Murdock’s Reign Changes Life at Southern Mill Town : <i> Some Miss the Paternalism of Mr. Charlie </i>

A family named Cannon carved this Piedmont town out of a forest of loblolly pine and hickory, built a textile mill and for 76 years ran the two like a private fiefdom. Folks here concede it wasn’t the most democratic arrangement, but for some the memories of the old days seem sweeter all the time.

“The Cannons didn’t just own Cannon Mills--they owned the town and gave the orders,” said Helen Elwood, a mill worker of 40 years, as she rocked through a steamy afternoon on her front-porch swing. “But we got paid, the town seemed to run, and nobody lay awake worrying what would happen next.”

The old days ended abruptly in 1982, when Los Angeles financier David H. Murdock bought the textile firm and 660 choice acres in the town, which lies 26 miles northeast of Charlotte.

He reorganized the mill, pared its work force, began selling the 1,785 white clapboard mill worker homes, and mounted a $20-million effort to redevelop the downtown that is still entirely company-owned.

Nothing Is Settled

Three years later, everything has changed and nothing is settled.

Cannon Mills is mired in an industrywide recession, and steady layoffs at the 11,000-employee mill have pushed Cabarrus County’s unemployment rate to 18%, highest in the state. Murdock disclosed this month that he has approached other mill owners, so far without success, about a merger that would help bolster the money-losing company.

Staff cuts and workload increases at the mill have stirred resentment and sparked a bitter union-organizing drive that will climax in several weeks with a representation vote.

The town has incorporated, elected its first mayor and council, and is preparing to begin city services that were long offered by Cannon Mills. But while townspeople dream of sharing in central North Carolina’s prosperity, the success of Murdock’s redevelopment plans are still unclear.

And some residents fear major layoffs that would deal crippling injury to the local economy. “The fact is, things were unsettled when the mill was sold, and they haven’t really been settled since,” said Boyce Jenkins, who recently retired as president of the Cabarrus Bank. “I’m not sure exactly what it would take to bring stability.”

Cannon family ownership lent stability that was as much the town’s hallmark as the cotton cloth that streamed endlessly from Cannon looms. Kannapolis’ peculiar anachronistic organization made it a curiosity to its neighbors and a delight to scholars. “The Southern textile industry has always been shot through with paternalism, but Kannapolis offered the biggest, most visible, and maybe the most extreme example,” said Thomas E. Terrill, a labor historian at the University of South Carolina. “They’re a symbol of a past that has been dead other places for a long, long time.”

James William Cannon, the company founder, began buying property for the town in 1906, and named it Kannapolis, which he mistakenly believed to be Greek for “city of looms.” (A better translation would have made the city “Histopolis,” classics scholars say.)

He built and leased four square blocks of retail stores on a flank of the redbrick mill, and, to shelter the mill workers, ringed the surrounding area with one-story bungalows of three and four rooms. Since the mill’s early days, the houses were scrupulously maintained and offered at rents that three years ago averaged $30 to $40 a month.

Tenants include not only mill workers but some local teachers, policemen, and, until nine months ago, the Kannapolis school superintendent.

Cannon Mills has provided water, firefighting and police services for the town, garbage pickup and electricity. Over the years, the Cannons and their charitable Cannon Foundation disbursed millions to build and maintain schools, hospitals, water and recreational facilities.

Family Was Generous

Townspeople recall the Cannons’ generosity to those who needed cash for a medical emergency, schooling or other purposes. Charles A. Cannon, the son of the founder and for 50 years the mill-town patriarch, “would send people to me with a handwritten note suggesting we help out with an unsecured loan,” former banker Jenkins said. “The note was enough.”

Charles A. Cannon, known here as Mr. Charlie, was a round, ruddy-faced man with an arthritic limp who wandered the cavernous mill in a work shirt, backslapping and jawing with workers. In the 1940s, at Kannapolis’ peak of prosperity, the mill employed more than 25,000, and Kannapolis was said to be the largest unincorporated town in the United States.

Mr. Charlie’s generosity did not include a desire to share power. He opposed incorporation, because it would mean a loss of company control--and perhaps higher taxes. He was against efforts to attract new businesses and opposed an initiative to start a local technical school, fearing both would threaten the availability of labor.

