History of GWG
The Levi's Era
by Catherine C. Cole
Levi Strauss & Co. purchased 75% of Edmonton's Great Western Garment Company (GWG) in 1961 and expanded GWG in Brantford, Winnipeg and Saskatoon, also opening Levi's plants in Cornwall and Stoney Creek. The Saskatoon plant was the first to close in 1982. The Edmonton and Stoney Creek manufacturing plants and the Brantford finishing plants were the last Levi Strauss plants in North America to close in 2004, ending their history as a manufacturing company. The GWG brand was subsequently found on jeans sold at Edmonton's Army & Navy department store, but they were labelled as being made in Bangladesh... perhaps now they are being made elsewhere.
Levi's Ownership and GWG Management
In order to access the Canadian market, San Francisco-based Levi Strauss & Co. bought 75% of GWG in 1961. Peter and Walter Haas of Levi Strauss joined the Board, but GWG retained independent management. Levi Strauss' expansion into Canada allowed the company to more easily market its goods through Canadian stores, to compete with itself through GWG, and to undercut Canadian manufacturers.
At the time, GWG employed 700 workers and wanted to expand, but Edmonton was experiencing a labour shortage. After investigating the establishment of branch plants in other northern Alberta cities and determining there were not enough workers available locally, the company moved forward with its eastern expansion, first purchasing Kitchen-Peabody in Brantford in 1965.
Great Western Garment increased its workforce in Brantford from 300 to 375 within two years and constructed a second 27,500 sq. ft. plant which employed an additional 150 workers in 1972. Controversy erupted over a grant GWG received from the Ontario Development Corporation to build the new factory; local manufacturers accused the government of undercutting Canadian manufacturers through their support of an American-owned company. The government claimed that it was unaware that GWG was owned by Levi Strauss.
The Great Western Garment Company (Manitoba) Limited was incorporated in 1967 with Winnipeg-based Abraham Rich and four Edmonton-based directors, all senior management within GWG. By 1974, GWG had a staff of over 300 in Winnipeg and was the city's second largest employer. In Saskatoon, GWG Ltd. began operations in 1972. The plant employed 150 people, and was a major employer of immigrant women.
Integration of GWG Plants Within Levi Strauss
In 1968, GWG opened a $1 million, 2-storey, 106,000-sq. ft. warehouse in the Strathcona Industrial Park at 4040 98th Street in Edmonton, consolidating storage and distribution of GWG garments produced at Brantford, Winnipeg and Edmonton plants. The building was owned by Marathon Realty, custom built, and leased to GWG, with funding provided by the provincial Department of Industry and Development. To improve distribution, GWG acquired a UNIVAC 9400, the most advanced computer system, and had its own fleet of trucks transporting garments between plants.
In 1970, Great Western Garment changed its name to GWG Limited. In 1972, Levi Strauss bought the remaining shares of GWG Limited. Levi Strauss & Co. (Canada) Inc. was incorporated and GWG became a wholly-owned subsidiary while continuing to retain its Canadian directorship with Russell Gormley as president and the head office in Edmonton. Levi Strauss also established a plant in Cornwall, Ontario in 1972, enabling them to import goods directly. Canada's textile and garment industries were heavily protected through quotas on imported clothing until the introduction of the Canada-US Free Trade Agreement (FTA) in 1987 and the North American Free Trade Agreement (NAFTA) in 1993.
In 1978, GWG Limited and GWG (Eastern) Limited amalgamated under GWG Limited with Erwin Mertens as president. In January 1980, Levi Strauss Canada Inc. took over management of the two Brantford plants, and in May 1981 opened a new finishing centre at 70 Easton Road. Peter Haas of Levi Strauss in San Francisco had pushed expansion of the Elgin Street plant in order to close the old plant on Edward Street and consolidate manufacturing in one location. In 1981, Levi Strauss completed the 105,000-sq. ft., $2.1 million facility—four times its original size. However, the operation was short-lived. Within the year, the plant closed and 268 employees were laid off.
In 1982, Levi Strauss established Great Northern Apparel Inc. (GNA) with its head office in Toronto as a holding company for GWG Inc. and Levi Strauss and Co. (Canada) Inc. A number of Edmonton-based management and office staff were laid off as GWG began to transfer management to Toronto.
In 1984, 85 people were laid off at the Edmonton plant and finishing for all clothing manufactured at Levi Strauss Canada and GWG plants in Edmonton, Stoney Creek and Cornwall was consolidated in Brantford. Some of the finishing workers from Edmonton chose to relocate to Brantford rather than lose their jobs.
Closure of the Saskatoon and Winnipeg Plants
The Saskatoon plant was the first of the Canadian plants to close, shutting down operations in July 1982, followed by the Winnipeg plant in January 1984. By then, GWG's workforce in Edmonton had declined from 1600 at its peak to 500. There were several reasons for the decline: materials and labour shortages, consolidation of work within Eastern plants, increase in imports from Levi Strauss plants in the developing world, the trend towards designer denims, and competition within the industry.
