Wal-Mart has helped drive another American manufacturing icon offshore.
This week Hanes (HBI, Hanesbrands Inc) announced that it was abandoning four production plants in North Carolina, and five more in Central America. Chasing cheap labor, the Hanes jobs will shift to Thailand and Vietnam. According to MarketWatch, Hanes is attempting to lower costs to remain competitive, "and answering to the demands of retailers such as No. 1 discounter Wal-Mart Stores Inc."
The American consumer knows Hanes as the company that makes T-shirts, bras, panties, men's and children's underwear--the same underwear that Michael Jordan wears. Hanes boasts that its brands "can be found in eight out of 10 American households." Brands such as Playtex and Wonderbra, Hanes, Champion and L'eggs. Most Americans think that Hanes products are as American as Michael Jordan. But the Winston-Salem, North Carolina-based Hanesbrands long ago quietly shifted to a new vision for the company: "to be a world-class consumer goods company with a distinctive competence in operating a low-cost global supply chain." That sure ain't North Carolina.
Hanes plant closings will throw 8,100 workers out of their jobs. 16% of those lost jobs---1,345 workers---live in North Carolina. The other 6,750 workers are in Central America. Since the Autumn of 2006, when Hanes split from Sara Lee, the manufacturer has shuttered nearly 30 plants--a third of them in its home state.
In Eden, North Carolina, Hanes just expelled 600 jobs from the garden. The cuts will take place over the next year. The company's plant in Eden was the largest of its remaining U.S. facilities. A second yarn plant in Eden will also unravel. The sudden announcement caught Eden City Manager Brad Corcoran by surprise. "I have no idea what's going on" Corcoran told the Winston-Salem Journal. "There was no courtesy call, no e-mail, no nothing. Obviously that wasn't a concern for them."
In addition to Eden, plants are also disappearing in Forest City, Glastonia, and Rockingham, North Carolina. Was it with some sense of pride that Hanes said these closings "will complete the migration of the company's large knit-fabric textile production from the United States?" Unlike songbird migrations, the Hanes jobs will not return in the Spring. But 'migration' is a soft, lovely image, not as harsh as 'global outsourcing.'
Despite all these closings, Hanesbrands will not have 'migrated' completely. The company will still have close to 10,000 jobs left in America, scattered across 11 plants. So there is some work still left for Wal-Mart to do.
Fleeing the U.S. was described by Hanesbrands as a good thing. "We are making significant progress in expanding our supply chain production capability in Asia and consolidating into fewer, larger facilities located in lower-cost countries around the world," the company's chief executive boasted. "Globalizing our supply chain, and eventually balancing production between Asia and the Western Hemisphere, is a critical plank in our strategic efforts to reduce costs, improve product flow and increase our competitiveness."
This week's announcement is one more move towards "completing our Asia build out" the company said. But there was one, brief note of remorse. "We regret that employees will be affected by this production streamlining, but our supply chain globalization is necessary to strengthen our overall company and keep us competitive around the world."
That will be great comfort to the American Hanes workers, who can now tell their families over dinner, "I've been streamlined." Like those sleek, Hanes models that show off their underwear products.
The sewing production jobs shut down in Central American plants will be streamlined to new Asian plants, as Hanesbrands Asian jobs rise from 2,000 to 6,000 by the end of the year. Hanes is also building a new plant in Nanjing, China. The workers who are losing their jobs in El Salvador, Costa Rica, Honduras and Mexico, can apply for work in Nanjing. That would promote Global Diversity.
But its really not Hanesbrands that's leaving America. The company had Wal-Mart as its travel agent. Wal-Mart---and the 200 million Americans who shop there every month---have pushed Hanes into Asia. But Hanes is covering its rear end. "As our company continues to grow," Hanes explains, "our commitment to being a responsible corporate citizen grows, too."
This week's job cuts were the responsible thing for a global corporate citizen to do. As a reward for that attitude, Hanesbrands shares, rose 0.3% to $23.90 in early afternoon trading.
Al Norman is the founder of Sprawl-Busters. He has fought Wal-Mart at the city and town level for the past 15 years.