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Levi Strauss to close last two U.S. plants

Thursday, September 25, 2003
Associated Press

URL: http://www.sfgate.com/cgi-bin/article.cgi?f=/news/archive/2003/09/25/sta
te1538EDT7646.DTL


SAN ANTONIO (AP) --

Levi Strauss & Co. will close its last two U.S. plants by year end and lay off 800 workers, the maker of blue jeans said Thursday.

The company also will close its three facilities in Canada next March, leaving it with no plants in North America.

Workers at the two San Antonio plants sew and finish jeans. The company will contract with foreign manufacturing plants. The company said the moves were part of a strategy that began several years ago to shift away from owning and operating its own manufacturing plants.

"We're in a highly competitive industry where few apparel brands own and operate manufacturing facilities in North America," said chief executive officer Phil Marineau. "In fact, we are one of the last companies to do so."

Marineau said the company must focus on product design, marketing and retailing.

The San Antonio sewing plant employs 550 people, and 250 workers run the finishing plant. Levi Strauss spokesman Katie Otto said they will close by the end of the year.

Otto told the San Antonio Express-News that the company is negotiating with the Union of Needletrades Industrial and Textile Employees over severance packages. She said the company will spend $700,000 on grants to provide the employees with help in writing resumes and searching for new jobs.

Levi plants once dotted South Texas from San Angelo to the Rio Grande Valley. But for years Levi Strauss and other clothing makers have been shutting down U.S. plants and moving production to other countries with cheaper labor.

The Canadian plants to close are two sewing plants in Edmonton, Alberta, and Stoney Creek, Ontario, and a finishing center in Brantford, Ontario. The closings will leave 1,180 employees without jobs.

San Francisco-based Levi Strauss just turned 150 years old. It became one of America's iconic brands in the 1950s and '60s, as its jeans became a wardrobe staple of baby boomers.

The company, however, has struggled in recent years to connect with younger consumers. Sales peaked at $7.1 billion in 1996 but have fallen for six straight years to $4.1 billion and got off to a slow start this year.

The company hopes to restore sales by offering its first discount jeans line.

Levi is also the subject of a lawsuit by two former tax-department executives who say the company exaggerated its profits. Marineau has denied the


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