Milliken & Co. History

Address:

920 Milliken Road
Spartanburg, South Carolina 29308
U.S.A.

Telephone: (864) 503-2020
Fax: 864) 503-2100

Website: www.milliken.com

Private Company
Incorporated: 1890 as Deering-Milliken & Co.
Employees: 15,000
Sales: $2.00 billion (est. 1995)
SICs: 2211 Broadwoven Fabric Mills-Cotton; 2221 Broadwoven Fabric Mills-Manmade; 2281 Yarn Spinning Mills

Company History:

Milliken & Co. is one of the largest privately owned companies of any kind in the United States, although the precise rank of this closely held firm is difficult to ascertain; Milliken has never released sales statistics. For decades Milliken & Co. has been the clear industry leader in technology and research and, to many observers, in quality and services as well. Chairman Roger Milliken, grandson of company founder Seth Milliken, has been recognized as a giant of the textile industry since his ascension to the company's chairmanship in 1947. The two characteristics that have defined Roger Milliken's reign are his commitment to research and technological innovation and his commitment to secrecy regarding company matters. The former is best illustrated by the patents held by Milliken & Co. on inventions ranging from computerized dyeing equipment to color-enhancing chemicals; the latter is reflected by the fact that most of the company's shareholders, largely Milliken family members and friends, do not have access to financial information.

Milliken & Co. controls about 30 percent of the U.S. stretch-fabric market, about 40 percent of the market for acetate and acetate blends used in linings for coats and outerwear, and around 25 percent of the market for automotive fabrics. By the mid-1990s the diversified company manufactured carpeting and rugs, chemicals, automotive, industrial, and apparel fabrics. In 1995, Milliken boasted more than 55 plants in ten countries worldwide.

19th Century Origins

Milliken & Co. first appeared as Deering-Milliken & Co., a general store and selling agent for textile mills, in 1865. Deering-Milliken was a Portland, Maine-based partnership formed by Seth Milliken and William Deering. The company moved its base of operations from Maine to New York a few years later. Soon after that, Deering left the company for Chicago, where he formed the Deering Harvesting Machinery Company (now Navistar). Seth Milliken continued to operate under the Deering-Milliken name as a selling agent for woolen mills in New England. In the 1860s, he was selling for 16 different mills. Deering-Milliken made its first southern contact in 1884, when it began its long-standing and successful connection with Pacolet Manufacturing Company, headed by Captain John Montgomery of Spartanburg, South Carolina.

From his vantage point as part owner, sales agent, and factor (purchasing and procurement aide) for textile mills in both New England and the South, Milliken was able to determine when a mill was struggling financially, and much of Deering-Milliken's early growth sprang from the acquisition of these concerns. In 1890 Deering-Milliken & Co. was incorporated. Under Seth Milliken, the company eventually acquired interests in at least 42 mills, helping develop the textile industry in the southern United States by financing local manufacturing firms. Seth Milliken died in 1920 and was succeeded by his son Gerrish Milliken, who had joined the company in 1916. During Gerrish Milliken's tenure as head of Deering-Milliken, the company's primary role was that of sales agent and factor for southern mills.

The company's lasting tendencies toward free-flowing cash investment and technological farsightedness were already evident during the Gerrish Milliken era. For example, by keeping debt low and capital liquid during the Great Depression, Deering-Milliken was able to acquire controlling interest in several mills that faced bankruptcy while heavily indebted to Deering-Milliken. In addition, Gerrish Milliken recognized early on the potential importance of man-made fibers. He acquired the gigantic Judson mill in Greenville, South Carolina, and tested rayon, a new fiber, there.

WWII Spurs Research and Development

The onset of World War II created great demand for new, more durable textiles. Deering-Milliken was among a handful of companies that led the industry in the development of synthetics for military use. Mills that sold their goods through Deering-Milliken were commissioned by the War Production Board to produce a variety of fabrics and yarns to meet government specifications. In 1944 Deering-Milliken was designated to build a mill that would process a new man-made fiber for military tire cord. The DeFore mill, built on the Seneca River near Clemson, South Carolina, was the first windowless textile mill equipped with complete air-clearing and -cooling systems; it set the plant standard for years to come. Throughout the war years, demand also continued to grow for the company's New England-produced worsteds and woolens, and more southern mills were purchased.

Gerrish Milliken died in 1947, and his son Roger Milliken took charge of the company. Gerrish Milliken Jr. and Minot Milliken, two other grandsons of Seth Milliken, were also given official positions in the company. Roger Milliken began to shift the company's emphasis away from commission selling toward its own manufacturing. Eight new mills were built between 1940 and 1953. The first mill Roger Milliken built was the Gerrish Milliken Mill, in Pendleton, South Carolina. In addition to weaving Orlon and nylon, this plant, along with two others, doubled as a cattle farm.

