Hanesbrands Inc. will cease production at three sewing and assembly operations located in Itabo, Dominican Republic. The company is consolidating sewing production into fewer facilities that are aligned with textile fabric production and can operate more efficiently as larger operations.
Production in Itabo will cease by September 2007 and will result in a reduction of approximately 1,400 jobs. All affected employees will receive severance payments.
Hanesbrands expects to take restructuring and related charges of approximately $3 million for the closures, including severance, lease exit costs and accelerated depreciation of fixed assets.
“We are fully engaged in our global supply chain strategy of doing business around the world in lower-cost countries,” said Gerald Evans, Hanesbrands executive vice president and chief global supply chain officer. “We continually review how to remain most competitive in every country and region around the world in which we operate, particularly as we begin to add operations in Asia to balance our supply chain in the Western Hemisphere. A key opportunity for us is to operate fewer facilities that are larger in order to most effectively utilize our assets. We regret the loss of jobs for our employees in Itabo. This was a difficult decision driven by competitive business needs and a compelling opportunity to take advantage of cost reduction.”
In the past two years, Hanesbrands has added newer, lower-cost textile production in the Dominican Republic and Central America and is aligning its sewing operations around those fabric production centers.
In addition to the sewing operations in Itabo and the new Dos Rios textile manufacturing plant in Bonao, Hanesbrands has six other sewing and intimate apparel assembly operations in the Dominican Republic.
Since its spinoff as an independent company in September 2006, Hanesbrands has announced 10 manufacturing facility closings in the Dominican Republic, Mexico, Puerto Rico, and the United States.
