Tuesday, November 4, 1997
Levi Strauss closing 11 plants, laying off
By MARTHA IRVINE Associated Press Writer
SAN FRANCISCO (AP) - With demand for its jeans on the decline,
Levi Strauss & Co. said Monday it will close 11 plants in
four states and lay off nearly 6,400 employees.
The world's largest brand-name apparel maker said the job cuts
will reduce its total manufacturing workforce in the United States
and Canada by 34 percent - about the same percentage that Levi's
was overproducing for the U.S. market.
"In the 1960s, '70s and 80s, we were chasing demand and
couldn't produce fast enough," company spokesman Gavin Power
said. "It's not like that anymore."
This is the second time this year that the privately held company
has cut its workforce. In February, the company slashed 1,000
jobs in an effort to cut $80 million in costs.
"It's like a battleship that's taking on water,"
said Alan Millstein, editor and publisher of Fashion and Network
Report, an industry newsletter. "Through the '90s they've
That's due in large part to rising competition in the jeans
market. Not only have high-end designers like Ralph Lauren and
Tommy Hilfiger cut into sales, but consumers also favor less expensive
private-label jeans available at retailing giants such as Sears,
Roebuck & Co.
"A lot of people can buy jeans for less than Levi's is
offering them at and get the same quality," said Kurt Barnard,
a retail consultant and president of Barnard's Retail Trend Report.
The plants that will be shuttered include one each in Fayetteville
and Harrison, Ark., Albuquerque and Roswell, N.M., and Centerville,
Tenn. A sewing plant and finishing center in Knoxville, Tenn.,
will be closed as well four plants in Texas, one in San Angelo
and three in El Paso.
Sewers at Levi's 1,800-employee finishing plant in Knoxville,
were told to turn off their machines Monday morning as a voice
over the public address system said, "We have some devastating
"It was hard even sitting at your machine today,"
said Willie DeLaney, who has worked at the plant for a dozen years.
The privately-held company will spend $200 million in severance
and other employee benefits. Workers affected by the job cuts
will get eight months' paid notice and up to three weeks severance
pay for every year of service.
U.S. Labor Secretary Alexis Herman also said that federal officials
would assist laid-off workers with job search assistance and retraining.
In addition, the Levi Strauss Foundation plans to spend $8 million
in grants to communities involved.
Officials at the San Francisco-based company, which had $7.1
billion in sale in 1996, said the plant closures will be completed
by the end of next summer.
But they remained adamant that they will not be creating manufacturing
jobs in Mexico or Southeast Asia, where the company already has
"It's a U.S. capacity problem," Power said. "None
of these jobs are moving overseas."
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