By the mid-1950s, Deering-Milliken & Co. was the third largest textile chain in the United States. About 19,000 workers were employed by the company, ranging geographically from New England through the South.

In 1956 the company became entangled in one of the ugliest and most drawn-out affairs in the history of labor relations, a case that continues to be studied by experts in labor law. On September 6, 1956, workers in Darlington, South Carolina, ignoring Roger Milliken's threats of a plant shutdown, voted to bring in the Textile Workers Union of America to represent them. The textile industry historically had been hostile to organized labor--15 percent to 20 percent of the industry had union representation by the mid-1970s--and Roger Milliken had been among the most vocal of union opponents. Milliken made good his threat, and the Darlington plant was closed. In 1962 the National Labor Relations Board ruled that the closing constituted an unfair labor practice, but this decision was reversed by a federal appeals court. The case was ultimately decided by the Supreme Court, which ruled that a plant could not be closed to discourage union activity at other company locations. It was not until 1980, after 24 years of litigation and negotiation over a formula for calculating back pay, that the case was finally settled. The company agreed to pay a total of $5 million to the 427 workers still alive and the survivors of the 16 workers who had died since 1956.

Originally, the mills controlled by Deering-Milliken were separate corporations, some of which had outside shareholders. By the end of the 1950s, Roger Milliken had succeeded in buying out all of them, integrating them into a single corporate entity. The year 1958 marked the opening of Deering-Milliken's gigantic research facility in Spartanburg, located on a 600-acre complex that became the company's headquarters. From this facility, the most sophisticated in the textile industry, flowed a steady stream of new fabrics and processing techniques. It was here that "durable press" and "soil release," important advancements in polyester treatment, were developed through irradiation.

New Products, Policies Highlight 1960s and 1970s

Under Roger Milliken's leadership, Deering-Milliken continued in its role as industry groundbreaker into the 1960s. In the early 1960s Milliken began to question the conventional thinking of most textile executives regarding inventories. Traditionally, manufacturing and marketing were treated as separate functions, often resulting in excessive inventories. Milliken commissioned a study that indicated an inverse relationship between inventory size and profits. This led Milliken to keep tighter control of inventory by adjusting the rate of production. Deering-Milliken began its European operations in 1965, opening mills and offices in England, France, and Belgium.

In 1967 Deering-Milliken eliminated 600 mid-level management jobs in a consolidation to cut overhead. Deering-Milliken was among the trail-blazing companies in the 1960s, however, in producing double-knit fabrics. Toward the end of the decade, the company unveiled one of its most important inventions, Visa. Visa is a fabric finish that resists stains and is used on a wide variety of products, including clothing and tablecloths. The original irradiation process for making Visa has been replaced by a chemical process. The development of Visa strongly reaffirmed the company's position as a leader in developing patented fabric finishes. It also produced huge profits.

For decades, Roger Milliken has been an active force in conservative politics. Milliken demonstrated the depth of his right-wing convictions in 1967, when, after viewing a television documentary on UNICEF aid to communist-governed countries sponsored by Xerox, he quickly had all Xerox copiers removed from company offices. Company executives routinely receive subscriptions to conservative publications. By the late 1980s, however, the company began using Xerox machinery again, and Xerox was its major copier supplier in 1991.

In 1978 the name Deering was finally removed from the company, more than a century after company founder Deering's departure. The year also marked the 25th anniversary of a Milliken & Co. tradition known as the breakfast show. Each year, retail store buyers and other industry professionals are invited to a Broadway-style musical revue featuring big-name performers and staged at a major New York venue. The breakfast show has a run of 13 performances, nine actually at breakfast and four at cocktail hour, and is seen by more than 30,000 people annually. The show was essentially a glamorous advertisement for Milliken products and has featured Phyllis Diller, Cyd Charisse, Ray Bolger, and Bert Parks, among others.

1980s Bring Rising Tide of Imports

The first half of the 1980s was difficult for the textile industry. One reason was the doubling of textile imports between 1980 and 1985. During that period, Milliken & Co. closed seven plants, reducing its total to 55 in North Carolina, South Carolina, and Georgia, and a quarter of its work force was laid off. These circumstances led Roger Milliken to depart from his general policy of avoiding the press. He began speaking out in favor of protectionist policies, recommending limiting the growth rate of imports to the growth rate of the U.S. market. By 1991 58 percent of the fabric and apparel sold at retail in the United States was imported. Milliken & Co. was also hurt during this period by Milliken's refusal to adjust to the trend among U.S. consumers toward wearing natural fibers. He believed that because synthetics required less labor, a shift in emphasis was not practical.

