Textile firms will fire between 1,000 and 1,500 workers this year, a leading industry executive predicted yesterday.
Ramzi Gabbay, CEO of Offis Textile and chairman of the Manufacturers Association's textile and fashion division, said that the dismissals will occur despite the fact that 2005 is expected to be a very good year for the industry.
And he warned that even more people could be dismissed this year if plans to resume cooperation with sewing factories in the West Bank and Gaza come to fruition.
Gabbay noted that some 60 percent of Israel's textile companies moved manufacturing operations overseas last year, to places with lower labor costs, and another 30 percent plan to do so this year. Largely because of these moves, the industry shed 1,200 workers last year.
Gabbay expects the trend of moving textile plants to Egypt, Jordan and the Palestinian Authority to accelerate due to two recent developments: A recently signed American-Israeli-Egyptian trade agreement, which allows Egyptian textiles to be exported duty free to the U.S. if they contain a certain amount of Israeli content, and a EU plan to eliminate customs duties on goods produced through joint ventures between Israel and its neighbors.
In a development underscoring Gabbay's words, Haaretz learned yesterday that Tefron, a leading Israeli textile company, is currently considering moving its manufacturing operations overseas. If it does, it would lead to the dismissal of most of its 1,500 local workers.
As a first step in this process, sources close to the company said, Tefron plans to fire some 400 temporary workers from its Gush Segev plant, which manufactures swimsuits, in the near future. Many of Tefron's workers are seasonal employees, and the bulk of those currently slated for dismissal were hired in the latter half of 2004. The company, traded on Nasdaq, is owned by the FIMI fund, Mivtach Shamir and the Wolfson family.
Just last month, underwear manufacturer Delta Galil, which is owned by Dov Lautman, shut down its last sewing factory in Israel because of a decline in profits. The Carmiel plant employed 150 workers, of which 137 were fired.
In total, the local textile industry has shed 22,800 workers over the last decade. "Due to the relatively high cost of labor in Israel, there is no chance of continuing to employ sewing factory workers here, unless the government quickly begins implementing a program to subsidize employees of sewing plants," Gabbay concluded.
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