“We have an outstanding workforce that exhibits continued commitment and professionalism even when receiving difficult news. We will work diligently to assist in their transition.”
Hanesbrands expects to incur restructuring and related charges for these actions, including severance costs and accelerated depreciation of fixed assets, totaling approximately $42 million, primarily in the second quarter of fiscal 2007 with the majority of the remainder in the second half of fiscal 2007.
Approximately $12 million of the charges will be noncash. These charges, plus previously announced restructuring charges of $74 million, represent nearly half of the approximately $250 million in restructuring charges the company expects to incur in the three years following its spinoff.
Hanesbrands will continue to execute its global supply chain strategy of moving production and operations to lower-cost countries, operating fewer and bigger facilities and aligning production flow for maximum flexibility. In the long-term, the company expects to balance its supply chain between the Western Hemisphere and Asia.
“In addition to improving cost competitiveness, these moves will improve the alignment of our sewing operations with the flow of textiles and will leverage the company's large scale in high-volume products,” said Gerald Evans, Hanesbrands executive vice president and chief global supply chain officer.
In Canada, the company's intimate apparel fabric cutting plant in Montreal will cease production, affecting approximately 50 employees. Production will shift to Asia.
In the Dominican Republic, the company will cease production at sewing plants in Santo Domingo and Santiago, shifting production to company sewing plants in Central America and Thailand. The plant closures will affect approximately 2,500 employees.
In Mexico, production will cease at sewing or fabric cutting plants for knit products and intimate apparel in Cadereyta de Montes, Madero, Merida and Nueva Rosita, affecting 2,200 employees. Production will shift to Central America and elsewhere in Mexico. In Puerto Rico, the company will close its innerwear fabric cutting plant in Vega Baja, employing approximately 150. Production will move to company cutting plants in Central America and Thailand.
In the United States, intimate apparel fabric lamination and sewing in Statesville, N.C., with 70 employees, will cease operations and shift to Central America. Of the approximately 350 management and administrative positions that will be eliminated worldwide, approximately 90 percent are in the United States.
marketing@alchempro.com
