.

Barker further asserted in his announcement that the move would, "combined with the finalization of securing a new $10 million revolving line of credit, allow the company to restructure its remaining debt while finalizing the implementation of a series of cost reduction measures."

Although Barker stated that, "We firmly believe that this operation can be returned to profitability," he added a caveat.

"However, to do so means we have had to make a number of difficult decisions and institute a number of changes from the way we previously operated," he said.

The company instituted a brief layoff period in June, during which several Lenzing Fibers employees were automatically entered into the Tennessee Department of Labor and Workforce Development database as eligible for unemployment claims.

As yet, however, employees of the company have yet to receive official notification of their employment status or of their unemployment benefit options during the current apparent shutdown.

Liberty Fibers Corporation has sales of about $100 million and is the sole manufacturer of rayon staple fibers in North America.

End products using rayon include: medical disposables, personal care, feminine hygiene, baby wipes, industrial, home furnishings, and apparel.

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