MEXICO CITY — Hanes Brands will close its Costa Rican boxer manufacturing business in November, dismissing 1,250 workers to shift production to Vietnam, the operations director of its Cartex subsidiary Mauricio Brenes confirmed.
The company will shutter factories and fold its business November 7.
The move stems from Hanes desire to move some of its unisex underwear cutting and sewing operations close to its Chinese fabric suppliers.
“This is a logistic move to cut costs,” Brenes said, without revealing potential savings from the action. He said the Cartex factory made mostly men’s knit boxers but also a range of men and women’s underwear for sale in the U.S
Brenes would not say where in Vietnam Hanes will move production but added the decision will see Hanes leave Costa Rica after 40 years in the country.
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He added transferring output to other Central American countries with cheaper labor costs than Costa Rica had been explored but “management made the best decision based on a rigorous strategic analysis.”
Rodolfo Molina, president for top textiles trade association Cateco, said Hanes’ decision is mainly in response to Costa Rica’s relative high wages, which he conceded has prompted many other labor-intensive U.S. manufacturers to flee the country.
“Costa Rica has the highest salaries in Central America with monthly wages for textile workers ranging at $600 compared to $150 in Nicaragua and even less in Vietnam.”
Molina said the Hanes dismissals add to roughly 7,000 jobs lost in its struggling textile and apparel manufacturing industry in the past five years.
He said the sector is working to turnaround its fortunes by encouraging less labor intensive thread and fabric suppliers to move to its shores.
Despite exiting Costa Rica, Hanes has a strong presence in Latin America with manufacturing facilities in El Salvador, Honduras, Mexico and Dominican Republic.