Levi to lay off 3,600 and shut 6 U.S. plants

2 factories left after shift of production overseas

April 09, 2002|By BLOOMBERG NEWS

SAN FRANCISCO - Levi Strauss & Co., whose sales are falling for a sixth year, will fire 3,600 people and close six U.S. plants as the jeans maker shifts production to lower-wage countries such as Mexico.

"It's a painful but necessary business decision done for competitive reasons," said William B. Chiasson, Levi's chief financial officer. The job cuts equal 22 percent of Levi's work force.

Three factories in Texas and one each in Georgia, California and Tennessee will be shut, and 3,300 positions eliminated, Levi said. That will leave the closely held company with two U.S. plants, both in San Antonio, down from 31 in 1997, said Linda Butler, a Levi Strauss spokeswoman.

Levi has been making jeans since 1887. The maker of Levi's jeans and Dockers slacks currently has 21 plants worldwide and employs 16,600, including 9,000 factory workers.

About 28 percent of Levi's jeans for the U.S. market have been made at its own domestic plants, down from about two-thirds in 1997. With yesterday's announcement, that percentage will decline "significantly," Butler said.

The San Francisco company plans to shut plants in Blue Ridge, Ga., and San Francisco by the end of June, and factories in Brownsville and San Benito, Texas, in August. The plants in Powell, Tenn., and El Paso, Texas, will be closed in October.

A sewing plant, with 600 workers, and a finishing plant, with 530, will remain, Levi said. The additional 300 cuts will come only from the finishing plant.

Levi said it has negotiated an employee-separation package with the United Food and Commercial Workers union, which represents workers at the Tennessee and San Francisco plants. Talks are still in progress with the Union of Needletrades, Industrial and Textile Employees (UNITE), which represents workers at the other four plants.

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