In 1984 Roger Milliken survived a helicopter crash. Some who knew him believe that this event brought about a new willingness to deal with the public. He began assuming leadership roles in a number of industry organizations, most notably the Crafted with Pride in U.S.A. Council. Milliken's increased public involvement resulted in his being named Textile Leader of the Year in 1986, the first such honor awarded by Textile World, an industrial magazine.

Despite Milliken's objections to textile imports, between 1985 and 1989 Milliken & Co. purchased 1,500 modern Japanese looms, and in 1989 the company bought 500 more from Belgium, because U.S. weaving machinery manufacturers no longer existed. These looms are able to detect defects, stop themselves, and then start up again on their own. In 1987, the company fought fire with fire, establishing a subsidiary in Japan. This operation imported commercial (mostly modular) carpet until 1991, when Milliken brought its first Japanese manufacturing plant on line.

During the late 1980s Milliken & Co. began to show signs of moving toward diversification. The company opened a second chemical plant in 1988 in Blacksburg, South Carolina. The plant makes Millad, a clarifying agent for polypropylene products. The company's first chemical plant had been opened in Inman, South Carolina, in 1963. It made chemical products used in the textile manufacturing process, as well as chemical additives for paint, crayons, markers, plastics, and other products.

TQM Brings Awards, Accolades in Late 1980s and Early 1990s

Roger Milliken named 17-year company veteran Dr. Thomas Malone president in 1984. In response to the competitive challenges of the 1980s, the duo borrowed ideas from several management philosophies to create what soon came to be known as the "Milliken Quality Process." In the early 1980s, for example, they embraced the principles of Total Quality Management (TQM) espoused by Philip Crosby. Known as Pursuit of Excellence (POE), this program flattened the organization via the creation of relatively autonomous teams of "associates," not employees. By 1984, the company had increased its quality and simultaneously reduced its costs.

Having implemented this internal strategy, the company turned outward in a quest for customer satisfaction in the late 1980s. For this stage of Milliken's transformation, the company looked to management guru Tom Peters. In fact, the textile manufacturer implemented his theories so successfully that Peters dedicated his book, Thriving on Chaos, to Roger Milliken. The company "cherry-picked" dozens of other modern management concepts to create its own strategy. In 1989, the U.S. Department of Commerce recognized Milliken's achievements by awarding it the Malcolm Baldrige National Quality Award. (Ironically, that year's other winner was Xerox, the company that Roger Milliken had shunned more than 20 years earlier because of his rigid political beliefs.)

Instead of resting on its laurels, Milliken established a new set of quality, customer satisfaction, and innovation goals. Its ongoing quest has earned it an astounding array of awards, including the European Quality award (1993), Textile World's "Best of the Best" (1993), and the Warren Featherbone Foundation Award for American Manufacturing Excellence (1996), to name just a few. The company even succeeded in turning a crisis, a devastating fire that destroyed the La Grange, Georgia plant in January 1995, into yet another citation. Milliken not only rebuilt the mill in less than six months, it also managed to keep most of the factory's 700 associates employed during the interim by transferring them to the company's British plant. These heroic efforts earned the 1995 Model Mill award.

There is but one visible chink in the Milliken & Co. armor. A struggle over future control of the company developed during the late 1980s as Roger Milliken entered his mid-70s. The family of Joan Milliken Stroud, Roger Milliken's late sister, owns about 15 percent of the company and has indicated that it resents its lack of input on company decisions. The Stroud family had sued Milliken and his board of directors at least three times by 1989 in attempts to win shareholders' information and input. When the Strouds threatened to sell their stock, Milliken countered by making new rules that require approval by 75 percent of the voting power before the company can be sold and hand-picking a new, self-perpetuating board dominated by outside directors and managers. Roger Milliken, Gerrish Milliken Jr., and Minot Milliken control about 50 percent of the company common stock. It has been suggested that they have stymied the Stroud family's attempts to sell their stock because it is their wish to keep the company private. Nevertheless, in December 1990 the Daily News Record reported that the Stroud family had sold "a small amount of Milliken stock" to Erwin Maddrey and Bettis Rainsford, executives of Delta Woodside Industries Inc. The two investors hinted at the possibility of purchasing the remainder of the Stroud faction's stock.

Among textile industry insiders Milliken & Co. has for generations been associated with quality products and services--quality usually achieved through foresight and innovation. Roger Milliken has been, arguably, among the most important individuals in the textile industry during the 20th century. The success of Milliken & Co. in the future will depend largely on the company's ability to continue with its steady technological and organizational advancement in the absence of the management leadership the Millikens have provided for so long. This will be the case whether the company becomes publicly owned or remains firmly in Milliken family hands.

Milliken & Co. History

Company History:

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