American Apparel might face cuts if government decision not overturned

Published 7:13 pm Wednesday, October 3, 2012

Selma-based American Apparel has filed a protest with the Government Accounting Office about a contract manufacturing coats for the U.S. Army being awarded to a Canadian-based company. If the protest is not successful, the company might be forced to eliminate an estimated 250 jobs.

Over the past 12 months, Selma-based American Apparel has reduced its workforce to 1,100 employees companywide in response to reductions in government inventories and budget constraints, competition from Federal Prison Industries and restrictions on products that can be awarded to businesses with more than 500 employees.

The bulk of those staffing cuts came when the company closed its Fort Deposit plant in March 2012, eliminating 246 positions.

Now, the reductions could be even more severe if the company is not successful in appealing the awarding of a key government contract to a Canadian-based manufacturer.

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Wednesday, in a company press release, American Apparel said the company filed a complaint with the Government Accounting Office on Sept. 21, objecting to the award and asking for it to be overturned.

According to the release, American Apparel learned the contract for the manufacturing of the ACU (Army Combat Uniform) coat — used by the U.S. Army — had been awarded to Alaskan Native Corporation, SNC, which has sewing facilities in Puerto Rico, where the product will be manufactured. American Apparel said SNC is a company that has never manufactured the product.

For the past seven years, American Apparel had maintained the contract and approximately 250 employees at the Selma operation were dedicated to this product.

The company said that if the protest of the award is not reviewed favorably by GAO, “the 250 employees in Selma working on this product will be laid off on a permanent basis beginning the week of Oct. 5, 2012 and will be completed by Jan. 15, 2013.”

The company’s release came out Wednesday afternoon. Attempts to reach company officials were unsuccessful.

Wayne Vardaman, executive director of the Selma and Dallas County Economic Development Authority, said he learned of the contract issues about 10 days ago and had been working to get company officials in front of state and federal lawmakers, who could hopefully help in fighting this contract being awarded to Alaskan Native Corporation, SNC.

“At this point, we have been working to get this issue in front of our state and federal elected officials, working with the State Department of Commerce and others to help in any way we can,” Vardaman said.

U.S. Rep. Terri Sewell (D-Ala. 7th) said Wednesday she was disappointed by the decision to award the contract to SNC.

“I am especially frustrated by this recent decision in light of my office’s continued efforts to strengthen the Defense Logistics Agency’s critical partnership with American Apparel,” Sewell said in a release. “This decision will have profound economic implications for the more than 250 hardworking men and women affected by the impending layoffs.”

Vardaman said American Apparel officials had the chance to discuss the issue with U.S. Sen. Jeff Sessions during his recent visit to Selma, and officials with the Defense Logistics Agency were in Selma in April, joining Sewell at American Apparel’s Selma operations.

“At my request, key DLA procurement officials visited American Apparel headquarters in Selma in April 2012 to tour its facility and discuss DLA’s procurement process with company management. During this visit we engaged in intense dialogue about the future of the military uniform industrial base and how companies like American Apparel can remain competitive,” Sewell said. “While I had hoped this meeting would have resulted in a more meaningful outcome, DLA’s recent decision reflects the same industry frustrations and concerns with its current procurement process.”

Sewell added she “strongly” supported the company’s protest to the GAO and had joined in other members of the Alabama Congressional delegation in requesting the protest get an “expedited review.”


Staff writer Sarah Cook also contributed to this article.