2 more garment factories shutting down

Local st-Monday, November 12, 2007 By Ferdie de la TorreReporter

Two more garment manufacturers-L&S Apparel Inc. and Jin Apparel Inc.-are shutting down operations on Saipan by next month and in March 2008.Saipan Tribune learned that L&S Apparel and Jin Apparel submitted on Nov. 2 and Oct. 31 respectively their formal notice to the Department of Labor about their intention to close and suspend business operations.The closures will affect hundreds of alien workers, mostly Chinese, and some locals and Filipinos.L&S Apparel, through its manager Jung Ryul Lee, said the company will cease operations effective Dec. 31, 2007.The factors cited by Lee as reasons were adverse economic conditions brought by the application of the federal minimum wage in the CNMI, the competition from China and other Asian countries, increased costs of conducting business in the Commonwealth, and lack of orders.Jin Apparel, through counsel Linn H. Asper, said its operations on the island will be suspended from Dec. 31, 2007 until March 31, 2008. Asper, however, pointed out that a final decision on the future of the factory will be announced in 2008.Asper said the reasons for suspension of operations are the recent changes in rules issued by the World Trade Organization and changes in the law regarding payment of wages to employees.In his letter addressed to the L&S employees, Lee said by Dec. 31 all employment will be terminated except as necessary to close the factory and that in the meantime, there will be no renewals of employees' contract.Lee said for those not renewed or terminated and who have alien-employment contracts with L&S and who wish to return home, the company will provide transportation to their country.For those nonresident and resident employees who intend to seek other employment in the CNMI, the company will assist them if possible in finding new employment, Lee said.“I deeply regret this action and any hardship it causes. The company has no choice. The company has appreciated your employment,” the manager said.He appealed to all employees to continue working until the closure in order for them earn wages and for the company to fulfill its orders.“For those not to be renewed prior to closure, I urge each of you to continue working until the end of your contract with the company,” Lee said.With respect to the San Vicente-based Jin Apparel, Asper told Labor acting director James Ulloa that the company employs a number of nonresident workers who are under Labor-approved employment contracts.Asper said Jin Apparel intends to terminate the employment of these employees and repatriate them to their countries of origin in compliance with their respective contracts.“We wish to proceed with this process in an orderly manner,” Asper said.L&S and Jin Apparel will be the 16th and 17th garment factory to close down on Saipan since January 2005, when the World Trade Organization lifted trade quotas.According to Labor records, with the closure of L&S and Jin Apparel there are 19 garment factories left on the island.On April 7 and July 2, Grace International and Top Fashion stopped operations respectively due to dramatic decline in garment manufacturing business and orders.The liberalization of trade rules has allowed Third World countries to export their garments to the U.S. As a result, many garment factories in the CNMI shutdown operations. CNMI's garment industry used to contribute some $60 million in direct taxes a year to the local government. For user fee alone, which represents 3.7 percent of total industry sales, the government used to collect an average of $30 million a year.