Danish footwear brand ECCO is closing its factory in Ho Chi Minh City's Bau Bang Industrial Park, affecting more than 1,600 workers, VnExpress International reports. Production stopped on Monday afternoon, 2 November, to begin dissolution procedures.
Truong Van Phong, deputy head of the city's Export Processing and Industrial Zones Authority (Hepza), said the parent company ECCO Sko A/S decided to dissolve ECCO Vietnam. The company cited years of declining market demand that left it with excess production capacity, and said the closure is part of a global restructuring that consolidates manufacturing in fewer facilities.
The plant began operating in April 2020 on 12 hectares, at a cost of VND861 billion (US$34 million), with an annual capacity of 8.1 million footwear products and parts. It was previously in Binh Duong Province.
Contracts for workers who are not offered continued employment end on 30 November, or earlier if they expire before then. Some staff will be kept for a few months to help with the dissolution.
Workers will receive unpaid wages, payment for unused annual leave and other amounts owed under regulations. Beyond statutory severance, the company will pay half a month's base salary for each year of service, with service under 12 months rounded up to one year. Workers also get a 13th-month salary prorated to time worked, and those who help with the dissolution receive a bonus of 50% of one day's base salary for each day worked.
On Monday, Hepza, the city's Labor Federation and local authorities met company officials and told them to honour their commitments and help workers find new jobs. Phong said at least eight nearby companies had expressed interest in hiring about 1,611 workers. Hepza said the company has not defaulted on social insurance premiums.
The city's Trade Union Labor Consultation and Support Center will review the company's announced policies against legal requirements and monitor their implementation. The HCMC Employment Service Center reported 1,306 vacancies and 2,473 applicants in the garment, textile and footwear sectors in October.
Sources
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