10 JulMacy’s Blows The Doors Off

Guess, CK Calvin Klein, Esprit and Levi Strauss & Co. are all included in a project to install improved vendor shops, each with different opening dates, but all in time for the crucial back-to-school season.

With all four firms, the in-shop improvement plans will go beyond the Macy’s Herald Square store. Plans are to roll out the new prototypes in other stores, mostly within the Federated chain.

Esprit executive vice president Hank Sinkel called Federated the “most supportive” so far of his firm’s “very aggressive shop-installation program.”

For the back-to-school season, Esprit will open 40 newly designed, bigger shops in key Federated locations around the country, Sinkel said.

Besides Macy’s East, Esprit is installing them in Macy’s West, Burdine’s, Rich’s-Lazarus and The Bon Marche, Sinkel said.

macnyc“What’s happened is that, finally, the retailers have realized brands are very important to this customer,” he said of the 15-to-25-year-old women Esprit is targeting. “Surveys say this woman spends a large amount of her income on clothing. There haven’t been core resources to go after this customer.”

Specifically, Sinkel calls this customer the “younger better customer” as opposed to “bubble gum junior,” a term that generally indicates younger and less expensive junior styles.

At Macy’s Herald Square, the Esprit shop will greet customers as they step off the escalators. Sinkel is excited about the location because of the “enormous amount of traffic” from the escalators. Before, Esprit’s shop was where the new Guess shop is now: to the right of the elevators.

The Esprit shop, scheduled to open the third week in July, will be about 3,000 square feet, with 2,400 square feet of selling space and the rest general fitting rooms and a stock room. The previous shop was roughly 2,500 square feet, according to Sara Burch, visual display manager for Esprit.

All new fixtures will be used, and two large-screen TVs will show videos of “great images of Esprit — past, present and future,” Sinkel said.

He said there was “some support” financially for this building project from Esprit and noted that the company would also financially support staffing. Currently, Esprit pays a full-time merchandise coordinator who works on visual presentation and filling in stock in the department.

Sinkel noted that similar shops the firm has built have yielded “double-digit increases” in sales.

A new Esprit shop opened in May at Burdine’s in Dadeland Mall in Miami. Esprit has also installed five shops in select Dillard’s stores.

A new 1,200-square-foot Esprit shop will be installed in Macy’s West in San Francisco in November. Its current shop is 750 square feet.

Sinkel said the spaces in some of the doors will do more than $1 million annually, while others will do that amount of business in a single season.

At Guess, cosmetic touches are still being made in its new shop, which opened in the second week of June. The new Guess shop at Macy’s was formerly 4,000 square feet and is now 3,900 square feet, said David Bradshaw, director of shop development at Guess. Despite the slightly smaller space, the fixturing has more capacity.

Wall cabinets will be used rather than shelves, and nesting tables will have risers, which they did not have before. Many fixtures will now allow for double hanging.

“It increases our capacity from 2.5 units per square foot to almost 4 units per square foot,” said Ken Duane, president of worldwide sales for Guess.

Duane said the shop has kicked off with healthy sales — “high double digits against last year,” both at Macy’s Herald Square and at Burdine’s in Miami’s Dadeland Mall, where the firm opened a shop June 12 on the junior floor — the only two shops of its kind.

By the end of the year, the firm is scheduled to roll out 250 new or expanded shops for its women’s and men’s divisions within the Federated chain, Dayton Hudson and Dillard’s.

In addition to the “more stock on less space” features, Duane said the new shop will showcase new garment packaging, new logos and new images.

“The new shop is consistent with the new Guess image — sexy, young adventurous,” Duane said.

Levi’s already has a vendor shop in Macy’s, but is giving it an attitude adjustment.

“The changes being made there are not about elevating sales, but about elevating the image,” said Amy Rosenthal, senior marketing specialist for Levi’s. “The objective behind it is to enhance the retail presentation of the brand by simplifying and improving the shopping experience for consumers. Another objective is it’s a way for our key retailer accounts to stand out from the competition.”

Rosenthal said this new shop isn’t a concept that is being rolled out, per use, but is a “hand-picked situation given to premier retail accounts for the brand, as a perk to set them apart from other retailers.”

The 2,800-square-foot space is slated to be finished by early August.

When a customer walks into the shop, Rosenthal said, she’s going to feel “spoken to from a woman’s point of view.”

