KANNAPOLIS, N.C. (AP) – Pillowtex, the maker of towels, rugs and bedding, said Wednesday it plans to shutter its 16 plants and eliminate 6,450 jobs amid a slump that has decimated the textiles industry.

Pillowtex emerged from bankruptcy in May 2002, but continued to face financial troubles and said it did not have the cash to continue operations. The company said it would seek protection under Chapter 11 of the bankruptcy code, then wind down its business and dispose of assets.

“Facing these very difficult circumstances, closing our facilities and preparing for bankruptcy has emerged as our only viable course of action,” said Michael Gannaway, chairman and chief executive.

The U.S. textile industry is suffering from its worst economic crisis in decades due to soft consumer demand and intense foreign competition. The downturn has swallowed tens of thousands of jobs and forced hundreds of plant closings in recent years, hitting the Deep South especially hard.

Kannapolis-based Pillowtex had employed about 7,650 people in the United States and Canada and made home products under the Cannon, Fieldcrest and Royal Velvet brands.

The remaining 1,200 employees will be retained initially to assist with bankruptcy proceedings and employee communications, the company said.

The plants being closed include textile manufacturing and distribution facilities.

Ruth Crisco, a 10-year Pillowtex employee said workers have lost everything, “their livelihood, their homes, their cars. Bank of America’s getting everything back.”

Charlotte-based Bank of America is Pillowtex’s largest creditor.

A British fabric company, Broome & Wellington, has said it made an offer of $350 million to $400 million to purchase Pillowtex. The status of that offer was not immediately clear Wednesday.

Pillowtex was formerly known as Fieldcrest Cannon.

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On the Net:

Pillowtex: http://www.pillowtex.com

AP-ES-07-30-03 1506EDT