Thomas Foley, a leading contender for the Republican gubernatorial nomination at Saturday's party convention, says his 25 years of experience as a business owner and executive will enable him to "fix our economy and our broken government in Hartford."
But one of Foley's claimed success stories — his ownership of The Bibb Co., a textile manufacturer that he bought through a junk-bond-financed leveraged buyout in 1985 — ended with him relinquishing executive control and most of his 95 percent stake in Bibb 11 years later.
Bibb — whose Bibb City plant on the outskirts of Columbus, Ga., was once known as the largest cotton mill in the world — went through a "prepackaged bankruptcy reorganization" in 1996 that removed Foley from executive control. It never recovered and was sold in 1998 by its new management, and the renowned Bibb City plant closed forever in 1998.
Foley's Greenwich-based holding company, the NTC Group, collected management fees from Bibb of $4 million each year from 1992 to 1994, then $3.4 million in 1995, even as Bibb struggled and began losing money in 1994, according to filings with the U.S. Securities and Exchange Commission. He estimates he personally collected about 20 percent of those fees.
While Foley has enjoyed success in business overall, his Bibb venture contrasts starkly with the rosy-hued picture of his career painted in his campaign literature. An upbeat campaign biography released in 2009 puts his Bibb years in this context:
"Tom's record in business is impressive. His primary operating companies, The Bibb Company, T.B. Woods, Inc., and Stevens Aviation, each more than doubled in revenues and each expanded employment by more than fifty percent while under Tom's leadership," said one of his campaign biographies. "Tom believes the same expertise and problem-solving skills he uses to manage and grow businesses can be used to help government improve the economy and expand jobs for Connecticut citizens."
In an interview this week, Foley said he didn't think his campaign account was misleading.
"No, I don't at all," Foley said, "because when I bought The Bibb Co. it was losing $14 million a year, and shortly after I acquired it we got it turned around and we were earning money. And the company was doing quite well in 1988 so we bought a bigger … textile business from J.P. Stevens." That acquisition increased the number of the company's employees, he said.
But then things turned sour for the business, whose main products included towels and sheets.
"In the late '80s, valuations on businesses were pretty high — the economy was very good — and we overpaid for that part of the business," he said. "We integrated the two businesses. … I think from a management point of view things were doing pretty well. ... But we just couldn't bear the weight of the debt that had been taken on, and so that was the reason for the [bankruptcy] restructuring."
"Over the 10-year period I owned The Bibb Co., the textile business was under tremendous pressure from products coming in from overseas," Foley said. "I think we certainly did much better than the management team that was in place before I bought the business would have done. So I think you have to compare the performance [on the basis of] how long we were able to keep business and hold on under different circumstances."
Foley said the annual management fees of up to $4 million, which were collected by NTC as the Bibb Co. struggled, were for "a lot of employees ... helping to run the company" out of NTC's Greenwich office.
Foley said he is "not really a finance person by background" and instead has specialized in managing companies he buys and improving their performance.
"I think the image of a slash-and-burn person is more of a trader, somebody who comes in and buys something, and does a quick fix-it-up or face-lift and then tries to sell it for a quick profit or sell of the parts and make money — and that's done quickly," Foley said. "I was an investor. I came into these companies, and I tried to make them perform better. I was involved with developing plans to ... meet the challenges they were facing."
"But in business ... it's by definition risky," Foley said. "And despite your problem-solving skills, the plans you put in place, factors out of your control make it so that you aren't able to attain your objective. ... We had a very good run for the first few years, but ultimately the global economic pressures made that business, no matter how good a manager or leader you are, unable to survive in the United States."
Foley, a multimillionaire who lives in Greenwich, says he is willing to pour millions of his own funds into his campaign. He has been active in national Republican politics and was sent by President George W. Bush to Iraq in 2003 as private sector development director, overseeing Iraqi state-owned businesses and trying to promote private-sector growth. Later, he was Bush's ambassador to Ireland.
Of the other two businesses mentioned in Foley's 2009 campaign biography — T.B. Woods and Stevens Aviation — he no longer owns T.B. Woods but still owns Stevens Aviation.
The 2009 biographical material was released when he was exploring a run for the U.S. Senate, before he switched last December to his current gubernatorial candidacy when Gov. M. Jodi Rell announced she would not seek re-election.
His current campaign website does not mention Bibb and is more general: "Tom started from scratch and made his own way in business. He started the NTC Group in 1985 to acquire under-performing businesses and turn them around. Within ten years, NTC Group grew to employ over 6,000 people. Tom knows what it takes to meet a payroll and keep a business going. Tom believes the same expertise and problem-solving skills he used to fix problems in his businesses can be used to fix our economy and our broken government in Hartford."
Foley's campaign blurb was of interest to people in Columbus, Ga., where hundreds lost their jobs with the decline and closing of the local Bibb City mill, which previously had been part of his holdings.
Speaking of the time Foley owned the Bibb City plant, John Lupold, a retired professor of history at Columbus State University, said Bibb was "contracting rather than expanding."
He said that was not unique; scores of regional textile mills were dying because of overseas competition.
"It was pretty universal," Lupold said. "But I don't know how you can say anything was doubling in employment."
On Columbus State University's website is a history of the plant, which was in what once was a separately incorporated district called Bibb City, a company town where the paternalistic management provided cheap housing for mill workers.
The final three entries in a 106-year historical timeline for the Bibb plant are: "1980s, brought change when Thomas Foley purchased The Bibb Company; 1998, Bibb Manufacturing closed its doors. ...; 2008, over 100 years of history was lost when Bibb Manufacturing went up in flames and burned to the ground leaving only the front facade."
Joyce P. Kendrick, 75, who lives across the Chattahoochee River in Phenix City, Ala., worked at the plant for 34 years. Among her jobs were "spinner" and "roller-picker."
"I know I was thankful to have a job when I was there," she said in a phone interview. "It hadn't closed at the time I went out [and retired in the 1990s] ... but it was in the last days. ... I wanted to retire, and I wanted to do it there. I could see it coming for a few years before that, because things were cutting back. It was just going down to nothing and we could see it."
"Yes, it was sad," Kendrick said. She did not lose her retirement but she and others are worried about reports that the funeral and burial insurance they'd bought, with $2,000 or $3,000 coverage, won't be available. There is talk of a court proceeding, but Kendrick and others are unfamiliar with details.
Kendrick said she liked working there. "My pension is $138," she said. "But I'm thankful for that. I'm very thankful. I've always been a workaholic. We got where we were dissatisfied with some of the decisions that were being made. But there was nothing we could do."
Other Republican gubernatorial contenders besides Foley are Lt. Gov. Michael Fedele of Stamford, R. Nelson "Oz" Griebel of Simsbury and Lawrence DiNardis of Hamden.
Source: http://www.courant.com/news/politics/hc-tom-foley-firm-failure-0520,0,714239.story
