Apparel’s Latest Blow: No More Levi’s Plants, 2,000 Jobs To Be Lost

Levi Strauss plans to close its remaining North American factories and make all its apparel through outside contractors, cutting about 2,000 jobs.

NEW YORK — The quintessential American brand will no longer be made in America. Levi Strauss & Co. said Thursday it plans to close its remaining North American factories and instead produce all its apparel through outside contractors, ending 131 years of producing its own jeans.

The round of cuts, which will cost almost 2,000 jobs in the U.S. and Canada, completes a shift the firm began six years ago. Over that time, the San Francisco-based jeans firm has cuts its worldwide workforce by about two-thirds to approximately 12,400, according to a spokeswoman.

This story first appeared in the September 26, 2003 issue of WWD.  Subscribe Today.

By year’s end, the company will shutter its sewing and finishing operations in San Antonio, a pair of 25-year-old plants that employ 800 people. By March, it intends to close two sewing plants, in Stoney Creek, Ontario, and in Edmonton, and a finishing center in Brantford, Ontario, which combined employ about 1,180 people.

Today, Levi’s employs 6,505 workers in the U.S. and Canada.

President and chief executive officer Phil Marineau said in a statement, “We’re in a highly competitive industry where few apparel brands own and operate manufacturing facilities in North America. In fact, we are one of the last companies to do so.”

For two decades, U.S. branded apparel marketers have been shifting production to outside contractors overseas, where they take advantage of lower wages and other savings on operating costs. Levi’s, as well as competitor Greensboro, N.C.-based VF Corp., by the late Nineties were the largest remaining branded producers that maintained their own U.S. factories.

VF in recent years also has been closing plants, in a shift to offshore contractors.

Intensifying competition with foreign manufacturers has been battering domestic makers in all sectors of the textile and apparel industry and, in particular, the surge of imports in Chinese-made garments and fabric — up more than 40 percent for the year ended July — has been singled out as a cause.

A growing coalition of textile and other manufacturing groups have been turning up the volume in Washington on the effects of liberal trade policies on U.S. employment. Bruce Raynor, president of UNITE, said in a statement Thursday, “UNITE places the blame for this tragedy squarely at the feet of the Bush administration.”

He praised Levi’s for its efforts to keep manufacturing in the U.S., adding, “they maintained a clear commitment to the high road of management, working cooperatively with the union and paying good wages and benefits to the workers.”

Marineau noted the company will be paying severance packages to the workers and would be making grants to the affected cities to help fund retraining programs.

Levi’s closed its U.S. plants through several major waves of layoffs, most recently closing six factories at a cost of 3,600 jobs in April 2002. In 1997, before the company began shifting out of domestic manufacturing, it employed 37,000 people worldwide.

In an interview earlier this year, chairman Robert Haas, a member of the family descended from the Bavarian immigrant, Levi Strauss, who founded the company 150 years ago, said Levi’s might have waited longer than it should have to make the shift to contract production. Levi’s was founded in 1853 as a dry goods trading company and in 1872, introduced the first riveted men’s overalls, invented by Reno, Nev., tailor Jacob Davis.

“Any objective business person looking at our conduct would say we were way too sentimental and protective of our owned-and-operated factories well beyond the time when it was productive to maintain them,” he said in April. “I take full responsibility for having resisted something that we probably should have done earlier. But we do feel a very strong obligation to our employees and we wanted to diminish this disruption as long as we possibly could.”

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