'A cash flow crisis continued to dog us in spite of this limited source of quick money'

'A cash flow crisis continued to dog us in spite of this limited source of quick money'

Billy Gallagher recalls the decline of the family business and remembers the effort Billy and his father put into keeping the business going despite cash flow crises.

Billy Gallagher

Trinity College Dublin

1970

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Billy Gallagher

Work and employment

Life Story

Donegal, Lifford

1970's

My father and I met in Strabane every Sunday night, we were now looking for someone to take half our production for his own use (100 dozen a week on CMT) and allow us sell the other half (100 dozen). This would give us cash flow, sufficient to stay open as the new 'partner' would pay in 7 days as this is the trade rule for CMT.CMT means Cut, Make and Trim. It is the traditional system in the clothing business where people without own production facilities farmed out work to people who had production facilities only but depended on others to provide fabric/design etc. Normally these places were sweat shops, no facilities, no regulations, no contracts of employment and miminum remuneration, often in back streets/sheds etc with minimum possible overheads (bar the owner/manager's wages). Leonard McGuckan's factory fitted the bill exactly.In Spring of 1966 I found Max Johnstone who had just gone bankrupt in a shirt factory in Athy. He had found an American niche and also had a backer, (Lawtex) a mass production Jewish outfit (jeans and umbrellas) in Manchester. They were anxious to get back into production quickly, Max had American orders and fabric bought but no possibility of making it. There was urgency to get together quickly to fulfil orders on time or lose the whole business. That Max Johnstone was completely mad was not known at this time by us.Without the knowledge of my father I came to an agreement with these people, that we would split our factory in two, they would take half and staff and streamline it, put in their own management and work study team and we would continue our way in the other half. They would pay us weekly for their production and show us how to make and source production for the American market.We discovered to our surprise that we made a remarkably high quality garment, that the factory standard was as good as you could get anywhere in the world. This is what we were selling to Guineys and the Blackrock Tailoring Co etc without any knowledge (by us or them) that it was excellent quality. To all of us it was only shirts.A cash flow crisis continued to dog us in spite of this limited source of quick money. The wage bill was about £500 per week for the 100 workers and often we didn't have it. When a crisis loomed my father would phone me on Wednesday (all wages were paid in cash) and ask me to send him a personal cheque. As I had no money we had to plan carefully. He would bring my cheque to the bank on Friday, lodge it and draw down the wages. My father would then send me a cheque to lodge on Tuesday so that there would be money in my account to meet the cheque coming down from Donegal. I would scurry about the Dublin customers to get what money due to me from last week's deliveries and send it to Donegal to meet the cheque now heading in that direction. If I failed to get the money I would send a further cheque of mine and Donegal would do the same to me until we found cash somewhere to meet one or other. This is known as 'kiteing cheques' and is illegal but was commonplace enough. In 1967 Max Johnstone and Lawtex had built their own facility in a church in Athy and kissed us goodbye. We went into liquidation a few weeks later.

00:02:36

Irish Research Council for Arts, Humanities & Social Sciences (IRCHSS)

Dr Kathleen McTiernan (Trinity College Dublin)

Dr Deirdre O'Donnell (Trinity College Dublin)