End of Era: Delta Closes Last Underwear Factory in Israel

The Delta Galil company, controlled by Dov Lautman, yesterday closed its last Israeli textile plant producing underwear. The plant in Karmiel had employed 150 workers, some new immigrants and others residents of Arab and Druze villages. In accordance with an agreement signed between Delta's management and the Histadrut labor federation, 137 workers were let go yesterday.

The plant's closure came as no surprise to the textile industry. Delta's net profit was down 17 percent in the last quarter of 2004 compared to the third quarter, as a result of its falling performance in the mass market and a loss resulting from a price-cutting arrangement with the JC Penny chain. Delta issued a profit warning for the fourth quarter at the beginning of January 2005.

The process of closing the Karmiel factory began three weeks ago when Delta's management sent workers on vacation, saying it needed to substantially reduce output. When the vacation continued, some of the workers appealed for help to the Histadrut's chair for the Karmiel district, Shula Cohen, since they had used up all of their vacation days. In the meantime, the Histadrut had received notice of Delta's intention to close the factory, and negotiations began over increased compensation for the women who would be fired.

In recent years, Delta's Karmiel factory had taken on workers laid off by sewing factories in Nazareth, Shfaram, and Julis in the wake of the crisis in the Israeli textile industry, which has been losing out to competition from the Third World.

The severance agreement signed between the Histadrut representative and Imad Telhami, director of Delta Galil Industries' Europe Division, stipulated that 13 workers who are aged 57 or more and have at least 10 years on the job, would not be fired, but would be transferred to another Delta factory in Karmiel that develops new products and currently employs 50 workers.

The workers let go will receive severance pay at a rate of a least 150 percent of their legal entitlement if they worked there more than 5 years. Workers between the ages of 50-55 will receive an additional bonus of NIS 3,000, and workers over 55 will receive a NIS 6,000 bonus.

Cohen said yesterday that, "This is a difficult day for the textile industry, which is gradually reducing its activity in Israel and transferring product lines to neighboring countries or to Southeast Asia. Despite the worrying signs of the past six months, we believed that Delta would operate the sewing factory in Karmiel for many years to come. Our hope is that the government will encourage bringing factories and alternative employment to the Galilee, where unemployment exceeds the average."

Lautman said that Delta employs 2,800 workers in five factories in Israel, all in Karmiel. The remaining factories are not sewing factories, but rather manufacture fabrics and socks, and design and dye fabrics and clothing. Delta employs 7,000 workers in sewing factories in Egypt, Jordan, Honduras, Bulgaria and Thailand, and in a dozen factories and workshops that serve as subcontractors for other factories. "The era of sewing workers in Israel and the Western world has ended," he said.