Two months after it confirmed that it is bowing out of the poker industry, Tan Holdings Corp. yesterday dropped another bombshell\u2014the closure of its garment factory, Concorde Garment Manufacturing Inc., effective Feb. 6, 2007. The move will affect about 1,400 employees, mostly nonresident workers.<\/p>\n
The company cited substantial losses arising from the 2005 worldwide lifting of trade quotas, which dramatically diminished the local manufacturers\u2019 ability to compete globally.<\/p>\n
\u201cAfter approximately 23 years of business operations in the CNMI, Concorde\u2026regretfully announces that it will be closing its apparel facility on or about Feb. 6, 2007. The decision to close this pioneering operation is an extremely painful but necessary decision that the management has to take,\u201d said Concorde in a statement issued yesterday.<\/p>\n
Concorde, which began operations on Saipan in 1983, is one of the two biggest garment manufacturers on the island; the other leading company, UIC, is owned by businessman James Lin.<\/p>\n
Concorde attorney Steve Pixley said that since the World Trade Organization lifted quotas last year, the factory has taken numerous steps to remain competitive but it continued to sustain losses.<\/p>\n
He said Concorde has instituted an aggressive cost-cutting plan, which included a substantial reduction in workforce and a re-engineering of its facility in Lower Base, Saipan.<\/p>\n
\u201cThese steps were calculated to allow Concorde to continue business operations in the CNMI. Sadly, despite these aggressive measures, Concorde continues to sustain significant losses. Unfortunately, Concorde can no longer continue to absorb these losses,\u201d said the company.<\/p>\n
[B]Repatriation or transfer[\/B]<\/p>\n
Pixley said affected employees may choose to transfer within the CNMI or be repatriated to their countries.<\/p>\n
\u201cThey have that option. We are committed to assist the employees during this challenging time,\u201d said Pixley.<\/p>\n
Pixley said the company is also working closely with both the CNMI and U.S. government agencies \u201cto ensure that this closure is conducted as smoothly as possible and in full compliance with applicable law.\u201d<\/p>\n
He said all affected personnel, including managers, have been issued a 60-day notice of the closure.<\/p>\n
Concorde currently employs 1,400 workers, mostly nonresident workers from China. During its peak in the mid- to late-\u201990s, Concorde employed some 3,000 employees.<\/p>\n
[B]Millions in losses[\/B]<\/p>\n
Acting Gov. Timothy P. Villagomez described the factory\u2019s closure as another blow to the sputtering economy. <\/p>\n
\u201cThis represents another big blow to the CNMI\u2019s economy,\u201d said Villagomez, citing several adverse economic effects, including unemployment, diminished fee and tax collections, and a reduced multiplier effect throughout the local economy. <\/p>\n
He expressed concern for the employment prospects of Concorde\u2019s employees next year. \u201cThis closure will hurt families and cause a contraction in our local economy, resulting in less consumer spending on goods and services.\u201d <\/p>\n
Villagomez also noted the reduction in fee and revenue collections the factory closure would cause. \u201cWhen Concorde shuts down, we will no longer receive user fees from the factory, and our Labor Department would lose about $300,000 from the annual Labor application fees,\u201d he said. <\/p>\n
According to Villagomez, businesses providing goods and services to the Concorde factory would also suffer income losses and local banks might experience reduced deposits as a result of the factory closure. <\/p>\n
The government estimates that Concorde’s closure may compute to losses of $17.6 million in gross sales by other CNMI businesses, a loss of 700 jobs in the private and public sector, and a loss of $11.8 million in wages paid to other employees in other CNMI businesses and government. The total loss to the CNMI could be $12.73 million in lost taxes and fees, including business gross revenue taxes from other businesses and local sales.<\/p>\n
[B]A big shock[\/B]<\/p>\n
Saipan Chamber of Commerce president Charles V. Cepeda said he had thought that Concorde would be able to survive the hard economic times.<\/p>\n
\u201cI was shocked. I thought, being one of the bigger factories, it would stay on. But it\u2019s the reality. If the factories are making money, they would remain. Obviously, that\u2019s not the case,\u201d said Cepeda in an interview yesterday.<\/p>\n
He said the factory\u2019s closure sends a clear message about Saipan\u2019s depressed economic situation.<\/p>\n
\u201cThis also emphasizes the need to concentrate on other strong industries like tourism. We can\u2019t neglect tourism like we neglected the garment industry,\u201d said Cepeda.<\/p>\n
He said the government\u2019s neglect of the garment industry was evidenced by the lack of assistance to the local manufacturers since 10 years ago.<\/p>\n
He said the government knew since 1995 that the garment industry would fold up but it did practically nothing to avoid its total demise.<\/p>\n
\u201cIt [government] didn\u2019t help. It could have reduced the tariff rates. It could have minimized the requirements such as provision of housing for its employees and the like. It\u2019s not just this administration. Even the previous administrations could have done something. They knew about it years back,\u201d said the Chamber official.<\/p>\n
[B]Loss of taxes, salaries[\/B]<\/p>\n
Chamber president-elect Juan \u201cPan\u201d Guerrero warned about the negative impact of Concorde\u2019s closure on government revenues. He said the government would lose between $11 million to $12 million in taxes from the factory a year.<\/p>\n
Aside from this, the loss of salaries of over a thousand employees would adversely impact local businesses.<\/p>\n
Guerrero called on the government to amend the fiscal year 2007 annual budget to avoid deficits.<\/p>\n
\u201cYou\u2019re taking millions of funds from government coffers. The result is a budget shortfall for this current fiscal year. The government, the Legislature better do something about it now and not wait for February,\u201d said Guerrero.<\/p>\n
\u201cWe need to brace ourselves. Concorde\u2019s closure will have a great impact across the board,\u201d he added.<\/p>\n
The closure of Concorde brings the remaining number factories on Saipan down to nine from about 25 a decade ago.<\/p>\n","protected":false},"excerpt":{"rendered":"
Two months after it confirmed that it is bowing out of the poker industry, Tan Holdings Corp. yesterday dropped another bombshell\u2014the closure of its garment factory, Concorde Garment Manufacturing Inc., effective Feb. 6, 2007. The move will affect about 1,400 employees, mostly nonresident workers.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-106717","post","type-post","status-publish","format-standard","hentry","category-local-news"],"_links":{"self":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/106717","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/comments?post=106717"}],"version-history":[{"count":0,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/106717\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/media?parent=106717"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/categories?post=106717"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/tags?post=106717"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}