Vans Lays Off 380 Workers in Southland Plants : Jobs: Teamsters trying to unionize say those let go were likely backers. Firm denies claim, cites production abroad.
Vans Inc. said Tuesday it has laid off 380 workers at its two factories in Southern California and Teamsters Union representatives complained that the employees likely were those who favor union representation at the company’s plants in Orange and Vista.
Christopher Staff, president of the Orange-based casual shoe company, disputed the union’s allegations, maintaining that the workers were let go because more of the company’s shoes are being produced at manufacturing facilities abroad.
The two factories employed more than 1,700 people before the layoffs. Employees were given notice Friday, but the company did not acknowledge the payroll slashing until Tuesday.
Raul Lopez, secretary-treasurer of Teamsters Local 396 in Los Angeles, said the layoffs were part of an ongoing battle between Vans management and the union, which started last April when company employees voted to reject the union.
After union officials complained about the anti-union tactics employed by the company, the National Labor Relations Board in November said it would seek an order to overturn the April election and conduct a new one.
A hearing is scheduled for April 1 in Los Angeles and a new election date is expected to be scheduled then.
Company officials scoffed Tuesday at allegations that they were trying to solve their union troubles by getting rid of activist workers.
The layoff was “marketing strategy, pure and simple, and has nothing to do with the union,” said Robert Wolcott, a spokesman for Vans.
Wall Street investors had reacted Monday to rumors of the layoffs by selling Vans common stock, driving the shares down 16% to $5.25 from Friday’s closing price of $6.25.
The stock climbed back to a closing price of $5.875 a share Tuesday after Staff issued a statement maintaining that the decision to lop nearly a quarter of its domestic employees from the payroll was not an attempt to cover up for poor financial performance by slashing operating costs.
Rather, he said, the company no longer needs the domestic workers because it is manufacturing more of its products abroad. Van’s “International” brand of shoes, manufactured in South Korea, is a better seller now than lines it produces in the United States.
Analysts who follow the company, however, viewed Staff’s announcement with skepticism. Most said that despite the company’s reassurances that Vans is in fine financial shape, they expect earnings for the quarter to be low when reported later this month.
The two U.S. plants have been operating at less than capacity, said Eric Appell, an analyst at brokerage Torrey Pines Securities in La Jolla. “We expect them to take a hit because of it.”
Appell added that Vans’ earnings for the second quarter are likely to be depressed by charges relating to the layoffs.
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Shoe Business
Rumors of layoffs sent the common stock of Vans Inc. into a tumble Monday. A look at the closing stock prices for the Orange-based casual shoe maker on the last trading day of each month during the past year:
Tuesday’s close: $5.875
Source: Bloomberg Business News