The space is being built to appeal to women, by using larger dressing rooms with softer lighting and a more comfortable focus area with seating.

The entire shop will also be “color-stripped by fit,” meaning that from the back wall all the way through the shop to the front aisle, color-coded floor fixtures will navigate consumers.

For example, one color strip will mark “slim fits,” another will mark the SilverTab line, another will point out “relaxed fits.”

The shops will be “mega-merchandised,” Rosenthal said, meaning they will offer a full breadth of product from juniors to regular sizes, “so they speak to every woman.”

Levi’s chose Macy’s for its first prototype because the store is a “key retail account” for the company, according to Rosenthal.

At CK Calvin Klein, a spokeswoman said the CK Calvin Klein Jeans juniors concept shop on the fourth floor of Macy’s is going to increase from 2,570 feet to 3,200 square feet with the new shop. Construction on the shop will be completed by July 25.

The new shop will feature a CK Calvin Klein Khakis lifestyle concept shop within the space.

“The Macy’s junior CK Calvin Klein Jeans shop is the first of the nationwide roll out to 250 doors for 1998, which will bring the total CK Calvin Klein Jeans concept shops to 450 doors,” said the spokeswoman.

Discussing the vendor shop concept, Doreen Denton, divisional merchandise manager for juniors at Macy’s East, noted the power of brands.

She said that the ability of department stores to offer certain brands is clearly their “edge” over such competitors as the aggressive specialty junior chains.

Overall, she noted that the Macy’s junior floor at the flagship will slowly undergo some environmental changes. Denton said they are trying to lighten up the junior space at Herald Square to make it “less industrial in atmosphere, and make it more contemporary and hip.”

25 JunActivewear Makers Still Active

Some venerable activewear names simply balk at the thought of quitting.

Six familiar firms — each of which built a business and a reputation on one specific sport — are refreshing their images with a variety of strategies, from additional categories, trunk shows and endorsement deals to ad campaigns that reflect their history.

Executives at Converse, Lacoste, Rossignol, Head, Adidas and Champion — firms that are between 47 and 88 years old — feel that part of their appeal to women is their athletic heritage.

Adidas: always cool, always creative.

Adidas: always cool, always creative.

“Fortunately, now what’s old is new and what’s new is old,” said Jim Solomon, senior vice president of marketing for Converse, the North Reading, Mass., athletic footwear company that opened in 1909.

Still widely recognized for its Chuck Taylor canvas basketball sneakers introduced in 1923, Converse is focusing now on its performance basketball legacy.

“We find people around the world connect us to our American sports heritage, which was creating the first basketball shoe,” said Solomon. “If there’s anything current we can do to link us to that, people understand.”

Converse’s endorsement deals with flamboyant Chicago Bulls rebounder Dennis Rodman and Nickie McRae of the American Basketball League have updated its image, Solomon said.

Converse activewear has been licensed to Active Apparel Group for two years. Sales this year are expected to increase 10 percent over last year’s $9 million, industry sources said.

Additional growth is planned for 1998, when Converse will introduce its first full line of women’s basketball shoes, Solomon said.

In the early Eighties, when Converse produced its own activewear, sales were not as strong. The line was too casual and didn’t have enough of a performance image, Solomon said.

Head has also had its share of challenges. It was founded as a ski company in 1950 by Howard Head, an engineer who developed laminated alpine skis in his garage, but also became known as a supplier of tennis equipment. Expansion into other sports areas didn’t work nearly as well, said president and chief executive officer Carl Helmetag.

“Head, as a company, has had a difficult transition,” he said. “In 1993, we introduced expedition wear, skiwear and other types of apparel. The company got beyond its resources in terms of people, sales force and dollars, so in 1996 we got out of the whole business, except for tennis.”

As a result, annual volume took a dive. This year, women’s apparel is expected to generate only $5 million in sales, compared with $64 million in 1995. For 1998, Head aims to increase sales to $6 million, Helmetag said.

Head reduced its domestic workforce from 150 to 52 employees this year, and Helmetag feels the company is back on track.

To play up its tennis image, Head signed a deal in October with Chandra Rubin to endorse rackets. Given the multimillion-dollar deals that other companies can offer, Head feels it’s not yet in a position to pursue that kind of promotion with big names for its apparel.

For example, Andre Agassi’s apparel-endorsement deal with Nike is 10 times greater than his deal with Head for rackets, Helmetag said. Agassi reportedly earns $10 million annually from Nike.

