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Levi, an American Icon, to Shut Last Plants in U.S.

September 26, 2003|Leslie Earnest | Times Staff Writer

Levi Strauss & Co., maker of a jeans brand so all-American that it became ingrained in the nation's identity, said Thursday that it would close the last of its North American manufacturing plants, laying off almost 2,000 workers.

San Francisco-based Levi, which is celebrating its 150th anniversary this year, said it would shutter two plants in San Antonio by the end of the year, displacing 800 workers there and marking the end of its U.S. manufacturing operations. The clothing firm will discontinue its Canadian operations in March, erasing 1,190 jobs at three plants in Alberta and Ontario.

The venerable company has been shifting its production overseas during the last two decades, and today uses about 500 contractors to produce its apparel in 50 countries, including Mexico, China and Bangladesh. Still, switching off the lights at its remaining U.S. factories symbolizes the struggle of an industry that has been battered by the forces of globalization.

Levi's announcement heaps more pressure on the Bush administration and Congress to do something to help U.S. textile and apparel manufacturers, which say they have lost 2.5 million domestic jobs in recent years.

On Thursday, several manufacturers and labor leaders announced the formation of a group called the Free Trade for America Coalition to lobby for changes in trade policy. That followed the bankruptcy filing Wednesday by Cone Mills Corp. of Greensboro, N.C., the largest U.S. denim-fabric maker.

"There's a lot of saber rattling going on right now on trade," said Kevin Burke, president of the American Apparel and Footwear Assn., an industry trade group. "Politicians have to answer to constituents who are wondering where the jobs are going."

Last year, 96% of the apparel purchased in the U.S. was made in other countries, up from 93% in 2001, according to Burke's group. Through June of this year, U.S. apparel imports increased 17%, with much of the clothing coming from Mexico, Central America and China.

The shrinking base of U.S. apparel factory jobs is apparent in Southern California. Clothing makers, which in 1996 employed nearly 104,000 workers in Los Angeles County, accounted for 64,000 jobs as of July.

Levi, for most of its long history, has stood apart from other apparel makers because few, if any, brands have been as linked to the American landscape. Levi's has been a symbol of a boundless American spirit since prospectors rushed into California 150 years ago and discovered not only gold but also newfangled work pants reinforced with copper rivets.

"As the miners went into the Sierra Nevada to pan for gold, Levi stood the test," said Peter Sealey, adjunct professor of marketing at UC Berkeley and former marketing head of Coca-Cola Co. "That was what created the whole image and history of the company."

The company also became synonymous with ethical business practices. In the 1950s, Levi stood apart from other factory owners when it integrated the workforce at its Virginia plant, refusing to create separate work spaces or accommodations for black employees, despite protests from the local white establishment.

When the privately held jeans maker started to manufacture some of its products overseas, it established strict anti-sweatshop guidelines with its contractors, which the company says it continues to enforce.

Closing down its remaining factories is the end of a long process for the parent of the Levi's and Dockers brands. In 1996 Levi hit an all-time record of $7.1 billion in sales and employed 37,000 employees worldwide. But since then, the company has seen its business slide.

Over the last seven years, Levi has closed dozens of plants in North America and Europe and slashed thousands of jobs as it struggled to reorganize. Just two weeks ago, the company said it was laying off 350 U.S. workers, mostly at its headquarters.

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

The jobs lost at Levi plants in North America are likely to shift to Latin America and Asia, the company said. Levi is simply adapting to a reality that many other U.S. apparel makers have had to face, said Burke of the apparel trade group.

"What you're seeing with Levi is just the economic reality of our industry," Burke said. "American consumers, when shopping for these products look at price and quality, and they don't necessarily look to where the product is made."

To many consumers, Levi has been a symbol of "confidence, sex, youth, rebellion, freedom, originality and authenticity," said Alex Wipperfuth, partner at Plan B, a San Francisco marketing firm.

"Those are the dimensions of Americana, according to Levi," he said. "I think the key issue is, will any of those fall away once people realize Levi is not produced in the U.S. anymore?"

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