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North American Integration and Partnership

December 2, 2016

Stephen Sullivan is an International Trade Specialist in the Office of North America. Gina Bento is a Commerical Specialist in the Office of North America

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In a climate where many believe that companies are leaving the U.S. to produce goods where labor is less expensive, one Canadian company has shown how much it values U.S. labor and its critical North American supply chain.  Gildan Activewear Inc. is a manufacturer of T-shirts, fleece, sports shirts, socks, and underwear that invested and continues to invest in production based in the United States.

Founded in 1984, Gildan is headquartered in Montreal, Canada. With a number of different acquisitions over the past few years, Gildan has invested hundreds of millions of dollars into U.S.-based facilities as it pursues a decentralized manufacturing strategy, taking advantage of supply chains that allow a smoother flow of goods between suppliers, producers, and retailers.

Many fashion and apparel companies moved production to China upon its accession to the World Trade Organization in 2001. Instead of following the trend, Gildan utilized the strength of high-standard bilateral and regional trade agreements closer to home. Since Gildan’s largest market is the U.S., having factories close to and within the U.S. means that orders can be fulfilled quicker than those companies that have to ship products from locations like China.

Since 2000, Gildan has invested more than $400 million in yarn spinning facilities in North Carolina and Georgia. Currently, Gildan has 2,600 full-time employees in the U.S., who earn an average of $32,270 (plus benefits) annually. By being savvy about import and export tariffs, and investments, Gildan is able to compete with T-shirts made in China, even though Gildan is paying more for labor costs.

This year, Gildan is acquiring American Apparel as it files for bankruptcy. The acquisition will save U.S. jobs and create revenue growth opportunities by leveraging Gildan’s extensive distribution networks to increase the brand’s penetration in the growing fashion basics segments of global markets. A dominant supporter of U.S. cotton production, Gildan purchases 25 percent of U.S. cotton.  With the imminent procurement of American Apparel, it will soon be possible for Gildan to manufacture a cotton product that is made entirely within the United States.

By choosing to invest in facilities within the North American supply chain, Gildan has saved jobs that would have been lost to company bankruptcy, and added more U.S. jobs by opening new factories. Upon completion of this new acquisition, Gildan will gain licenses to manufacture Under Armour®, Mossy Oak®, and New Balance® brands; all of which are American companies, increasing job opportunities for Americans.

Talk to your local specialist and receive in-depth advice on exporting, international sales, logistics, finance, and trade dispute resolutions.

 

 

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