“I think people hesitated to step forward and even talk about incorporating, because they knew Mr. Cannon was against it,” said Bachman S. Brown, the local attorney who this spring became Kannapolis’ first mayor.

Heirs Sold Mill

Mr. Charlie died in 1971, and 11 years later the family heirs and other shareholders sold out for a handsome $413 million.

Some residents were unsettled by the new owner’s reputation as man who preferred to manipulate his investments from a distance. Today, debate continues about how long he plans to hold on to the Cannon properties, which include textile plants in three states and 8,000 acres of real estate.

The talk has intensified as the mill’s fortunes have declined, and as Murdock has announced plans to the develop Hawaiian real estate held by Castle & Cooke, the ailing fruit company that he recently acquired.

Clearly, townspeople have found the man who replaced Cannon as Kannapolis’ most important person to be nothing like him.

Murdock, as carefully dressed as Mr. Charlie was casual, doesn’t often socialize with townspeople. Residents occasionally glimpse his slight, business-suited figure striding purposefully to inspect his properties.

They know that he razed Mr. Charlie’s austere colonial home, For Pity’s Sake, and replaced it with a sprawling $1.5-million home and conference center designed to look something like a Swiss chalet.

Many Are Impressed

Murdock does appear for town ground-breakings and ribbon-cuttings, often speaking on such inspirational topics as the glories of struggle against adversity. Many are impressed, apparently including some who are paid to be dispassionate observers.

“When I hear Murdock, I just get all fired up,” enthuses Everett L. Gilliam, reporter for the Kannapolis Daily Independent. “The man can speak.”

Says Harold Holbrook, owner of a local TV repair store and a town councilman: “Folks here like a man with a positive attitude. It seems like you can’t get anything done if you’re negative.”

The mill owner has also donated land, cash, and company labor to the town in a style that seems much like the Cannons’. As he reminded workers recently in his anti-union campaign, Murdock has donated land, labor and cash to help the community build a senior citizen’s center, YMCA, park and library.

Some, like Holbrook, believe that Murdock has offered the best hope for the mill and Kannapolis’ commercial district, which was likewise facing a slow decline.

The downtown revitalization program is ambitious. Murdock’s idea was to remodel four fading blocks in the town’s center in a style reminiscent of colonial Williamsburg and lease them to factory-outlet stores in hopes of drawing tourists from nearby Interstate 85. Murdoch hoped to model the new retail center on shopping areas in such places as Reading, Pa., and Myrtle Beach, S.C., where apparel and other manufacturers operate their own discount stores.

Building Restored

Buildings were sandblasted, plate-glass was replaced with Georgian-style paned glass, and wooden trim was painted creamy tones. The redesigned Cannon Village opened for business last fall, and today there are about 20 stores anchored by a large Cannon outlet.

“It’s really taken off,” says Jeff Carpenter, president of Cannon Realty & Development Co. Boosters note that state tax records show retail sales in the town were up about 10% in the first five months of the year, compared to the same period of 1984.

But some merchants say the development has some way to go. Bob Tucker, owner of the 160-store Shoe Show chain in nearby Concord, says his company’s location around the corner from Cannon Village has performed “OK, but it’s far from tops.”

He is skeptical that the factory-outlet center will draw many tourists from the interstate, and observes that the merchants’ costs have risen, too. The realty company says monthly commercial rents have been raised from an average of $1 to $2 per square foot in 1982 to a current $6 to $12 per square foot, which the company says is about the market rate.

The redevelopment has left a residue of bitterness among many of the roughly 60 merchants who were forced to move to make room for the theme mall. They complain of high-handed treatment.

Three brothers who owned 40-year-old Query Bros. clothing store, a block from the outlet mall, decided to retire rather than move to a new, higher-rent shopping center Murdock designed for some of the displaced merchants.

Faults the Developer

Fred Query faults the developer for tripling the rent and for refusing to give leases during the last three years, while he considered what to do the commercial district adjacent to the factory-outlet center. The brothers got an offer to sell their haberdashery early this year, but it fell through for the lack of such a lease, he said.

