INDEPENDENT FACILITATOR ISSUES RULING ON UNPROFITABLE LESLIE FAY FACILITY IN WILKES-BARRE, PA.NEW YORK--(BUSINESS WIRE)--MAY 5, 1995--The Leslie Fay Companies, Inc. (NYSE NYSE See: New York Stock Exchange : LES) said today that an independent facilitator from the Washington, D.C. labor mediation mediation, in law, type of intervention in which the disputing parties accept the offer of a third party to recommend a solution for their controversy. Mediation has long been a part of international law, frequently involving the use of an international commission, firm of Bill Usery Associates, Inc. has issued a binding recommendation that Leslie Fay be relieved of its contractual obligations to guarantee any jobs at its Route 315 manufacturing facility in Wilkes-Barre, Pa., after July 31, 1995. The facilitator's decision is based on a study by the accounting firm of Deloitte & Touche, which concluded that it is not possible for Leslie Fay to profitably manufacture dresses at the Route 315 facility. In accordance with Deloitte & Touche's findings and the facilitator's subsequent ruling, Leslie Fay intends to close the Route 315 facility as of August 1, 1995, and has begun the formal notification process required under the WARN Act The WARN Act may refer to two pieces of legislation of the U.S. Congress:
John J. Pomerantz, Chairman and Chief Executive Officer of Leslie Fay, issued the following statement: "Many factors -- both internal and external -- have contributed to the declining profitability of the Route 315 facility, including dramatic changes in the global apparel industry, intense competition and an increasing consumer focus on value. In light of the facilitator's ruling and our continuing responsibility to maximize value for our creditors, Leslie Fay has determined that it has no alternative but to discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: its in-house manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. in the Wyoming Valley Wyoming Valley, c.20 mi (30 km) long and 3 to 4 mi (4.8–6.4 km) wide, in Luzerne co., NE Pa., through which flows the Susquehanna River. Wilkes-Barre is the major city of this once-rich anthracite coal region. region of Pennsylvania. "We regret that this decision will have a profound impact on the lives of hundreds of people in the Wilkes-Barre community, many of whom have spent their entire careers at Leslie Fay. We intend to work closely with the International Ladies' Garment Workers' Union International Ladies' Garment Workers' Union (ILGWU) Former industrial union in the U.S. and Canada that represented workers in the women's clothing industry. When it was formed in 1900, most of its members were Jewish immigrants working in sweatshops. and local officials to ease the impact of the shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down and help identify suitable opportunities for employees affected." As part of an agreement reached by Leslie Fay and the ILGWU ILGWU abbr. International Ladies' Garment Workers' Union in the summer of 1994, the parties created a joint labor-management committee, chaired by a facilitator from Bill Usery Associates, Inc. The facilitator then retained Deloitte & Touche to conduct an independent study, with the full participation of the committee, to determine under what conditions the company's domestic manufacturing facility in Pennsylvania could profitably produce dresses to be able to compete in the moderate dress market. After research, discussions and participation by management, members of the ILGWU, customers and others, Deloitte & Touche issued its preliminary report to the joint labor-management committee in late February. The report was subsequently modified to reflect the Company's disappointing 1994 financial results and revised projections for 1995. Deloitte & Touche's final report concluded that no conditions or combination of conditions existed that would allow the Route 315 facility to profitably produce dresses. The facilitator concurred with the findings of the report, as modified, and relieved the company of its contractual obligations to guarantee any jobs after July 31, 1995. "We are considering a variety of sourcing alternatives -- including domestic contractors in Pennsylvania and New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , as well as overseas manufacturers -- for the Leslie Fay Dress division," Mr. Pomerantz said. "Our objective is to significantly enhance the gross margin on our dress lines, which have been selling extremely well at retail in recent months." CONTACT: James Fingeroth Michael Freitag Kekst and Company (212) 593-2655 |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion