This story is from December 30, 2005

GHCL buys American firm

Chidanand Rajghatta / TNN / Dec 30, 2005, 00:11 IST

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A small town in America is bracing itself for loss of jobs to India. No big news here, except, this is a flight of manufacturing jobs.

WASHINGTON: A small town in America is bracing itself for loss of jobs to India. No big news here, except, this is a flight of manufacturing jobs.
Residents of Danville (population 48,000) located in Southern Virginia, seem reconciled to losing up to a 1,000 jobs after the Indian firm Gujarat Heavy Chemicals Ltd (GHCL) bought the storied local company Dan River recently.
Founded in 1883, Dan River employed almost 2,000 people till recently and is central to the region's economy. At one time it was the leading manufacturer of light-weight yarn-dyed woven fabrics in the western hemisphere.
Even today it supplies major stories in the US products such as bed-in-a-bag and other home products such as comforters, sheets, pillow cases and draperies.

But the firm has been in terminal decline over the past few years and has closed several facilities in the city. It filed for bankruptcy protection in 2004 and emerged from bankruptcy only in February this year.
GHCL will purchase 90 per cent of Dan River's stock, valued at $17.5 million. GHCL will also assume $80 million of Dan River's debt. Dan River's acquisition is expected to give GHCL direct access to established American retailers such as as Wal-Mart, JC Penney and Bed, Bath & Beyond.

Dan River employees and local leaders are on tenterhook about the fallout of the acquisition. "I will be anxious to see what impact this will have on the community as a whole," Danville mayor John Hamlin told a local newspaper.
According to Calvin Barnhardt, Dan River's V-P (human relations), Dan River employs 1,700 people, about 1,000 of whom work in the Danville facility, with an unknown number commuting other parts of North Carolina.
Of those, 730 work in the manufacturing jobs that may be at greatest risk of moving overseas. Some locals appeared stoic about the events, pointing out that more than 50% of Dan River's manufacturing was already being outsourced to India, Pakistan and China in any case and there wasn't much manufacturing remaining in the US in any case.

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