ALERT IN FOOTWEAR. Is job instability making a comeback?
Due to the erratic economic policies of the government that concluded in December 2023, within a framework of instability and high inflation, and the new measures taken and announced by the new Milei government, presumably to correct previous mistakes, the Argentine footwear industry is on high alert in the short and medium term.
Major factories are reconsidering the continuity of their workforce based on the current market conditions. The Brazilian group DASS, manufacturer of NIKE, ADIDAS, UMBRO, and FILA, with plants in Eldorado, Misiones, and Coronel Suárez in Buenos Aires, has long been experiencing shortages of imported supplies and components necessary for production. Bureaucracy and obstacles to imports, along with the inability to access foreign currency for payments, have caused numerous production interruptions. As a consequence, the company has had to resort to temporary suspensions, layoffs, or early vacations for its staff, to remain sustainable and avoid financial collapse.
According to various news outlets, the DASS group currently records suspensions and layoffs due to the aforementioned reasons, coupled with a sharp drop in demand.
On the part of BICONTINENTAR (formerly Paquetá), the factory based in Chivilcoy, which produces for UNDER ARMOUR, NEW BALANCE, DIADORA, OLYMPIKUS, MONTAGNE, LE COQ SPORTIF, HUSH PUPPIES, RINGO, and ATHIX, reported the dismissal of 101 workers out of the 370 it had in recent months. The measure was able to be halted until December 20th, thanks to the intervention of the Ministry of Labor and representatives of the UTICRA union -footwear workers-.
In this case, the situation arose from insufficient availability of imported materials and components, compounded by a significant contraction in consumption and increased imports of footwear.
In both cases, various interpretations of the events circulate from the different parties involved: pointing to political intent on one side and, on the other, stating that the situation is a direct result of the current reality.
For medium and small factory segments, uncertainty still prevails, especially because inflation persists, with great price volatility, which makes it difficult to achieve sales and replenish supplies. These industries are in a virtual standstill until concrete government measures are defined to allow planning and resuming activities.
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