Chinese Condoms Could Mean Layoffs for U.S. Workers

March 27, 2009— -- At a time when America is bleeding jobs, an Alabama condom factory has lost its U.S. government contract to an overseas manufacturer and may be forced to close, leaving its workers with few prospects..

For years, Alatech Healthcare Products, based in Dothan, Ala., has relied on its contract with the U.S. Agency for International Development, which provides condoms to foreign governments and nonprofit entities, to fight HIV and AIDS and assist in family planning.

While USAID has pointed to quality and reliability issues as the reason it's decided to stop using Alatech Healthcare condoms, Alatech's president said the government was only interested in getting its condoms for the cheapest price.

And because, at 5 cents per condom, Alatech can't compete with the overseas prices of about 2 cents each, the company will likely be forced to shut its doors and fire its workers, some of whom have worked in the industry for decades.

That includes Sam Turner, Alatech's director of operations. He's worked in Alatech's factory in nearby Eufala since 2001, a year after the company opened, but has worked with numerous other condom manufacturers, most of whom have since closed or moved overseas.

"I've been making condoms for USAID since I was 19 years old," he told ABCNews.com.

Turner said he'll oversee the last package of USAID-ordered condoms sometime in May but faces an uncertain future after that. His wife had a stroke several years ago at age 40 and is unable to work. His job provides her health insurance. His daughter and two grandchildren also live with them.

Many other businesses in the area have dried up and at 53, Turner says he's too young for early retirement. There are a few minimum-wage job opportunities, but nothing that would match his $60,000 annual salary at Alatech.

"There's not a lot of people that want to hire a 53-year-old broken-down man right now," he said. "I really don't have a game plan."

Turner said he was shocked that USAID had chosen not to renew its contract with Alatech and said he expected better of the U.S. government than to take away American jobs and give them to overseas workers.

Alatech CEO Larry Povlacs, who has been in the industry for 40 years, said southern Alabama used to be a hub for latex manufacturing, mostly condoms. Now there's only two left, Alatech and Church & Dwight Co. Inc., which manufactures the Trojan brand.

While Alatech does manufacture a small amount of latex gloves and its own Champion brand of condoms, USAID is "our mainstay," he said. "Without them it would be difficult to keep going."

Though Alatech declined to disclose its profits, the value of its 2008 USAID contract was more than $6.7 million.