The chances that Beefy T you're wearing was made in the USA are about to get slimmer.
Hanesbrands announced Wednesday that it's closing four of its plants in its home state of North Carolina, as well as three in Central America, as a cost-cutting measure.
In brief, the apparel company plans to lay off about 8,100 workers in four countries and to create about 2,000 new jobs at its sewing plants in Thailand and Vietnam. Giving a nod to the fact that outsourcing has become accepted practice in these tough economic times, Hanesbrands CEO Richard Noll said in a statement that the closures and layoffs are "a critical plank in our strategic efforts to reduce costs."
According to USA Today, the costs in question were incurred in 2006, when Hanes spun off from Sara Lee. While analysts lauded the move, saying the marriage of underwear and baked goods was about as comfortable as an ill-fitting thong, Hanesbrands took it in the shorts with $250 million in related charges. Since the company still has to cover about $46 million of these charges, Hanesbrands has more consolidation planned for the near future.
By the end of next summer, its last large knit-fabric textile plant in the U.S. will be shuttered, along with a sewing plant in Mexico. These closures will be balanced somewhat by the opening of a textile plant in China, which will supply fabric for workers throughout Asia. Investors reacted to the news by giving Hanesbrands' stock a slight wedgie: Shares fell 10 cents after Wednesday's announcement.
Take the first steps to building your portfolio.View Course »