By  on July 20, 2009

MANILA — Multinational undergarments giant Triumph International is closing its factories and distribution center in the Philippines after 35 years, citing decreased consumer demand.

Despite troubled labor relations recently, the move was a response to “the global recession and the general downturn in consumer demand and wholesale orders,” said Merve Liebelt, global head of public relations and events at Munich-based Triumph International. The restructuring was necessary for the company “to keep its business healthy in extreme market conditions.”

A total of 1,686 employees will lose their jobs. The factories were in the FTI complex in Taguig City, a Manila suburb. The sales and marketing division, employing 128 people, will remain in operation.

Although the factories have been shuttered, the official closing is Aug. 28, two months after management announced the move, to comply with the law requiring two-months notice.

It hasn’t been smooth sailing for Triumph in the Philippines in the last six months, as labor relations turned confrontational. Hundreds of workers, predominantly women, marched into the company’s sales office dressed in red T-shirts and clutching bras and panties, which were then thrown into the air. The workers were demanding higher wage increases.

In May, workers represented by the New Unity of Workers of Triumph International union began picketing the entrance to the factories.

Union president Isabelita de la Cruz said she rejected “management’s position that closure must be done to save the company from the effects of the global economic crisis and maintain its profitability. For the workers who feed and raise money for the German multinational company, it is a brazen attack on their rights and welfare and dignity.”

The union also claimed the closure was illegal and contrary to collective bargaining agreement conditions.

Philippine Secretary of Labor and Employment Marianito Roque said Triumph International had complied with the law.

“The workers’ situation is of serious concern to us and we have sat down with management and the unions to discuss a separation package that would be just and fair to these workers, some of whom have been with the company for more than 30 years,” Roque said.

Unemployment in the Philippines is 7.7 percent nationwide, although many among the population believe it is higher. The national economy is the 47th largest in the world, with a Gross Domestic Product of $168.6 billion in 2008. But about 45 percent of the population lives on less than $2 a day.

Liebelt said although there are no plans of factory closures in Thailand, China or Vietnam, “manufacturing operations in Thailand will be reduced, which will cause 1,930 employees” to be cut.

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