New Textile Behemoth: Ross Forms $900M ITG, Poised to Take On China

Wilbur L. Ross’ second conglomerate was born Wednesday with the merger of Burlington Industries and Cone Mills into International Textile Group.

He said trade politics would influence what, if any, moves the company makes to expand operations overseas.

“Exactly what our map would look like would depend in some degree on what happens in China next week and what happens in Congress with CAFTA,” he said.

Clearly the scale of his textile holdings will further amplify his influence on trade, which was already substantial in Washington given the fact that he also holds a significant interest in another major American industrial sector — steel. Discussing ITG, Ross said the new company will have $900 million in total revenue, a figure that he hopes will soon hit the $1 billion mark. More critically, he said, the company’s combined debt stands at $75 million, compared with the total of $1.1 billion the companies held when they filed their bankruptcy petitions. Burlington filed in November 2001 and Cone filed this past September.

“We now have the financial resources in place necessary to grow the company,” he said. “We also believe we have the management resources in place.”

Ross, who serves as chairman of investment group W.L. Ross & Co. — which acquired Burlington and Cone — also holds the post of chairman of the new company, ITG. He named Joseph Gorga, whom Ross had named Burlington’s president and chief executive officer in October 2003, to the same post at ITG.

When he acquired Burlington, Ross ousted most of the company’s top management with the exception of Gorga. The top Cone officials were more fortunate. He named Cone chairman and ceo John Bakane ceo of the Cone Denim division of ITG, and appointed Gary Smith, who had been Cone’s executive vice president and chief financial officer, cfo of the combined companies. Both executives report to Gorga.

Ross also had relatively good news for Cone’s 2,300 staffers.

“This is not going to be about laying off half the people or anything of that sort,” he said. “Any employee dislocation from the consolidation will be relatively minor.”

ITG as a whole now employs about 7,300 people, but both companies had cut their workforces substantially in the year prior to their acquisitions. The two companies now maintain separate headquarters in Greensboro, which Ross said he plans to combine. He noted that there could be minor reductions as the companies are integrated.
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