Gildan Activewear closing 5 plants, cutting 1,800 jobs
Last Updated: Tuesday, March 27, 2007 | 8:45 AM ET
CBC News
Clothing company Gildan Activewear Inc. plans to close its two remaining textile plants in Montreal, plus two plants in Mexico and one in New York, in a move that will eliminate over 1,800 jobs.
The Montreal-based company is shifting production to Central America and the Caribbean.
The plants in Montreal, and a cutting facility in Bombay, N.Y., are slated to shut down in the fourth quarter, putting 465 people out of work.
A pair of sewing plants in Mexico that are supplied with fabric from the Montreal operations will also close immediately, resulting in the elimination of 1,365 jobs.
In a release, Gildan said the shift in production is "unavoidable in order to be globally cost-competitive in the intensely competitive North American apparel industry."
Vice-president Cam Gentile said the cost to produce 12 T-shirts in North America is $3 higher than in Central America.
Gildan said it will incur a restructuring charge of approximately $21.5 million US, or 35 cents per share, in fiscal 2007. The charge includes 29 cents a share for severance and other cash costs and six cents a share for asset writedowns.
The changes mean Gildan will save about $45 million US on its activewear manufacturing costs and related freight and duties beginning in fiscal 2008, the company said.
Last October, the company chopped 546 jobs in Canada and the United States when it closed a textile plant in Valleyfield, Que., downsized a knitting facility in Montreal and consolidated some operations in the U.S.
Shares of Gildan rose $1.21 to close at $67.03 on the TSX.
With files from Canadian Press
