Nobody's Going To Like Sara Lee

The textiles and clothing industry in the United States is being massively transformed and Americans, except those that work in the industry, are generally not aware that it is happening. The cause of the transformation can be summed up in one word - China.

Since joining the World Trade Organization (WTO) in 2001, the world's largest untapped labor pool, China, has been patiently awaiting the elimination of all quotas and tariffs on textile and clothing imports to the world's largest market, the United States. In theory, trade restrictions are removed with WTO membership. However, since the immediate importation of Chinese textiles and clothing in 2001 would have devastated American competition, safeguards were imposed in the form of quotas and tariffs to allow time for the U.S. industry to adjust. Those safeguards are scheduled to expire at the end of this year.

To effectively compete in the textiles and clothing market with no restrictions on Chinese imports, American executives must make dramatic changes in their business methods and strategies. Without changes, a company may fail. Yet, even with a revised corporate vision, there's no guarantee of success. The right changes must be made. Unfortunately, restructuring is usually discomforting to the workforce. Dramatic restructuring hurts.

As an example, a planned transformation was announced yesterday by Sara Lee Branded Apparel, a division of Chicago-based Sara Lee Corp. The company plans to lay off 3,825 workers and close five plants by the end of the year to consolidate production of intimates, sportswear, and underwear. Plants will be closed in Puerto Rico, Honduras, and Mexico, and production will be scaled down at a plant in Asheboro, N.C. Additionally, the headquarters in Winston-Salem will eliminate 150 jobs. Via a news release, the moves are explained:

"Whenever decisions affect employees' positions, they are made with careful consideration," said Lee A. Chaden, chief executive of Sara Lee Branded Apparel. "It is imperative, however, that we redeploy resources to maintain and enhance our long-term competitive position."

And, it's largely being done because trade restrictions on Chinese imports cease at year's end.

There can be no doubt that the restructuring of Sara Lee Branded Apparel is going to be painful, but the company has no other choice if they are going to survive in the marketplace. The loss of 3,825 jobs will negatively impact families and communities to a great degree, but it will help more than 50,000 workers to remain employed by the company worldwide.