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  1. #1

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    Hanesbrands laying off workers in Gastonia

    Hanesbrands laying off workers in Gastonia

    Posted: Sep 24, 2008 11:07 AM EDT

    Updated: Sep 24, 2008 12:34 PM EDT


    Written by Jeff Rivenbark

    GASTONIA, NC (WBTV) - More than a hundred workers at the Hanesbrands Inc. yarn plant in Gaston County are without a job.

    The Gastonia plant is located on Poplar Drive in Gastonia. We're told many of the workers were in tears after hearing the news.

    Plant officials informed the 140 employees about the news when they showed up for work Wednesday morning.

    The company is cutting 8,100 jobs nationwide and several hundred people will be laid off in North Carolina.

    By the end of the week, the company will stop operations at the textile plant in Forest City, N.C., which has 470 employees.

    The company's sheer hosiery inventory warehouse in Rockingham, N.C., which has 15 employees, will cease operations by the end of November.

    By the end of the year, production is expected to cease at the company's yarn plant in Eden, N.C., affecting 120 employees.

    The closures are part of the company's restructuring plan. Altogether, Hanesbrands will close nine of the company's plants across five countries.

    The company has about 50,000 employees in 25 countries.

    WBTV's Steve Crump will have more details about the layoffs in Gaston County starting at 5 p.m.

    * * *


    (The following press release is from HanesBrands, Inc.)

    HANESBRANDS INC. ANNOUNCES LATEST PROGRESS IN SUPPLY CHAIN STRATEGY TO BALANCE GLOBAL PRODUCTION AND FURTHER IMPROVE COST COMPETITIVENESS

    Additional Streamlining Consolidates Production into Fewer and Bigger Facilities, Increases Alignment of Sewing Production in Asia
    Winston-Salem, N.C. (Sept. 24, 200 - Hanesbrands Inc. (NYSE: HBI) announced today continued progress in executing its consolidation and globalization cost-reduction strategy, which includes increasing production in Asia.


    The latest supply chain streamlining, expected to be completed by the end of summer 2009, will consolidate production through nine plant closures in five countries in the Western Hemisphere, affecting approximately 8,100 employees. It also will complete the migration of the company's large knit-fabric textile production from the United States.

    "We are making significant progress in expanding our supply chain production capability in Asia and consolidating into fewer, larger facilities located in lower-cost countries around the world," Hanesbrands Chief Executive Officer Richard A. Noll said. "Globalizing our supply chain, and eventually balancing production between Asia and the Western Hemisphere, is a critical plank in our strategic efforts to reduce costs, improve product flow and increase our competitiveness."

    By the end of 2008, Hanesbrands is expected to substantially close seven plants - a sewing plant in El Salvador, affecting 2,600 employees; a sewing plant in Honduras, affecting 1,250 employees; a sewing plant in Costa Rica, affecting 1,250 employees; and two yarn plants, a knit-fabric textile plant and an inventory storage warehouse in the United States, affecting 745 employees.

    By the end of summer 2009, the company expects to also close a sewing plant in Mexico, affecting 1,650 employees, and close its last large knit-fabric textile plant in the United States, affecting 600 employees.

    Hanesbrands expects to incur restructuring and related charges for these nine plant actions, including severance and contract termination costs, accelerated depreciation of fixed assets and inventory write-offs, totaling approximately $76 million, of which approximately two-thirds are expected to be incurred in the third quarter of 2008. With these charges, Hanesbrands will have taken approximately $204 million out of the $250 million in restructuring charges the company has said it expects to incur in the three years following the spinoff.

    "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, Hanesbrands president, chief global supply chain officer. "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."

    The textile production from the latest closings will be absorbed into existing textile plants in Central America. Hanesbrands has expanded its fabric production capability offshore in the Western Hemisphere. The company has reached planned fabric production levels at its textile facilities in the Dominican Republic and El Salvador, with further expansion planned in Central America.

    Most of the sewing production from the Central American plants that will close will be moved to the company's new Asian facilities. Hanesbrands has opened or acquired four sewing plants in the past two years - two in Thailand and two in Vietnam. Hanesbrands expects to increase its workforce in Asia from 4,000 today to 6,000 by the end of 2008.

