Tegra Global plans to merge its Honduran operations as part of a restructuring process and will not close factories or lay off workers in the process, the company confirmed to Sourcing Journal, dismissing claims that it would close a major site in San Pedro Sula.
That said, the U.S. apparel maker still plans to shutter a 1,200-strong plant in Nicaragua. One government official there said that while the action will hurt the country’s workers, the industry has enough factories to offset job losses while other strengths will help it weather the storm.
“We are pleased to announce that we have begun the corporate restructuring process of sister companies Southern Apparel Contractors and New Holland Lingerie de Honduras,” Tegra said in a statement sent to workers and obtained by Sourcing Journal. The upcoming inauguration of the game-changing Proyecto Arena industrial park (billed as the largest Nike factory in the Americas), coupled with efforts to boost operating synergies, prompted the merger, it added.
The move will have “zero impact for you or your labor conditions,” Tegra said in the statement posted on a workers’ app, adding that New Holland’s personnel will be moved to Southern Apparel, which will become the combined entity’s official name.
The Atlanta-based sportswear maker will recognize transferred operators’ “contractual conditions, salaries, rank and accrued benefits” and rights under collective wage agreements, the statement added.
A Tegra spokeswoman confirmed the statement’s accuracy, adding: “We are not closing plants in Honduras or laying off employees. Rather, we are combining many employees into one larger, state-of-the-art facility in order to better serve our customers, as well as maintaining our two additional plants in Honduras.”
The clarification followed union leaders’ claims last week that Tegra intended to shutter a 4,000-strong factory in the Honduran port city as part of a reshuffle that would also see it unwind its New Holland apparel factory in Tipitapa near Managua.
Initially, “there was fear that with the closure in Nicaragua, we could also have something similar here,” Wilson Jarquin, who leads union SitraSoacon’s mission in Southern Apparel, said. “But we have been told it’s just a merger with nothing to do with Nicaragua and that there won’t be any layoffs.”
As part of the process, workers stationed around the two division’s factories will be reassigned with operators at a 4,300-strong mill at the Zip Calpules industrial park set to be transferred to Arena, Jarquin revealed. About 2,000 sewers at another site called El Varon near San Pedro Sulas’ Mega Mall shopping center will also likely be shifted to Arena.
The 63,000 square-meter Arena park is nearing completion. It will enable Tegra and building partner Grupo Kattan to manufacture around 1 million garments for Nike, reportedly becoming the largest site of its kind in the region. Located on 33rd Street in the Southeast part of the city, it is expected to employ 7,000 people.
Meanwhile, Alfredo Colonel, vice president of the National Commission of Free Trade Zones in Nicaragua, said the government will ensure Tegra’s workers receive legally-binding salaries and layoff compensation.
“Tegra has the right to close and open but they have to guarantee workers will be properly compensated and the Ministry of Labor will ensure that,” Colonel told Sourcing Journal.
Tegra’s departure, while disappointing for workers, was not seen as the end of the world for a growing industry.
“We have 200 factories in Nicaragua and 120,000 jobs in the sector,” Colonel noted. “Tegra is just one factory. There are other companies that are growing and can absorb those job losses.”
Nicaragua remains an attractive investment destination offering generous free-trade zone benefits such as 10-year breaks on corporate taxes, machine import levies and other benefits, Colonel boasted.