Lacoste has branched out a good deal since 1929, when French tennis player Rene Lacoste stitched an oversized crocodile motif to his shirt.

Men’s sportswear was the company’s focus until after World War II, when women’s apparel was introduced. The brand’s popularity peaked in the U.S. in the late Seventies, according to Chrys Fisher, who joined Lacoste in December as president and ceo.

In the Eighties, Crystal Brands, which also produced Izod sportswear, licensed the Lacoste name in the U.S. and began distributing an Izod Lacoste label to the mass market. In addition, Crystal Brands used offshore facilities for production, resulting in poorer quality, Fisher said.

In 1993, Lacoste bought back the rights to the brand for the U.S. Lacoste executives waited until the spring of 1994 to position the brand in such better specialty stores as Neiman Marcus, since Izod Lacoste apparel was being “dumped” with liquidators prior to that, he said.

“It took two years to clean our distribution channels,” Fisher said. “There had to be a lot of confusion and misunderstanding. That part is behind us, but we still deal with the legacy of our association with Crystal Brands.”

Lacoste is now pushing its sportswear with ads in major fashion magazines, trunk shows and runway shows.

But it doesn’t want to lose the active customer, so Lacoste is signing endorsement deals with pro golfers.

After holding focus groups with “tens of thousands” of Lacoste’s female customers, the company identified its two key customers –nonworking, cosmopolitan, married women over the age of 45 who live outside major cities, and single, fitness-oriented female professionals between the ages of 28 and 35 who live in cities, Fisher said.

Fisher, who formerly was president and ceo of Hermes U.S., said annual sales are expected to double each year for the next five years. He would not disclose figures. Worldwide sales are estimated at $750 million annually.

Young women are expected to be key to the company’s growth, he added. Women make 70 percent of all purchases at the seven Lacoste stores in the U.S.

Another newcomer to Lacoste, Mary Goldberg, who joined the company in April as merchandise manager, will coordinate the trunk shows. Starting in November, about 60 better specialty stores are expected to have three-day trunk shows.

In August, actor Ted Danson will host a Lacoste fashion show at mannequin manufacturer Pucci International here for retailers and editors. Designed to showcase the brand’s expanded offerings, the show will feature activewear, swimwear and sportswear, as well as two new categories — knitwear and traditional outerwear.

Champion and Adidas are both counting on their athletic heritage to build their lines.

Founded in 1922, Champion built its business producing college football uniforms. In the Fifties and Sixties, Champion T-shirts and shorts were issued by many state universities and public high schools, Miller noted.

The Champion name is a major selling point with female shoppers, said Hinda Miller, vice president of communications for Champion JogBra, the label for the women’s products. As a result, Champion JogBra emphasizes the Champion logo on its products.

“When we go out in the marketplace, Champion has much higher brand awareness. Champion elicits a sense of authenticity and quality,” she said. “Women just know Champion and that’s what they buy. They couldn’t care less about JogBra.”

Miller, who is credited with developing the first sports bra in 1977, teamed with Champion in the spring of 1994. At that time, JogBra and Champion co-branded, since they shared the same licensee, Sara Lee Corp.

The new label offered wide appeal, since 65 percent of all Champion purchases are made by women, Miller said. Sport bras were the focus of the debut collection, but a full line of activewear, including fleece coverups and jersey shorts, was introduced in fall 1995.

Champion JogBra will launch an eight-piece collection of activewear for large-size women at the National Sporting Goods Association’s annual trade show in Chicago this month, for spring 1998 selling.

Playing up its athletic heritage is key for Adidas America. This spring, the company published booklets describing how Adi Dassler, a cobbler and recreational athlete, founded Adidas in 1920. A few hundred consumers request the booklet each month, an Adidas America spokesman said.

Among the things readers learn is that Adidas America was formed in 1993 by two former Nike executives, Rob Strasser and Peter Moore. Moore has since died.

In 1993, the Adidas women’s line consisted mostly of basics –T-shirts, running pants and sweatshirts — decorated with the company’s three-stripe signature. Now, Adidas has gotten more specialized, adding specific pieces for soccer, basketball and running.

The company’s philosophy has not strayed from Dassler’s commitment to athletes’ needs, said the spokesman.

“Innovation keeps us on the cutting edge. Sports dictate what we need to do in terms of fabric developments, silhouettes and sizing,” he said.

