Jean maker Levi Strauss is closing down its last three Canadian manufacturing plants as it shifts production out of North America. It will cost 1,180 people their jobs.
The Canadian division of Levi Strauss said two sewing facilities in Edmonton and Stoney Creek, Ont., as well as a finishing centre in Brantford, Ont., will close in March 2004.
Levi Strauss said the closures are part of a continuing shift away from company-owned manufacturing facilities made necessary to stay competitive.
The company is also shutting its plant in San Antonio, Texas, by the end of this year, costing about 800 jobs.
When the Canadian and American plants are closed, the company will not have any of its own North American assembly plants. The work will be shifted to other sources around the world.
"Moving away from owned-and-operated manufacturing to a broader sourcing base will strengthen our business by giving us much more flexibility," Julie Klee, general manager of Levi Strauss' Canadian operations said.
"It will allow us to use the right sources with the capabilities and cost-competitiveness that we need to get a wider range of products to market faster," she said.
The company said it will discuss a severance package with unions in the coming weeks.
Unions reps said the Levis Strauss workers had good benefits and pension plans, things that the company felt hurt its bottom line.
"You'll see the same styles, you'll see the red tabs, the silver tabs their signature lines all those but none of them will be manufactured in North America," union representative Alex Dagg said.
"They'll all be manufactured all over the world in this global race to the bottom to find the cheapest source of labour," Dagg said.
In February 1999, Levi Strauss cut 600 jobs when it closed a plant in Cornwall, Ont., and trimmed staff at the plant in Brantford. At the same time, the company chopped 5,000 jobs in the United States as it closed 11 North American plants, citing weak sales of jeans.
Cone Mills, world's biggests denim maker, files for bankruptcy
Meanwhile, Cone Mills Corp., the world's top maker of denim fabric and a Levi Strauss supplier, filed for bankruptcy protection on Wednesday, in advance of the company being sold to new owners.
Cone Mills blamed an influx of cheap fabric from Asia for declining sales of its denim. The company recently missed a $4.1 million US interest payment.
The 112-year old company, based in Greensboro, North Carolina, has accepted a $90 million US offer from financier Wilbur Ross to buy the firm's assets.