    "Our startup of supply chain operations in Asia is progressing very well," Evans said. "Since acquiring our first sewing operation in Chonburi, Thailand, in 2006, we have doubled production at that plant with the same number of operators, as we bring to bear our production and plant operations expertise. Operations in Vietnam are starting very fast with excellent quality from a very capable workforce."

    The company is also constructing a textile fabric plant in Nanjing, China, which is expected to begin the ramp up of production in 2009 to supply fabric to the company's expanding Asian sewing network.

    2008 Actions by Country

    In El Salvador, the company is ceasing most production this week at its Pedregal sewing plant near San Salvador, affecting approximately 1,900 employees. All production is expected to end by the end of the first quarter in 2009, affecting another 700 employees.

    In Costa Rica, the company has ceased production at its Industria Textileras sewing plant in Cartago, near San Jose, affecting approximately 1,250 employees.

    In Honduras, the company will cease production by the end of the year at its intimate apparel sewing plant in Choloma, near San Pedro Sula, affecting approximately 1,250 employees.

    In the United States, production will cease this week at the company's knit-fabric textile plant in Forest City, N.C., which has 470 employees, and at its yarn plant in Gastonia, N.C., which has 140 employees. Operations at the company's sheer hosiery inventory warehouse in Rockingham, N.C., which has 15 employees, are expected to end by the end of November. Production is expected to end by the end of the year at the company's yarn plant in Eden, N.C., affecting 120 employees.

    The company will provide severance benefits and career transition assistance to employees. "We will work diligently to assist our employees in their transition," Evans said. "These moves are a result of our strategy to compete in the global marketplace and are unrelated to the quality of work of our employees at these facilities. We have an outstanding workforce around the globe, and the employees at these facilities are very talented."

    2009 Actions by Country

    The following plants are expected to close by the end of summer 2009.

    In Mexico, the company expects to close its San Pedro, Coahuila, sewing plant, affecting 1,650 employees.

    In the United States, the company expects to close its knit-fabric textile plant in Eden, N.C., affecting approximately 600 employees.

    More information about Hanesbrands Inc. may be found on the internet at http://www.hanesbrands.com.

    http://www.wbtv.com/Global/story.asp?S=9065367
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  2. #2
    Senior Member Dixie's Avatar
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    I bet they are taking production overseas and outsourceing the jobs.

    Dixie
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    We are making significant progress in expanding our supply chain production capability in Asia and consolidating into fewer, larger facilities located in lower-cost countries around the world," Hanesbrands Chief Executive Officer Richard A. Noll said. "Globalizing our supply chain, and eventually balancing production between Asia and the Western Hemisphere, is a critical plank in our strategic efforts to reduce costs, improve product flow and increase our competitiveness."
    In other words, even mexico has become too expensive for Hanes! Instead of paying someone $10.00 a day to work in one of their sweat shops, they can shift additional operations to Asia, where they can get away paying someone $2.50 a day.
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    Administrator ALIPAC's Avatar
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    Gastonia and especially Forest City were in dire straits before this happened. Most of the manufacturing in Western NC has already pulled out and local areas are losing people now to.

    W
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  5. #5
    MW
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    Senior Member MW's Avatar
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    Dixie wrote:

    I bet they are taking production overseas and outsourceing the jobs.
    Yep, the article states they are expanding their plant production in China. This is definitely a case of going where the cheapest labor can be found. Of course on the other side of the coin, they probably couldn't compete without this move. Sounds like they were forced to restructure due to a possible bankruptcy.

    This may not be one of those cases where greedy corporate leaders decided to move for the sole purpose of exploiting cheap labor. This could very well be a move for survival.

    The U.S. Congress and presidential administrations, past & present, shoulder most of the blame. Poor trade policies have created this mess.

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  6. #6
    Senior Member butterbean's Avatar
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    Quote Originally Posted by Dixie
    I bet they are taking production overseas and outsourceing the jobs.

    Dixie
    I think it has already happened. Hanesbrands hose has gone down in quality. I was wondering why, and now I know. I be alot of it is already bought in from other countries.
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