The pain of the South American footwear market: 2,100 workers laid-off in Argentina; Abicalçados writes to the government in Brazil

Footwear segment under (a lot) of pressure in Argentina and Brazil. Yesterday, as announced at the end of November, was the last day of work for those employed in the production site of Paquetá, in Chivilcoy: 397 employees fired. The factory had been operational since 2006, and, at one point, was employing 1,500 people. According to local unions, the liberal policies chosen by the government, along with the finished or semi-finished product imports, have hit the company with a finishing blow. “We were 800 two months ago. The closing of the site is due to missing orders by Adidas, of which Paquetá had the exclusive, with regards to finished footwear.  When a government opens to imports, the first factories that close are the textile and footwear ones”, commented Lorenzo Lezama, union spokesperson, as reported by some online Argentine media. Same (bad) end for the Dass footwear factory, in Eldorado, which fired 175 employees due to, says management, a decrease of sales in 2016, caused by, same her, imports and lower internal demand. According to the Union for Workers in the footwear industry (UTICRA), workers learned they were being laid-off only once they entered the factory. In the last few months, in Argentina, between Paquetá, Dass, Gaelle and Alpagatas, 2,100 jobs disappeared. But, the fears surrounding Argentina’s footwear industry are not uncommon in other countries. The footwear segment suffers in Brazil as well, where Abicalçados has presented an “alarm-sounding” document to the government. There are currently 7,000 footwear production sites in Brazil, employing 300,000 people directly. If we add the impact that the industry has, half-a-million people are affected. Among the measures listed in the document, we find that “efforts need to be made to solidly adjust the fiscal system, which will safeguard investments form the private sector, and include reforms for social safety and bureaucracy”. The document also cites “the need for more flexibility with regards to environmental regulations, and places focus on the issues that arise with a free market system”. In the last ten years, Brazilian footwear exports have decreased from 1.7 billion to 1 billion USD, which is similar to the level of the 90’s.