Levis Strauss to fire almost 2,000 workers |

Levis Strauss to fire almost 2,000 workers

Levi Strauss & Co., which has been making jeans in the United States since the California Gold Rush, will close its last North American factories and fire about 1,980 people as the company moves production to lower-wage-paying countries.

The job cuts, 16 percent of the company’s workforce, include 800 workers at a San Antonio plant to be shuttered by year’s end. An additional 1,180 jobs will be eliminated when sites in Edmonton, Alberta; Stoney Creek, Ontario; and Brantford, Ontario, are closed in March, San Francisco-based Levi Strauss said in a statement.

Levi Strauss, whose sales have fallen for six years, said it will contract with suppliers in Latin America and Asia to compete with clothing makers that have lower expenses overseas. The company will focus on designing and marketing products. The job cuts come after Levi Strauss, which had 31 U.S. plants in 1997, said last year it would close six U.S. factories and fire 3,600 workers.

“Levi has an important asset in its brand and is becoming a marketing company,” said Charles McMillion, economist with MBG Information Services, a consultant whose clients include textile and apparel companies. “There’s a glut of production capacity in the industry. Companies can’t continue to carry idle capacity and they are shutting it down.”

The closely held company, which sells apparel in more than 100 countries, is in negotiations with its labor unions to complete severance packages, spokeswoman Linda Butler said.

“This is a tragic day for Levi workers, for their families and for their towns,” Bruce Raynor, president of the Union of Needletrades, Industrial and Textile Employees, said in a statement. He called for restrictions on imported apparel and textiles to protect U.S. manufacturing jobs.

In July, Levi Strauss began selling its Signature brand of jeans at Wal-Mart Stores Inc., the world’s biggest retailer. The move into discount stores is intended to bolster sales as consumers have been shifting spending to lower-price chains from department stores and specialty stores.

Levi Strauss is seeking a new $1.15 billion financing agreement to replace its existing $850 million arrangement.

Standard & Poor’s earlier this month lowered its non- investment grade rating on Levi Strauss two levels to B from BB-. The company had about $2.3 billion in long-term debt as of May, according to regulatory filings.

Earlier this month, Levi Strauss said it will fire as many as 650 people in the United States and Europe.

The company’s 11.625 percent coupon notes maturing in 2008 fell 0.50 cents on the dollar to 86 cents on the dollar, according to Trace, the bond price reporting system of the National Association of Securities Dealers. The yield rose to 16.265 percent from 16.080 percent.

Company founder Levi Strauss moved to San Francisco from New York when he learned of the California Gold Rush and started a dry-goods business in 1853 to sell to throngs of miners. In 1873, he received a patent for adding reinforcing rivets to denim pants.

Cone Mills Corp., a maker of denim whose customers include Levi Strauss, filed for Chapter 11 protection, the company said in a statement yesterday.

The filing clears the way for a $90 million buyout by financier Wilbur Ross. Ross’s WL Ross & Co. plans to merge Cone Mills with bankrupt Burlington Industries Inc. to reduce costs.

Imports from Asia and higher raw material costs have hurt business at Cone Mills and forced other textile companies such as Galey & Lord Inc. and Guilford Mills Inc. to seek bankruptcy protection. The U.S. textile industry has lost about 30,000 jobs since January 2002, Cone Mills said.

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