“We’re holding more focus groups, sponsoring athletic events, doing extensive wear-testing and talking to more female athletes.”

Getting feedback from female athletes is an important strategy for the U.S. arm of Rossignol, which was set up in 1974. Rossignol was founded in 1907 in France.

This fall, the skiing company will enter the clothing business with snowboard apparel. The five-piece women’s collection wholesales from $40 for a wool sweater to $125 for a Teflon-coated polyester canvas zip-front jacket.

The company expects the line to generate at least $300,000 in wholesale volume in the next two years, said Marc Bujold, snowboard divisional manager. About 33 percent of the 700 accounts that carry Rossignol skis and snowboards will offer the line.

To develop it, Rossignol held worldwide focus groups, said Jeanne-Marie Gund, vice president of communications and advertising.

“This clientele of women have definite opinions and they aren’t afraid to pronounce themselves about everything from politics to clothing,” she said.

And they’re also serious about looking cool.

“It’s such an image-driven business. Kids are so concerned with being cool,” Bujold said. “If they haven’t seen an ad, they think, ‘Maybe it’s not cool.”‘

10 MayBurlington Blasting Ahead With Dynamic Creativity

Burlington Industries, one of the world’s largest apparel fabric mills and an anchor of the domestic textile industry, is turning its back on history.

The Greensboro, N.C.-based textile producer is chucking hide-bound traditions to enter a new global era in which speed, creativity and customer service are the keys to success.

“Fashion is one of the best ways to get consumers into the stores,” declared George Henderson 3rd, Burlington’s president and chief executive officer, who oversees more than $2 billion in fabric and yarn sales annually. “And the way to have fashion is through diversity of fabrics. We see an aggressive expansion in apparel fabrics for us in the coming years.”

Burlington "keeps on truckin'!"

Burlington “keeps on truckin’!”

But the trouble, as Henderson sees it, is that “no one — not retailers or manufacturers — wants to take a fashion risk. There is a lack of styling that would otherwise lend a uniqueness to the retail environment.”

Burlington, he said, wants to provide that creative spark.

Henderson’s comments came during a meeting of Burlington executives at the company’s offices here, a discussion that focused on how the mill is formulating strategies to meet the challenges of the apparel and textiles business heading into the new century. Also attending were Bernard Leventhal, vice chairman, and Alex Neely, president of Burlington Menswear.

Like other domestic mills, Burlington has been hurt by excess inventory in its denim division. Burlington’s sales for the six months ended in April fell 6.6 percent to $1.01 billion from $1.1 billion. Apparel fabrics operating earnings dropped 13 percent to $51.5 million. Sales declined 10 percent to $597.7 million. Burlington’s earnings, however, increased 7.1 percent to $30.5 million, or 49 cents, from $28.5 million, or 45 cents.

However, Henderson obviously sees the backup in denim as a temporary condition, and denim is one of the many areas he has targeted for expansion.

A soft-spoken veteran of 23 years at the mill, Henderson was unequivocal about his company’s goals. “Our primary focus is on growth,” he asserted. “And, as a result, we are adding production capacity across all of our divisions.”

Besides Burlington Denim, those divisions are Burlington’s Menswear, which includes women’s apparel fabrics; Sportswear, which makes cotton and knitted goods; Klopman Fabrics, which produces primarily synthetic fabrics; Burlington Madison Yarn Co. (BMYC), a spinner ; Lees, a carpet manufacturer, and a home furnishings segment.

Burlington is in the process of expanding global capacity, in the U.S. and in Mexico for men’s wear fabrics, sportswear, yarn and denim, and in India as part of its joint-venture denim mill there. The mill will also continue to outsource fabrics. “We have to be global, but we don’t have to make everything we sell, and we don’t have to make everything in the U.S.”

A three-year, $40 million expansion at Klopman aims to boost capacity 20 percent by 1999; some spending from the same program will increase capacity at BMYC 15 to 20 percent during the same period. A four-year, $70 million expansion in denim that got under way in 1995 also will increase capacity by around 20 percent.

A generational shift in sourcing will be the foundation on which Burlington, and the domestic textiles industry, can build its future success, Henderson said. Noting that in quantity, Mexico had overtaken China as the leading exporter of apparel into the U.S., he said, “For 20 years there was a negative trend in the U.S. textile business. I see NAFTA fueling positive results here for the better part of the next 25 years.”

