ANOTHER SAIPAN GARMENT FACTORY SHUTS DOWN

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By Haidee V. Eugenio

SAIPAN, CNMI (Marianas Variety, Nov. 6) - Poong In (Saipan) Inc. is closing its factory in Saipan effective December 29, citing "global economic reasons and lack of garment production orders."

The garment factory’s closure will affect the employment of approximately 200 workers.

Poong In (Saipan) Inc. is the 11th garment factory on Saipan to shut down since January 2005 when the World Trade Organization liberalized trade rules that now allow Third World countries to export more of their cheap garment products to the U.S.

[PIR Editor’s note: Saipan garment industry sales posted a 24.6 percent or US$146 million drop in the first 10 months of fiscal year 2006 compared to the same period last year primarily due to the closure of 10 factories since January 2005.]

"I was shocked to learn that the company is closing that soon. We thought it would be in operation for at least two more years," a 38-year-old employee of Poong In said in an interview yesterday.

Richard W. Pierce, attorney for Poong In (Saipan) Inc., said only the Tanapag factory will close, and not the San Antonio factory.

"The San Antonio factory will remain open, and some employees from the Tanapag factory will be transferred there," he said, adding that employees were properly notified well ahead of the closure date.

Hyung Chul Kim, general manager of Poong In (Saipan) Inc., informed the company’s resident and nonresident employees through a written notice that Tanapag factory operations will be closing effective December 29, 2006 "due to global economic reasons and lack of garment production orders."

The October 27 notice, a copy of which was posted at the Tanapag factory’s main entrance, said that all nonresident workers will be provided with a one-way repatriation plane ticket back to their point of hire, and/or transfer relief for any on-island potential employment sanctioned by the Commonwealth of the Northern Mariana Islands Department of Labor’s secretary or his designee.

Kim added that all Poong In (Saipan) Inc. employees will be compensated for all hours performed.

"Lastly, thank you for all the service that you have rendered to our company and please consult the Personnel Office for final processing…Thank you for your understanding in this matter and good luck in your future endeavors," he said in the one-page notice.

Division of Labor Director Robert Magofna yesterday confirmed receipt of the notice from Poong In.

Md Nurul Islam, 33, a security guard for Poong In (Saipan) Inc., said he was initially skeptical of the factory’s closure until he heard it from the management.

"I was surprised. Other workers from China, they were crying when they learned about it," he said.

Employees interviewed yesterday said they have been paid their wages on time, and that about 37 employees will be transferred to the San Antonio factory.

The company manufactures ladies’ apparel for major retailers like Ann Klein, Jones New York and Kohl’s, according to employees.

Since January 2005, 10 factories have closed here. These include Mariana Fashions Inc. in San Antonio, Sako Corp. in San Antonio, La Mode (Saipan) Inc. in As Lito, Neo Fashion Inc. in San Antonio, Express Manufacturing in Puerto Rico, Winners Corp. 2 in Chalan Laulau, Hyunjin Saipan Inc. in Gualo Rai, American Pacific Textile in Tanapag, Hansae Saipan Inc. in Gualo Rai and Handsome (Saipan) Inc. in Tanapag.

Poong In will be the 11th factory to close due to the competition from Third World countries that pay their workers less than the Commonwealth of the Northern Mariana Islands’s minimum wage of US$3.05 an hour, which was last set in 1996.

Due to the factory closures, total garment industry sales reached only US$531 million in fiscal year 2006, a 24 percent or US$172 million drop from FY 2005. This is also far below the annual sales the Commonwealth of the Northern Mariana Islands garment industry enjoyed in its peak years of 1999 and 2000 which was over US$1 billion annually.

To help the remaining factories remain competitive, the Fitial administration continues to lobby Congress to amend Headnote 3(a) of the U.S. Tariff Code to allow Saipan factories to use more imported raw materials for their garment products.

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