American Denim
September 26, 2003 5:06 AM   Subscribe

Levi Strauss to Shut Last Plants in U.S. Levi Strauss & Co. said 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. And Cone Mills Corp., the world's largest denim fabric maker, has filed for Chapter 11 bankruptcy protection and accepted a letter of intent from W.L. Ross & Co to purchase all of its assets in a $90 million transaction (more inside)
posted by matteo (18 comments total)

 
Levi's is privately held, with majority ownership in the hands of the Haas family. The company has struggled during six years of declining sales to pay down debt that now surpasses $2 billion, including $1.6 billion of publicly traded debt.
In 1950, 1.2 million Americans were employed in apparel manufacturing. By 2001, that figure had fallen to 566,000. In the same time span, the U.S. population almost doubled. Jobs went out of the country, and finished products came in. In 1989, the U.S. imported $24.5 billion in apparel; in 2001, $63.8 billion.
Levi Strauss will discontinue its Canadian operations in March 2004, erasing 1,190 jobs at three plants in Alberta and Ontario. The 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.
A little history: "Once in Saipan, the workers were housed in fenced and guarded barracks, and were escorted to work in factories guarded by security personnel. The workers were required to surrender their passports to the factory owners upon arrival in Saipan. They worked seven days a week for less than the minimum wage, with no overtime pay, and lived and worked in unhealthy and unsafe conditions" (ITGLWF Newsletter, 1992: 12).
posted by matteo at 5:09 AM on September 26, 2003


If you buy (quite expensive) 501's in Europe, they're usually made in Romania

posted by matteo at 5:12 AM on September 26, 2003


Levi's US employees earn about US$9 to US$14 per hour, compared with hourly wages below US$1 at suppliers in low-cost countries.
posted by matteo at 5:15 AM on September 26, 2003


Just as a reminder: Working in apparel manufacturing in 1960 sucked ass.
posted by Space Coyote at 5:15 AM on September 26, 2003


I've worn Levis my entire life but have bought my last pair. The quality has been crap for years now—they disintegrate after three washings. Most of their line seems inexplicably targeted toward a small youthful urban minority that likes to wear billowing clown pants and pretend that they are rap stars. Seems it would be difficult to make a profit catering to such a minor niche, and indeed, Levis has suffered tremendous losses in recent years. This move seems unlikely to address the quality issue. Their management must be appallingly bad to destroy a company so thoroughly engrained in the public perception and lifestyle.
posted by rushmc at 5:44 AM on September 26, 2003


Levi has struggled for years to reverse a sales slide that began when the company's jeans lost favor among fashion-conscious younger shoppers, who buy most of the denim sold. Ultimately, the company found its products sandwiched between lower-cost alternatives sold by Sears, Roebuck & Co. and J.C. Penney Co. and high-priced options from trend-setting designers such as Tommy Hilfiger Corp. and Calvin Klein. Even more expensive choices sprang up, including brands such as Diesel and Seven that sell for more than $100.

So is Levi's downfall's cause economics or ethics, I'm going with ethics. Levi jeans sell themselves, quality, USA & rebellion youth. My international friends could never get enough Levi brand clothes while here in the states. Add in my opinion they over wore them too. So why going broke if such an international hit then? Also from a tourist perspective, not American made will hurt the brand too.

urban minority that likes to wear billowing clown pants
Agree. Quit wearing Levi's jeans before that "style" but it was because they were uncomfortable for me while sitting. Did they ever make available an "european cut" in the US? Also remember Germans wearing their jeans styled "urban", big belts baggy way before it was "in" during the 80's too.
posted by thomcatspike at 6:07 AM on September 26, 2003


Very good previous article/discussion on Levi's ethics vs marketplace competitiveness.
posted by Shane at 6:17 AM on September 26, 2003


Very good previous article...
Hmph, dead link to the LATimes and I can't find a cache...

posted by Shane at 6:25 AM on September 26, 2003


The business reporter on the national news station said Levi's was trapped between the stylish high-priced designer jeans and the lower-end budget jeans. I thought, heh, that's what I've thought for five years.

Levi's bankruptcy is a bit like Eaton's six years ago. Yes, they're big bad corporations trying to separate you from your money, but they'd been around for over a century and had inched their way into, well, the national consciousness, the contemporary mythology or whatever high-falutin' book-larnin' term you prefer.
posted by philfromhavelock at 7:07 AM on September 26, 2003


Also, their sizes have fluctuated madly. Granted, I may have gained an inch or two in the waist since high school, but I have a hard time accepting that my legs have lost five inches, as the size Levis I have to buy would indicate.
posted by rushmc at 7:16 AM on September 26, 2003


Levi is not going bankrupt (a denim manufacturer is, however) - this is just another example of how cheap overseas labor has taken American companies out of America, and how companies care more for their bottom line than for anything else.

Companies come to America to make their profit margin. Clothing, pharmaceuticals, foodstuffs - we pay much more than most of the world for the same items, because we can. Other clothing manufacturers have taken advantage of the inequity in the global system to turn a buck - this isn't exactly news. Levi has just given in and joined the same system everyone else is using to make a ridiculously high profit. It's hard to remain ethical while drowning.
posted by FormlessOne at 7:36 AM on September 26, 2003


It's about time we sent the dirty French and their America-hating structural functionalist pants on their way.
posted by Ignatius J. Reilly at 9:47 AM on September 26, 2003


The Haas family has been the most significant source of philanthropic support for San Franciscans for almost a century. As go their fortunes, so go the fortunes of dozens of non-profits, parks, schools, universities and causes they support. I hope they are able to bring their label back to life.

But it's curious to me that both San Francisco jean companies (GAP and Levi's) are gasping for air. What is everyone wearing? Hmm?
posted by pejamo at 10:15 AM on September 26, 2003


Well...I would boycott Levi's, if I had worn them anytime after I developed boobs and hips...but, I'm shaped like a woman from the 1950's....so Levi's haven't been an option for the last 20 years.

My husband, on the other hand, is going to be very depressed to hear this news. He loves (loved?) Levi's.
posted by dejah420 at 5:00 PM on September 26, 2003


What, would Levi's be behaving more ethically if the article read "Levi's recently decided to shut down it's Vietnamese manufacturing facilities to relocate all work back to the US; this move has put 5,000 Vietnamese citizens out of work"?
posted by jaek at 7:09 PM on September 26, 2003


Hmm, I was about to buy some levi's, because they were a quality product made without the use of sweatshop labor, and appeared to actually treat their workers well.

So much for that idea.

Contrasting with the post a while ago on them, It's kind of sad to see Levi forced to abandon their ethics to compete, even if it is their own fault.
posted by Dillonlikescookies at 9:07 PM on September 26, 2003


Americans (especially businessmen and lawyers) have always had a lack of appreciation for their short historical heritage. And besides if the owners of Levi's need eight homes, private planes, and "only the best", then so be it.
posted by kyleebrock at 9:12 AM on September 27, 2003


That's a shame about Levi's. They used to be THE jeans maker, but they were eaten alive by competing labels and marketing practices. It's actually sad to see one of the last great American clothing labels shut down their domestic manufacturing operations.

Who can we now turn to for ethical clothing production and standards?
posted by Down10 at 2:55 PM on September 27, 2003


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