To thrive, Burlington must keep pace with the changes. “Our immediate aims are to trim lead times,” Henderson said. “What we want to do is turn out a fashion product that will entice customers, but also do it fast. The emphasis is on fashion plus speed.”

Neely said Burlington will shorten the supplier pipeline by developing new products within one season, and plans to cut the time it takes to produce fancy goods by 25 percent and piece-dyed fabrics by 30 percent compared with six years ago. This will mean shaving the time by several weeks, depending on the fabric. He said the new processes will be targeted to Burlington’s key customers.

That’s not the only change in store. “We are looking at supplying the apparel market from the initial product concept all the way up to the retail floor,” Neely said. “We want to reorganize our product development so that we are working on a focused, rather than mass-produced, basis.” He pointed to Levi’s Slates program as an example of this new methodology, where mill and manufacturer worked together to develop a new collection of fabrics. And this fall, Burlington will roll out a new polyester and worsted wool blend in concert with DuPont and an apparel manufacturer Neely wouldn’t name.

The changes are part of a new paradigm at Burlington, a cultural evolution that Henderson said must be embraced on a corporate scale.

“Attitude and emphasis are as important as machinery,” Henderson said. “Those are the important elements that will drive change, rather than arbitrary goals.”

That Burlington is making a clean break with the past is evident. Said Henderson, “We spec equipment much more for flexibility in terms of changing the kinds of fabrics we can run on a loom, for example, rather than specing for running the largest possible quantities.” That means that Klopman’s Cordova, N.C., facility now runs 135 fabric styles, up from five in the mid-Eighties.

Verticalization is also becoming more important for Burlington, both as a way to shorten cycle times and to ring up sales that in the past might have been left on the table.

“Building inventory is the wrong approach to Quick Response,” said Leventhal.

“We offer apparel production in every segment from sportswear to denim. We don’t own any of our own sewing, but we offer it to customers and manage the logistics.”

Added Henderson, “It’s small as a part of our overall business, but we have been doing it for four years. We can arrange domestic production, but it has to this point been done mostly overseas. We will wait and see what the market asks for before we grow it. That is part of our strategic response. A large part of our business is still with manufacturers, not retailers.”

International sales are another building block in Burlington’s plan. “This is an area of growing importance,” Henderson said. “Our exports have grown 20 to 25 percent per year for the past five years, and now 10 percent of our sales is exports. Our Klopman and synthetics businesses are the fastest-growing segments. We have made changes to accommodate the foreign business, and done things to satisfy the world market.”

10 MarGarment Industry Facing Constant Job Losses In NY

It’s crunch time for Harold Lopato.

No matter how he figures it, Lopato can’t make a profitable shoulder pad in this city and pay his 155 factory workers at the salary demanded by their union, UNITE, during independent negotiations for a contract that expired Monday.

If Lopato, president of Majestic Shapes Inc. in the South Bronx, agrees to the UNITE industry contract issued last month, which calls for a 3 percent annual wage increase over four years, he claims another 155 jobs will go the way 300,000 others have since New York’s manufacturing peak in 1973.

“I absolutely hit a brick wall where I cannot possibly go any further,” said Lopato, who has laid off 70 employees over the past three years.

speakingoutMajestic Shapes, a 51-year-old company that produces as many as 50,000 shoulder pads a day, is the type of New York manufacturer considered most at risk of shutting down, even as the apparel industry, including UNITE, is searching for solutions to reverse the trend of jobs moving to foreign lands.

Sheldon M. Edelman, executive director of the Pleaters, Stitchers & Embroiderers Association Inc., said many of the 60 companies represented in the association, which employ some 3,000 workers, are in the same boat as Majestic Shapes because, as “peripheral” manufacturers, the cost of their product is weighted toward labor rather than raw materials.

Manufacturers of underpinnings such as shoulder pads, bra cups, sleeve heads and petticoats, and factories that specialize in stitching, pleating and embroidering, produce “penny” products — so called because the makers’ per-item profit margins are in cents, rather than dollars.

The union contracts for the companies that negotiate through Pleaters, Stitchers & Embroiderers and for Majestic Shapes, which negotiates independently, expired Monday. Representatives for Majestic and the contractor association continued to negotiate separately with the union on Monday. At press time, temporary extensions were expected to be enacted prior to the midnight deadline to prevent a walkout.

