Another garment firm closing
Saipan Tribune, Micronesia
By Ferdie de la Torre
Reporter
Another garment manufacturer, Grace International Inc., is shutting down operations on Saipan by next week.
Grace International submitted Monday its formal notice to the Department of Labor about its intention to close business by April 7. The closure will affect about 100 workers, mostly Chinese.Grace International will be the 14th garment factory to close down on Saipan since January 2005. With the impending closure of garment firm Michigan Inc. this Friday, this will leave Saipan with 19 remaining apparel manufacturers.
The Susupe-based garment manufacturer cited that due to a dramatic decline in garment manufacturing business and orders, “it is impossible for the company to continue its operations.â€
Grace International, through production manager Kam Wing Tam, informed Labor that they are asking all of their employees to continue working until the closure of the factory as there are still final orders to complete.
After the April 7 closure, Tam said employees will not have to report for work but will be paid a regular 40-hour week until April 25, 2014.
Tam said the management in recent months has made significant efforts to try and locate work and find additional orders that would enable the factory to avoid or postpone the closure.
“Unfortunately, it is a difficult time for garment factories on Saipan and, despite its best efforts, Grace’s efforts were unsuccessful,†Tam said.
The production manager explained that the notice is submitted to comply with the 30-day notice due to termination for economic necessity, pursuant to the employment contracts of the workers.
“We are asking that all of our employees will be terminated 30 days from the date of this letter or on April 25, 2014,†Tam said.
The manufacturer assured Labor that the company will provide each terminated employee a return ticket to their place of hire, a paycheck and benefits up through April 25, and cooperation should an employee wish or seek to transfer to another employer.
Tam requested Labor to encourage their workers to remain at work until the factory’s closure.
“If our workers abandon their posts, the final orders will not be completed and it will be even more difficult for Grace to meet its final obligations,†Tam pointed out.
Labor Secretary Gil M. San Nicolas told Saipan Tribune yesterday that he received Grace International’s letter about the closure.
“We would follow the same standard procedures as we had done with the previous garment companies that closed,†San Nicolas said.
San Nicolas said he would ask the Labor director to have their investigator in charge of the garment industry call in the parties-the management and the local resident agent of the company.
“We will discuss the matter with the legal counsel [Dorothy Hill]. We will address the needs of the employees as we do with all the garment [factories]. We will give them due process,†the secretary said.
San Nicolas said that, according to their records, the company was issued 198 valid work permits.
But Labor learned from the company’s resident manager, Ramon P. Crisostimo, they have less than 100 workers on the island.
When asked for comment, Crisostimo said the management formally informed Labor and the employees about the closure Monday.
Crisostimo said they have 85 alien workers and about 30 locals. He refused to comment further, saying they will soon hold a press conference.
Grace International began operations in the mid-’80s. It used to have 300 to 400 employees, a worker told Saipan Tribune.
In January 2005, the World Trade Organization lifted trade quotas, allowing many Third World countries to export their garment products to the U.S. As a result, many garment factories in the CNMI shut down operations.
The CNMI’s garment industry used to contribute some $60 million in direct taxes a year to the local government. For user fee alone, which represents 3.7 percent of total industry sales, the government used to collect an average of $30 million a year.
