Josie Phillips was a packer at Baldwin's Casuals who moved to the sewing room when Shirley Armitage left the factory. Josie grew concerned when rumours started to circulate that the factory was to close. She confronted her boss Mike Baldwin but did not believe his assurances that all was well and her job was safe. Josie was proven right when she discovered that Mike had sold the factory, and suffered the indignity of being locked out of the premises by builder Maurice Jones, who demolished the factory building.
In January 1990, Josie was re-employed by Mike when he set up an operation to manufacture bags for distributor Peter Ingram using outworkers. Josie was annoyed that Mike had tricked her into taking the job by telling her that Ivy Brennan had also agreed to do so. She threatened to quit but backed down when Mike agreed to employ both Josie and Ivy and pay them double money. The order was completed but Ivy vowed never to work for Mike again.
When Ingram placed another order for travel bags, Josie, Ivy and Marge Butler formed a workers' co-operative to undercut Mike and took the business from him. Not to be beaten, Mike undercut Ingram and offered the travel bag company a cheaper deal. When Ingram told Ivy and co. that the order had been cancelled, the co-operative disbanded.
Mike advertised for machinists, and Josie was one of the successful applicants. Ivy was furious that Josie was working for Mike again and rowed with her in front of her new colleagues. Still without premises, Mike set up a machine room in the flat above Jim's Cafe. The noise and dust disrupted the café and when a Health and Safety inspector paid a visit, the enterprise was closed down, and Josie was unemployed once more.