Hanes Up On Move To Cheaper Labor Markets

The Stalwart submits: Thursday morning I saw the news that Hanes (HBI) is planning to move 5300 jobs to lower cost markets. Typical? Sort of:

The underwear and apparel maker said Wednesday it will close plants affecting nearly 5,000 employees, mostly in Mexico and the Dominican Republic. Positions in Canada, the United States and Puerto Rico also will be eliminated.

Going forward, the company will open up more plants in lower-cost South American and Asian countries. The stock is up on the news, because Wall Street, of course loves the idea:

"The math works," Morgan Stanley analyst Brian McGough wrote in a research note. "This is completely in line with the longer-term plan to right-size the cost structure of this business."

Hey Brian, did you know that the word gullible isn't in the dictionary?

What are we to make of any company that finds the Dominican Republic labor market too expensive? According to the CIA, the GDP per capita is about $8,400 in that country. And seeing as the company seems set on jumping on whatever country has the lowest labor costs, how long can we expect it to stay in the countries that it's going to? How long before the next round of labor cuts (and attendant "one-time" charges)?

Look, none of this rant is motivated by any bleeding heart or anti-globalization sympathies. It's never nice when someone loses their job, but that's not my main beef. I'm just wondering why people would think that the company is exhibiting sound practices by getting on this treadmill, rather than, say, pursuing more efficient industrial practices.

HBI 6-mo. chart:

Disclosure: Given the runup in shares, I may take out a small, speculative short position in the company. If nothing else, this will force me to pay attention to it and test my sense that Wall Street's love of moves like this is misguided.

Comments

[ouvriers cd...:]

Responsibles of the Hanes brands,
The comitee of workers of CD Apparel, at building #31, parc industrial (sonapi) HAITI joins their lawer, Jorice Oremil to greet the differences national organization and international for their help and to their enterprise fight by the said workers realize to damages.
Note that the boss of CD Apparel Frantz Pilorge came in Haiti after some meetings with the leaders responsible of Hanes and he has made the workers know that the bosses of Hanes,such as : Richard noll, Gerald evens,Micheal Jordand ………
Are vampires who don’t cease to exploit the workers around the word.
Speaking of Haiti he make understand that the Haitians workers are victims of racial discrimination. This enterprise “CD Apparel” has been congratulated by the same leaders for its efficiency and it’s products without any others .
The Haitians bosses put themselves to the bosses of Hanes side to exploit more the poor Haitian workers .
Lots of companies around the wold have been compensated with discussion such as:
Dominican Republic :3millions dollars us
Porto-Rico =$18.000000 US
Mexico :=$ 27.000000US
Canada : big millions
USA : big millions
And Haitians workers suffer until now and the workers of this company are left to their own devices.
These workers can’t send their children to school , pay the rent not to say sanitary cares about fity thousand (50000) workers arrange themselves already for a strike which aims at two objectives:
1-Ask Hanes Brands to compensate the workers of CD Apparel
2-Ask the Haitian parliamentaries to note the law on minimum wage.
We, workers of the cd apparel let us learn that some bosses of the company Hanes Brands such as: Richard Noll, Gerard Evens, Jorge Oliva from WRAP and others ally themselves with the haitians employers to know: the Bakers, the Apaids, and Richard Coles to prevent to the employees of CD Apparel to obtain their damages and repairs as Hanes does it always for the others plants.For your information, we say that :
Haitian government for the coming days will arrest certain other bosses for corruption and contreband , after the brandt , the Boulos , it will be the Baker’s and Richard Coles, the Apaid’s , Madsen, Acra, Meuz turn . This is the reason we want to ask the persons in charge of hanes to divorce with these employers in order not to to be considered as accomplice in the file of the workers of cd apparel because the state haitian [René Preval] will follow: authors and accomplices in this so national one as international file if hanes refuses, she will be considered as social danger for all the workers of the entire world.
We are waiting fo Hanes investigation in Haiti to release this crisis.
We write the American congress to take action to close the Hanes enterprises.
The workers of CD Apparel have been waiting and expecting that the leaders of Hanes will not shut the door in their face and will satisfy the workes

2008 Sep 01 02:57 PM

[ouvriers cd...:]

HERE THE PICTURE OF FRANTZ J. PILORGE AND REGINAL J. BAKER AT VISA LODGE IN A FACE TO FACE WITH THE ATTORNEY OF THE WORKERS VICTIMS INTO SONAPI BUILDING # 31 AFTER THE BAD CLOSURE AND A NASTY RESILIATION OF CD APPAREL'S PLANT BY THE LEADERS OF SARALEE / HANESBRANDS[HBI] WITH THE COMPLICITY OF FRANTZ J. PILORGE AND THE ONE OF THE TOWNFOLK OG HIS CLASS ON MAI 4, 2007 WHERE HE HAS ASSUMED TO COMPENSATE AND REPAIR THE POOR EMPLOYEES VICTIMS FOR 4 YEARS BY HIM. HE IS AWARE THAT USED THE WORKERS VERY NASTY WITHOUT THEIR WILL AFTER SEVERAL YEARS OF MISERY , EXPLOITATION , DISCRIMINATION, INJUSTICE,INTIMIDATION AND THREATS ON THEIR PERSON . HE HAS TOOK OVER ON THE WORKERS MONEY FOR ONA AND KEEP THIS MONEY IN POCKET . THE WORSE THAT HE DID: IT'S THE BAD PUSHING OF THE POOR WORKERS IN THE PARK SONAPI IN THE DEMONSTRATION AGAINST : MINUSTHA, RICHARD COLES AND ANDY APAID JUNIOR JUST TO TREAT HIS OWN MATTER . IT'S FOR THIS REASON HE TAKES CONSCIOUSNESS TO DAMAGE AND REPAIR THE 500 VICTIMS CAUSE HE WAS USING BADLY THOSE UNHAPPY WORKERS FOR HIM AND FOR HANES APPAREL THAT'S HE SAID IN THE HOTEL WITH THE LAWER OF THE VICTIMS . PLEASE NOTE THAT WE KEEP PROOF FOR ALL INFO THAT WE SHOW ... VICTORY AND JUSTICE FOR THE WORKERS !!!

2008 Oct 27 03:35 PM