Rawlings Plays Hardball and Lays Off 200 in Costa Rica

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The most iconic brand of sporting equipment in Major League Baseball (MLB) will trim down its operations in Costa Rica. Rawlings, the official provider of baseballs to the MLB since the late 1970s, has announced that it will shut down its uniform manufacturing operations in Costa Rica and will move them to El Salvador, where cheaper labor and lower overhead expenses await.

According to a news report filed by business journalist Angie Guerrero of online news daily CRHoy.com, Rawlings expects to complete its move to El Salvador within the next weeks. 200 positions will be terminated; the laid-off employees were notified a few days ago.

Ms. Guerrero quoted comments from Rawlings manager Alejandro Cotter, who spoke from the factory in Turrialba:

We notified the employees last week; we told them that the uniform manufacturing operation will be moved out of the country, but we want to keep our strong product, which is baseballs [and softballs], here. The uniforms are part of a very competitive global market, which is unfortunately dominated by Asia. We have disadvantages in Costa Rica because the scale of our production is for a small and exclusive segment.

In El Salvador, Mr. Cotter explained, manufacturing of uniforms will be increased by subcontractors, which means that Rawlings will not have to worry about contributions to La Caja (Costa Rica’s public health care system) or the dreaded aguinaldo (13th month salary payment issued by law as Christmas bonus).

Mr. Cotter added that this is the first time Rawlings deals with a mass layoff in Costa Rica, and it has been a learning experience insofar as working with CINDE to help relocate the terminated workers. As part of a new initiative to slow the rate of foreign companies exiting Costa Rica, employers that lay off workers must provide resources to CINDE so that they can all help their terminated employees find new jobs.

More than 400 workers will remain in the baseball factory, located in the district of Las Americas in Turrialba. That factory is legendary for its quality manufacturing of baseballs, which are carefully sewn by hand. Professional baseball players around the world are familiar with the craftsmanship of the Rawlings factory in Costa Rica.

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