T-shirt maker Gildan completes shrinkage of North American manufacturing
MONTREAL (CP) - T-shirt maker Gildan Activewear Inc. (TSX:GIL) will cut more than 1,800 jobs in North America as it moves the last of its manufacturing to Central America and the Caribbean to challenge Asian competitors.
The company’s stock gained about two per cent to an all-time high after Gildan said it will shut down its two remaining textile plants in Montreal as well as a cutting facility in Bombay, N.Y., and two sewing factories in Mexico.
President and CEO of Gildan Activewear Glenn Chamandy.(CPimages/Ryan Remiorz) "We need to have a low cost base in order to be cost-effective with the Asian competitors," company vice-president Cam Gentile said Tuesday.
Gentile pointed to intense price competition from countries like Bangladesh, and said it costs $3 more to make a dozen T-shirts in North America than in Central America.
Before Tuesday’s announcement, more than 90 per cent of Gildan’s underwear, sock, activewear and finishing production was already done in countries such as Honduras and the Dominican Republic, where the company has invested in state-of-the-art technology.
The company expects the latest moves to save US$45 million in annual manufacturing, freight and duty costs.
The Montreal-based company said 390 employees in Canada, 75 in the United States and 1,365 in Mexico will lose their jobs as it finishes shrinking its North American operations. Last September, Gildan announced 550 job cuts in the Montreal area and in the United States, where it has a plant in Bombay, N.Y.
A Gildan spokeswoman said the company remains committed to keeping its head office in Montreal, although the personnel will move to another location.
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