Hanesbrands To Cut 8,100 Western Hemisphere Jobs, Shift Output To Lower-Cost Plants
As part of its ongoing consolidation and globalization cost-reduction strategy, Winston-Salem, N.C.-based innerwear, outerwear and hosiery manufacturer and marketer Hanesbrands Inc. has announced it will close nine plants in North Carolina, Central America and Mexico and move production to lower-cost facilities in Asia and Central America. The closures, which have already begun and are expected to be completed by the end of summer 2009, will result in the loss of nearly 8,100 jobs at those plants, impacting approximately 16 percent of the company’s current workforce of some 50,000 employees in more than 25 countries.
In North Carolina, five facilities are slated for closure including two knit-fabric plants in Forest City and Eden — the last of the company’s US-based large knit-fabric production facilities — as well as two yarn plants in Gastonia and Eden, and a sheer hosiery inventory warehouse in Rockingham. In all, 1,345 positions will be eliminated at those facilities. Textile production will be transferred to existing plants in Central America.
Four sewing plants will be shuttered in Central America and Mexico including one in El Salvador with 2,600 employees, one in Costa Rica with 1,250 employees, one in Honduras with 1,250 employees and one in Mexico with 1,650 employees. Most of the production from these plants will be transferred to Hanesbrands’ four new sewing plants in Asia — two in Thailand and two in Vietnam. The company will add 2,000 employees to the current 4,000 at the Asian plants.
Hanesbrands also expects to begin production in 2009 at a textile fabric facility it is building in Nanjing, China, to provide fabric for its sewing network in Asia.
“In addition to improving cost competitiveness, these moves will lay the foundation for completing our Asia build out and improve the alignment of our sewing operations with our end-state flow of textiles,” said Gerald Evans, president, chief global supply chain officer, Hanesbrands. “ We regret that employees will be affected by this production streamlining, but our supply chain globalization is necessary to strengthen our overall company and keep us competitive around the world.”
Affected employees will be eligible for severance benefits and career transition assistance.
The announced plant closings are the latest in a string of closures and consolidations the company has implemented within its US- and Latin America-based manufacturing operations since it became an independent, publicly traded company in September 2006. Following the closures, Hanesbrands’ US-based operations will include 11 manufacturing facilities — including yarn, small specialty textiles, socks and sheer hosiery — plus corporate and retail operations, and will employ approximately 11,000 people. With the expansions underway in Asia and some additional expansion in Latin America and the Caribbean region, the company will on an ongoing basis maintain a global workforce of approximately 50,000 employees, according to company spokesman Matt Hall.