By Haidee V. Eugenio
Variety Assistant Editor

TOP Fashion Corp., is to cease operations by July 2, but will be paying the return airfare of its nonresident workers and assist them in finding transfer employers if they want to remain in the CNMI.
The factory has about 300 employees, mostly from China.
Yesterday, the lawyer for Top Fashion for almost nine years, Michael Dotts, said the company will pay the employees’ return airfare to China if they do not find a transfer employer.
“The factory lost its competitiveness…due to the lifting of trade restrictions. Saipan factories pay their workers at least $3.05 an hour compared to Vietnam and other countries which pay their workers 95 cents an hour,” said Dotts.
Since January 2005, 14 garment factories on Saipan have shut down their operations because the liberalization of trade rules now allow Third World countries to export their garment products to the U.S., a privilege previously extended to only a few areas, including the CNMI.
Dotts said amending Headnote 3(a) to reduce the value-added requirement for apparel manufactured in the CNMI destined for U.S. consumers will help the remaining Saipan factories to survive. Saipan factories have been closing due to a lack of orders from U.S. retailers.
“There’s also uncertainty with respect to the minimum wage. Factories are concerned that the minimum wage will be increased by 50 cents in the middle of the year... and they will lose out on orders to Asian countries which do not have any problem with the minimum wage,” said Dotts.
Top Fashion factory workers, most of whom are paid the hourly minimum wage of $3.05, have been paid on time and will receive their pay until the last day of work.
“Top Fashion is one of the best companies in terms of employee benefits, structure, on time payments and lack of complaints. It has a very good track record,” said Dotts.
On Sunday, some Top Fashion workers were seen carrying appliances and other household items out of their barracks in Tanapag to be sold.
The factory, which manufactures apparel for Sears, among other retailers, gave its employees notice of the factory closure on Thursday.
Over a hundred Top Fashion workers were transferred from its sister-garment factory, Handsome (Saipan) Inc. which closed last year.
Top Fashion management said only garment production would end in July, but there would still be a lot of administrative work left to do after production ceases. Administrative staff will still be available to assist workers with transfers or repatriation.
The management also said that over the years, Top Fashion has had some really great employees and thanked them for their loyal service and wished them the best of luck.
Dotts said Top Fashion employees will be allowed to stay in the company barracks for 60 days after the shutdown.
Washington Rep. Pete A. Tenorio earlier said that from 34 operating garment factories in 2002, the number dropped to only 13 and they expect “two or three more will close in the near future.”