MONTREAL — The Solidarity Fund, a union-backed investment fund, plans to sell off its 11.2 percent share in Montreal-based Gildan Activewear Inc. over allegations the T-shirt manufacturer fired about three dozen workers who were trying to unionize the company’s sewing plant in Honduras.
This story first appeared in the November 14, 2003 issue of WWD. Subscribe Today.
The fund said Wednesday it will dispose of its 2.5 million class A subordinate shares, worth about $70 million, in an orderly fashion over the next 12 to 24 months. In addition, the fund’s representative on Gildan’s board has resigned.
Gildan shares fell 47 cents to $27.39 on the New York Stock Exchange Thursday.
“These decisions stem from a fundamental disagreement between the fund and Gildan with respect to employees who were fired last year in Honduras,” the fund said in a statement. “The fund believes that Gildan hindered the workers’ right to association recognized in Honduras.”
The company denied it had fired any workers related to union activity.
“We’re always laying off or hiring based on our needs,” said company executive vice president and chief financial officer Laurence Sellyn. “Last year we laid off 200 workers and the fund claims that 38 of them may have been trying to organize a union, but we never received any notification to that effect.”
Earlier this month, Gildan announced it became the first Canadian company and first blank T-shirt manufacturer to become a member of the Washington-based Fair Labor Association that promotes adherence to international labor standards.
The Solidarity Fund is a development capital fund created in 1983 by the Quebec Federation of Labor, Quebec’s largest union, to help create and maintain jobs in small and medium-size businesses in the province, while offering shareholders a fair return. It currently has more than 550,000 shareholders and has $3.5 billion in assets under management.
Gildan also recently said it has formed a 50-50 joint venture with one of its existing suppliers, Frontier Spinning Mills of Sanford, N.C., to acquire the assets of Harriet & Henderson Yarns of Cedartown, Ga. That company recently filed for Chapter 11. The total cost of the deal is about $12.5 million, which represents a significant discount from book value, according to Sellyn. He said the entire output at Cedartown of 800,000 pounds per week will support Gildan’s ongoing operations in Honduras.