They are one of the last group of companies with union contracts forged under the former ILGWU to remain at the bargaining table, according to a UNITE spokeswoman.

Last Wednesday, as the deadline loomed and the possibility of a strike became real, Lopato shut down the factory to answer questions from his employees — mostly legal immigrants from the Dominican Republic — as to why he could not meet the union’s demands.

In a scene reminiscent of “Evita,” Lopato spoke to the workers from a staircase overlooking the production floor, with a mural behind him depicting women racing toward a finish line where a pot of gold beckons them to produce.

“I don’t want to take away your co-pay for medical. I don’t want to take away your transit tickets. I don’t want to take away your holidays, but I ask the union not to increase my overhead,” Lopato, who is 73, told the crowd, addressing himself as their “father.”

While some of the employees said they believe Lopato, who told them the company lost $65,000 in the past month and often produces at a loss just to keep a customer, they are also fiercely loyal to the union.

“He said he can’t find the money. I believe him. I think this situation is not going to get any better,” said Praxides Estevez, a cutter. “I want to keep my job.”

Lopato, whose desk is strewn with motivation missives such as “Time is money. Speed is life,” estimates the first 3 percent annual increase, figured with taxes, would raise the average worker’s pay by $12.54 weekly and increase payroll for all employees by $97,810 in the first year. The average pretax weekly wage is $271.13.

Compounding the three subsequent 3 percent annual raises, Lopato expects the new contract to cost Majestic Shapes $941,204 over four years.

“The union knows what is going on and it’s only getting worse, not better,” said Lopato, adding that at least a dozen of his competitors, including Design Contours, Atlantic Pad, Crest Shoulder Pad and Fashion Shoulder Pads, all with union contracts, have closed since the last contract was negotiated.

“This unnerves me the most. What is their game plan?” he asked.

Robert Jordan, manager and secretary of Local 62-32 of UNITE, who negotiates with the peripheral manufacturers’ association, Majestic and a few other independent manufacturers, responded, “There are always very difficult problems with negotiations. But these people are humans with needs. They make very little money. Their hourly rate is less than $7. Do you think that’s a living wage?

“These are working, poor people. They have as much a right to make a living as anybody else. I don’t believe anybody making $7.25 an hour is making a decent living.”

Jordan said he is very aware of Majestic’s problems, and he acknowledged that employees there are at risk of losing the jobs if their rates are increased.

“It’s a Catch-22. How do you resolve it? I don’t have the answer,” Jordan said, adding that the union is willing to make some concessions in negotiating a contract, but he would not discuss what those concessions might be. “We’re not looking for the firm to go out of business.”

He also emphasized that the union is working to keep jobs in the city, with educational programs and campaigns to combat the proliferation of sweatshops, aimed at raising consumer awareness and holding retailers responsible for abuses in private label manufacturing.

That gives little consolation to Lopato, though, who said that in 1945, there were 243 shoulder pad manufacturers in the metropolitan area.

Today, there are about a half-dozen left in the region with ties to UNITE. Majestic and Well-Built Shoulder Pads in Hoboken, N.J., originated their contracts through the ILGWU, while New York Pad, Perfect Shoulder Co. and Ajax Shoulder Pad in the city have contracts that originated through the Amalgamated Clothing & Textile Workers Union, and are not up for renegotiation until next year.

For the 60 members of Pleaters, Stitchers & Embroiderers, negotiations also were down to the wire, with union and association representatives meeting Monday.

“If we do have a walkout, it would affect many of the garment firms that use our goods as well,” Edelman said.

As of last week, he was urging the union to grant an extension of the existing contract so the parties could work out their differences.

Officials at UNITE and the association said they would extend their discussions this week if Monday night’s deadline was missed.

Sequins International in Woodside, Queens, employs 240 UNITE members and is represented by the association in the negotiations, said Lawrence Gladstone, president, who stressed that the percentage of labor cost is higher for these companies than in most other associations. If the union does not consider that, “it could be that existing shops in the association will completely close here.”

Gladstone feels the union and association can agree on a wage hike, but a proposed 1 percent increase to health and welfare payments for the employees’ prescription drug plan could be a sticking point.

“If they raise the rates and cost to a point too high, the jobs go overseas. Once the cost gets too high, either parts or the whole of manufacturing go overseas,” Gladstone said. “So while they think they are doing a good job for the workers by raising their wages, at the end of the day they don’t have a job anymore.”