CANADA: 1,830 jobs threatened by Gildan consolidation move
Gildan Activewear has announced plans to close its two remaining textile facilities in Montreal, Canada, and its cutting facility in Bombay, NY, in the fourth quarter of the current fiscal year.
In addition, the company said that two sewing facilities in Mexico, which are supplied with fabric from Gildan's Canadian textile operations, would be closed immediately.
Approximately 465 employees in Canada and the US and 1,365 employees in Mexico will be affected by the manufacturing restructuring.
It means that all of the apparel maker's vertically-integrated manufacturing for T-shirts, fleece, sport shirts and underwear will be consolidated into the company's manufacturing hubs in Central America and the Caribbean Basin, where it is investing in major capacity expansion projects.
Gildan will relocate its corporate office, which is currently located in the same building as its Montreal knitting facility, into leased premises in the Montreal area.
A statement by Gildan said: "The company will make every effort to alleviate the impact of the closures on all of its employees in all of the communities affected. In addition, the company will work closely with the Fair Labor Association and both North American and Mexican NGO's to ensure that best practices are followed in managing the closure of its Mexican sewing operations.
"Gildan recognises that the employees in the operations which are being closed have contributed significantly to the company's growth and success in recent years, and regrets that the relocation of its production capacity to its offshore manufacturing hubs is unavoidable in order to be globally cost-competitive in the intensely competitive North American apparel industry."
Gildan will incur a restructuring charge of approximately US$21.5m or $0.35 per share in fiscal 2007 as a result of the consolidation, but expects to generate close to $15m in cash proceeds from the disposal of buildings and surplus equipment.
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