Levi's, the brand synonymous with blue jeans the world over, will no longer be manufactured in the United States.
Signalling the end of an era in US manufacturing, Levi Strauss & Co shut its last two sewing and finishing plants in the United States on Thursday.
The San Francisco-based famed jeans-maker has decided to outsource production to China and other countries where labour costs are much lower than those in the US.
The company has gradually been shifting its manufacturing activity to overseas contractors to cut costs. Levi's financial troubles have resulted from plummeting sales and cutthroat competition in the clothing market.
The company announced its intentions of shutting down its two San Antonio plants in September 2003, saying that it is 'shifting away from owned and operated manufacturing.' It had also said that it would outsource its manufacturing to sites across the Third World nations.
Over 4 million pairs of jeans were manufactured annually at these plants, with workers earning an average wage of $10 to $12 per hour. Some 800-odd workers collected their last pay packet on Thursday at the two plants, and are now jobless, reported the US media.
The company will shut down its three remaining plants in Canada too later this year. The famed jeans-maker had 63 manufacturing plants in the US, just two decades ago, and employed thousands of American workers.
The company employed over 37,000 workers globally in 1996. The figure has since then dropped to about 12,000 in December 2003. Half of these are said to be in the US. It had registered sales of $4.1 billion in 2002, while its sales are expected to be about 3 per cent lower than those in 2003. The sales figures for 2003 have not yet been made public. It had sales of $7.1 billion in 1996.
The media quoted Levi Strauss spokesman Jeff Beckman as saying that the 150-year-old company was making a delayed but unavoidable business decision.
"We tried to do our best to maintain manufacturing in the United States, but we have to be competitive to survive as a company," he was quoted as saying.
The company's headquarters will continue to remain in San Francisco, and the company will base its design and sales staffs in the United States, along with some distribution centers, Beckman was quoted as saying.
"We're still an American brand, but we're also a brand and a company whose products have been adopted by consumers around the world," Beckman said. "We have to operate as a global company."