Hanesbrands to cut 8,100 jobs, add production in Asia

Apparel maker Hanesbrands hbi said Wednesday it will close nine plants across five countries and cut about 12% of its work force as it restructures its operations in order to cut costs.

The moves will eliminate the jobs of about 8,100 workers in the U.S. and Central America, while the company plans to add 2,000 jobs in Asia. Hanes has about 50,000 employees in 25 countries.

The maker of Hanes and Champion apparel said it is expanding production in Asia and consolidating into fewer and larger plants in lower-cost countries.

"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," said Hanesbrands Chief Executive Richard A. Noll in a statement.

The moves will cost $76 million, with about two-thirds of that recorded in the third quarter of 2008.

Since it was spun off from food maker Sara Lee in 2006, Hanesbrands has focused on restructuring its business, cutting jobs, closing plants and distribution centers, and moving production to sites in Asia and Central America.

With the latest restructuring costs, Hanesbrands says it has now taken about $204 million of the $250 million in such charges it expects to incur in the three years following its spinoff.

As part of the current restructuring the company plans to close seven plants this year. Those include sewing plants in El Salvador, Honduras and Costa Rica, as well as two yarn plants in Eden, N.C. and Gastonia, N.C., a knit-fabric textile plant in Forest City, N.C., and an inventory storage warehouse in Rockingham, N.C.

By the end of next summer, it will close a sewing plant in Mexico and its last large knit-fabric textile plant in the U.S., located in Eden.

Textile production from the plants closed will be absorbed into existing plants in Central America. Most of the sewing production from Central American plants that are closing will be moved to the company's Vietnam and Thailand plants. Hanesbrands expects to increase its work force in Asia from 4,000 today to 6,000 by the end of 2008.

The company is also building a textile fabric plant in Nanjing, China, which is expected to begin to ramp up production in 2009 to supply fabric to the company's expanding Asian sewing network.

Hanesbrands shares fell 10 cents to $23.73 midday trading.

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