NEW YORK — Malden Mills Industries faces a possible strike by its unionized workers, who were to vote Thursday night on a three-year contract.
The proposed contract includes a total 7 percent pay boost, but also calls for a rise in workers’ health insurance contributions, a Malden spokesman said.
The increase in health insurance costs has been a sticking point in the negotiations and has prompted the workers to reject previous proposals. Their previous contract expired Nov. 30, but operations have continued under an extension.
Voting was expected to extend past 8:30 p.m., with about 450 UNITE HERE members casting ballots at the end of their shifts, a spokesman for the Lawrence, Mass.-based company said.
Warren Pepicelli, manager of the New England joint board of UNITE HERE and a union vice president, said, “This is a vote to accept the contract or to go on strike.” However, he said it’s possible that the workers might not strike immediately if they vote down the contract.
Staffing at Malden’s plants varies with each season and can reach about 700 workers, the Malden spokesman said.
Asked how a strike would affect the company’s operations, the Malden spokesman said, “We’ll be prepared to talk about that tomorrow. Hopefully, we won’t have to.”
The potential walkout marks a low point in relations between the mills and its workers. Saturday will mark the ninth anniversary of a fire that destroyed most of its manufacturing facilities. Then-chairman and chief executive officer Aaron Feuerstein won the loyalty of many workers — and plenty of positive publicity — by continuing to pay his 2,400 workers through the holiday season and rebuilding the plant in Lawrence rather than moving it to where wages were lower.
While that deed made Feuerstein widely admired, it also set the stage for serious financial trouble. The company racked up a heavy debt load during the rebuilding process, and in the late Nineties, faced an enormous competitive surge as scores of Asian mills began turning out polyester fleece that undercut Malden’s Polartec brand on price.
By November 2001, Malden could no longer handle its debts and sought bankruptcy court protection. Feuerstein made efforts during the court proceedings to buy back the company his grandfather founded in 1906, but failed to retain control.
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When the mill exited bankruptcy in October 2003, its creditors stripped Feuerstein of executive power, allowing him to hold the honorary titles of chairman and president. A few months later, Feuerstein retired, and in July, the company appointed Michael Spillane, a former Tommy Hilfiger executive, as president and ceo.