Layoffs, Laments for London Fog

August 06, 1994

When it rains it pours. After eliminating 300 Maryland jobs earlier this year, the London Fog raincoat company plans to lay off 700 more workers and close its three remaining Maryland plants.

Despite last-ditch talks between company and national Clothing Workers union officials planned for next week, the prognosis is for a sad, swift departure for the firm that began in Baltimore over 70 years ago. The jobs, which pay about $300 a week, will be difficult to replace. The state's multi-million-dollar offer of incentives and grants to keep the plants open was not enough to bridge the wide gap between union and management.

Now nervous attention shifts to the future of 640 jobs at London Fog's distribution center in Eldersburg. Company executives suggest that its future is optimistic, with growth potential through future acquisitions -- as long as there is no union backlash such as a boycott or other protest campaigns as a result of the factory closings.

Whether that is a pre-emptive warning or a firm commitment, the Carroll County center is as important to the company as it is to the local economy. Unlike rainwear production, which the company says costs $18 per coat less overseas, the distribution facility must be strategically located near Eastern customers. But the company recently moved the corporate headquarters from Eldersburg to Connecticut, where the chief executive lives.

In one sense, the closing of the Maryland factories is part of the continuing shift of domestic garment-making jobs to lower-cost producers offshore. The new World Trade Organization treaty under consideration by Congress would increase apparel imports and cut up to 15 percent of U.S. jobs in the industry, a federal trade panel predicts.

But the London Fog shutdown may also have been due to false expectations and misperceived signals. The company wanted the union to drop an arbitration case over garment import limits. In June, without an agreement and movement in the union offer, the company felt forced to place orders overseas for the fall season. Union negotiators felt there was still time for 11th-hour bargaining.

Once that point was passed, the economic gap widened too far for the Maryland facilities to be salvaged. Earlier, there was the prospect of converting at least one plant to teamwork production from the traditional piecework method, with state aid. But London Fog refused to give long-term job commitments to the union.

Perhaps the impasse and the resulting plant closings were inevitable in this global manufacturing economy. But there is a nagging regret that the two sides could not have negotiated more flexibly and candidly to protect these Maryland jobs.

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