The GWG company name continued to be used until after the 75th anniversary in 1986 when the company introduced the marketing campaign—"History in the Making"—capitalizing on GWG's long history.
The shift from piecework to the quota system in the early 1990s was a turning point for the workers, although production was still monitored very closely and there was still a lot of pressure to work very quickly to complete the required number of operations per hour.
The Brantford finishing plant expanded in 1995, adding 22,000 sq. ft. of space and becoming the second-largest employer in the city. The plant operated 24 hours a day, seven days a week. Levi Strauss offered an unusual incentive to employees in 1996: a chance to share a $16 million prize under a Global Success Sharing Plan, a one-time cash bonus equal to one year's salary if the company met its target of $7.6 billion by the end of its 2002 fiscal year. Unfortunately, although the company did meet its target, the cash was not forthcoming. In 1997, the plant employed 468 people unionized under the Needletrades, Industrial and Textile Employees, however, the following year 200 employees were laid off.
Increasing Offshore Production
Levi Strauss focused production on its Levi's and Docker brands. From 1998 to 2001, the GWG brand was licensed to Montreal manufacturer Jack Spratt. When this contract expired, Levi Strauss resumed production of GWGs in Edmonton and the Levi Strauss plant in Stoney Creek, Ontario.
Between 1999 and 2002 Levi Strauss shifted production to offshore contractors, closing 17 plants throughout North America. Levi Strauss closed 11 plants in February 1999, including the Cornwall plant, which resulted in the loss of 479 jobs in Cornwall as well as jobs at the finishing centre in Brantford. The Edmonton plant was spared because it was extremely efficient and produced a wide range of products including the profitable Dockers and Levi's brands. However, workers remained anxious for their jobs when, later that year, Levi Strauss laid off 77 workers at the Edmonton plant, shifting production to Mexico.
In 2002, Levi Strauss closed six more American plants eliminating 3,300 jobs. At that time it introduced the less expensive Signature brand at Wal-Mart. However, the Signature brand was not as successful as the company had anticipated, and consumers were reluctant to pay premium prices for Levi's elsewhere once they became available in Wal-Mart.
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Levi Strauss ends its manufacturing history (1:39)
Reactions to the Closure
In 2004, Levi Strauss closed its last three Canadian plants and the last two American plants, resulting in 1,180 lost jobs in Canada: 488 in Edmonton, 461 in Stoney Creek and 231 in Brantford. The equipment from the Brantford and Edmonton plants was sold to two individual buyers from the developing world. The Edmonton plant has since been torn down.
Levi Strauss had learned over the years about the importance of public relations surrounding such an announcement. In 1990, They had closed a plant in San Antonio without notice and with minimal severance pay. Workers engaged in protests, hunger strikes and acts of civil disobedience to call attention to Levi Strauss' lack of corporate responsibility. As a result, they won a better severance package and retraining support and Levi's image was damaged. When the company closed the Edmonton plant, they minimized damage by announcing a generous severance package, career counselling and retraining, and donations to local charities.
Working with Economic Development Edmonton, Levi Strauss initiated the "Levi's 488 Project" to help workers find new jobs through a job fair. Unfortunately, many workers did not have the English language skills necessary to easily transfer to another type of work with comparable salary and benefits. Four months after the plant closed, only 105 former employees had found new jobs; 51 were retired, 137 were enrolled in retraining programs, 66 were actively looking for work, and 129 were still thinking about what to do next.
Many former employees have discussed the feelings of sadness they experienced at the time. Kim Ngo remembers, "when we heard the announcement that they were going to close, everybody cried. I cried. At night time I said, 'is it a dream? I hope it is a dream.' We did not want to lose it Some of us even think, could we reduce the wage so that we all can stay? We all connect one another. I saw my manager cry, we cried." Sadat Khan remembers, "The Indian supervisor, she sing a farewell song. Everybody cry at that time. That's the only one I remember, last party. It was very good, and still I'm sad to think about it."
Then Edmonton Mayor Bill Smith said the decision to close the plant was "almost inevitable in the global economy." Was the closure of the plant inevitable? The 1961 decision to sell the majority of GWG to Levi Strauss, allowing the latter access to the Canadian market and, by the mid-1980s, integrating GWG operations into a huge multinational firm took the ultimate decision about the future of the plant out of local hands. Had it remained in local ownership, it might have been able to compete in the fashion denim market, where price point is less significant. GWG thrived in its first 50 years through innovation, flexibility (something that's difficult to achieve in a highly engineered plant or a huge bureaucracy), and cooperation with labour and the local community. GWG's accomplishments are particularly significant given that GWG was the only major garment manufacturing company west of Winnipeg.
Thanks to Levi's for generously allowing the Piece by Piece project to document manufacturing processes in the Edmonton plant in the weeks before the plant closed. All photographs were taken by Andrena Shaw for Ground Zero Productions in February 2004.