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Sunday, April 08, 2007

Adidas, Reebok to close distribution centers 4 states consolidating in New Plant in South andCarolina

The newly merged Adidas and Reebok Co. will close four distribution plants.  They are going to consolidate the plants from four different states into a brand-new plant in South Carolina.  The new plant is not yet constructed, but will total over 2,000,000 ft.² in area when complete.

The distribution centers that will be mothballed are located in Massachusetts, Tennessee and Kentucky.  375 jobs will be lost in those states and will be shifted to South Carolina.  Just as there is a brutal competition to shift labor to cheaper markets internationally, within the United States individual states are battling it out to retain jobs or gain jobs usually to the detriment of other states.

New plants and distribution centers often receive heavily subsidized plantar distributions that are financing and major tax breaks.  Relocating plants closing down other plants also enables companies to hire brand-new employees starting them out at lower wages in the seasoned employees they left behind.  In many cases they even bring in temporary employees set up on contract basis.  Their contract will typically expire after 360 days and a new contract will be signed in the new year.  This process is repeated over and over again and enables the company to save money by not having to pay benefits.  

Adidas, Reebok to close distribution centers