The displacement of the merchants “was badly mishandled,” Query said. “Mr. Murdock says you can’t stand in the way of progress, but does progress mean you have to bulldoze everybody at once?”

Change has also brought disruption for many of the thousands who have lived in mill-owned houses.

The company continues to rent about 800 of the 1,785 buildings to company retirees, and has sold about 900, or most of the remainder, to former occupants and others for prices averaging about $20,000.

Some who were happy to buy homes have regretted the decision since they were laid off.

Mill worker Annie Garlin, 49, rented a three-room house for a monthly $24 rent, and thought she was getting a pretty good deal when she bought the house for $11,000. That worked out to a $159-a-month payment, which she could afford on her $3.35-an-hour wage until she was laid off last December.

“I love this house, but I may have to give it back,” says Garlin, who also provides most of the support for two daughters and three grandchildren.

Sudden Layoffs

Garlin frets that she may never get her mill job back, and in that fear she’s not alone. Referring to recent practice of announcing layoffs in the morning, a joke now circulating in weave-rooms describes an optimist at Cannon Mills as a worker who packs a lunch.

Murdock and senior Cannon Mills officials declined to be interviewed for this article and have disclosed little about the precise financial situation of the privately held company.

Murdock has said he is losing money this year on the mill, which is the world’s largest towel manufacturer, and last year generated revenues that have been estimated at $700 million. The owner has also said that he has put $12 million of his own money into the company’s operations so far in 1985.

The company also won’t discuss layoffs, but former plant officials speculate 3,000 positions may have been eliminated since 1982, and that the plant has recently been operating at about half capacity.

Among those who have left are many older employees--a few as old as 80--who had been accommodated during the Cannon ownership but who retired when workloads were increased.

Hundreds of former managers have been swept out, including dozens on a so-called “Black Friday,” when some were told to leave the plant grounds within a half hour.

Mill officials have said that under former management the Cannon Mills plant suffered from a variety of shortcomings. Its marketing and product-design were weak, it had few financial controls and little in the way of a management information system to keep a check on costs, they contend.

Plant Was Over-Staffed

Management has said that jobs were not assigned efficiently, and the plant was over-staffed, partly because of the Cannons’ paternalistic interest in maintaining jobs during slack periods.

Teams of industrial engineers have been brought in to evaluate plant efficiency, and jobs and salaries have been revised. Some wages have been cut, and workers and union organizers complain that demands for increased output have effectively cut others by as much as 30%.

“We could have put up with some increased workload, but not like they’ve done,” said Deborah Miller, a mill worker who said she was assigned to tend 12 looms, up from 6 under the old management. Paid by her output, she said the increase in duties effectively cut her pay about 10%.

In a series of interviews, several middle managers who were recently laid off disagreed on whether the workload increases had been excessive. Several concurred with management’s views, but one asserted that some workloads are excessive, and in a few cases represent increases of 50%.

The vote on union representation, expected within weeks, will be the biggest for the Amalgamated Clothing & Textile Workers Union since it lost a 1974 vote at Cannon Mills by a margin of 55% to 44%.

In this go-around, Cannon Mills has hired an Atlanta law firm that specializes in anti-union campaigns. It has tried to drum home in videotaped messages that a union’s demands would only weaken the company’s competitive position in the face of swelling imports from low-wage overseas producers.

Opposes Union

Murdock has denounced “slurs” against him in union literature, and wrote in a letter recently distributed to workers that the union “has nothing worthwhile to offer you.”

But if the union faces tough odds, nobody discounts its chances entirely. Some assert the union’s chances are improved by changes in the makeup of the mill’s work force, which now includes more young and minority workers who do not remember the Cannon family era nor share in the old loyalties.

Many in the town believe a vote for unionization would make Murdock yet more eager to sell off the mill, and are braced to adjust to a new owner. Some townspeople, noting that real estate may be the most important part of Murdock’s business empire, believe that he plans to at least hold onto those properties.

“This town has evolved in a peculiar sort of way,” said Holbrook, the city councilman. “But I don’t suppose we’ve seen all the strange twists yet.”