Gildan to cut more jobs in Mount Airy
Two sock plants will be closed as production moves out of the U.S.
Thursday, September 28, 2006
By Richard Craver and Sherry Youngquist
JOURNAL REPORTERS
Gildan Activewear Inc. took another step yesterday to reduce its Mount Airy manufacturing presence in favor of increasing production in Central America and the Caribbean.
The Montreal manufacturer, the largest T-shirt maker in North America and a competitor of Hanesbrands Inc. in Winston-Salem, said that it is closing two sock-manufacturing plants in Mount Airy and will reduce production at its sock plant in Hillsville, Va.
Gildan is cutting 176 jobs at Plant 6, a finishing operation off South Street, and 92 jobs at Plant 7, a trim finishing operation off U.S. 601, said Michael Albright, the director of human resources for Gildan's retail division. The company is eliminating 61 jobs at Hillsville.
Albright said that Gildan would have about 525 employees and three plants in Mount Airy and 239 employees and one plant in Virginia when the restructuring is finished in 60 to 120 days.
"We will be doing mostly specialized knitting and dyeing production in Mount Airy, along with a little bit of finishing," Albright said. Albright said that the company would apply for U.S. Trade Adjustment Assistance Act benefits and provide outplacement services for affected employees.
Gildan's decision did not come as a surprise, considering that its management had been discussing for months its plans for a major production shift out of North America. Gildan also said yesterday that cutting production in Canada would affect an additional 211 employees.
The announcement also comes less than three months after the company completed its purchase of Kentucky Derby Hosiery Co. for $45 million.
Kim Spence, a floor supervisor at the plant on South Street, said that it was an emotional day for employees.
"A lot of people cried, and a lot of people have been devastated," said Spence, who has worked for the company for two years. "I saw it coming once they announced the original buyout a few months ago."
On Aug. 24, Gildan said it was closing distribution centers in Mount Airy by Jan. 31 and in Danville, Va., by Nov. 30. About 88 employees in Mount Airy and 45 in Danville are affected.
Gildan said that despite the experience level of its U.S. and Canadian work forces, the company decided that making socks in Honduras was in its best long-term interests.
"The relocation of production capacity to the company's offshore manufacturing hubs in Central America and the Caribbean Basin is required in order to continue to be cost-competitive against Asian imports and other global producers in the intensely competitive North American apparel industry," the company said in a statement.
Gildan said it made the Kentucky Derby purchase as part of an expansion into sock manufacturing that also includes opening plants focused on athletic socks in Honduras. It also gained access to Kentucky Derby's customer base, which includes Wal-Mart, Kmart and Dollar General, as well as its retail expertise.
"Kentucky Derby was put under enormous price pressure from the flood of Chinese sock imports beginning in about 2003," said Jim Schollaert, the executive director of Made in USA Strategies. "That resulted from Congressional passage of Permanent China Most-Favored Nation treatment, and led to the sale of Kentucky Derby to Gildan.
"CAFTA approval by Congress last summer, will allow Gildan to move Mount Airy's sock production to Honduras, pay much lower taxes and production costs, and still ship their socks quota free and duty free to the U.S. market.
"We shall soon see whether the Bush administration lives up to its promise to impose a CAFTA sock safeguard on Honduras, which would result in a re-imposition of tariffs on sock imports from Honduras," he said.
The Gildan announcement is the latest textile-manufacturing blow, and one of the largest, to hit Surry County in the past 10 years. The county has lost 3,560 apparel and textile jobs since March 1996, of which 2,877, or 81 percent, were in Mount Airy, according to the N.C. Employment Security Commission.
"It's just one more hurdle we're going to have to find a way to cross," said Jack Loftis, the mayor of Mount Airy. "We certainly hate to lose these jobs, and we will certainly continue our economic-development efforts to replace them.
"I understand their reasoning with global textile competition, but it doesn't make it any easier for the workers and the families who likely will struggle to find work after they are laid off."
Spence said that employees suspected that Gildan eventually would close a Mount Airy plant. "This is not my first time. It's not my first closing." Spence worked previously for Pine State Knitwear Co. Inc. for 10 years before it closed operations in Mount Airy in January 2003.
Spence said she's worked in textiles all her life and has watched plant after plant close in Surry County and the surrounding area. She said she wonders what will eventually happen as most of the manufacturing there comes to a halt.
"It's going to be hard to find anything," she said.
• Richard Craver can be reached at 727-7376 or at rcraver@wsjournal.com.
|
