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Israel:Jobs losses predicted for Israeli textile sector in 2005 |
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2005-3-28
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Despite the year likely to be a “very good year” for textile firms, the country is expected to lose between 1000-1500 workers this year.
This was predicted by Ramzi Gabbay, CEO of Offis Textile and Chairman of the Manufacturers Association''s textile and fashion division, who feared more losses if plans to resume cooperation with sewing factories in the West Bank and Gaza, fructify.
He about 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. Such moves resulted in the industry shed 1,200 workers last year.
Gabbay expects trend of textile plants moving to Egypt, Jordan and the Palestinian Authority to gather pace because of two recent developments: A recently signed American-Israeli-Egyptian trade agreement, which allows Egyptian textiles with Israeli content to be exported duty free to the U.S., and a EU plan to eliminate customs duties on goods produced through joint ventures between Israel and its neighbors.
Media yesterday reported that a leading Israeli textile company Tefron is 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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