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Outsourcing of condom manufacturing could cost Eufaula jobs

By By Jim Cook, Media General News Service
Published: March 24, 2009

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A decision by the government to outsource condom manufacturing for its AIDS prevention programs for foreign nations could cost local jobs.

The U.S. Agency for International Development is planning to shift production of condoms to overseas companies, some of which are in China.

According to the Kansas City Star, the move is being made because the agency can get the condoms for 2 cents per unit as opposed to 5 cents per unit.

The move could cause job losses at Alatech which employs about 300 people, including folks at a plant in Eufaula.

Alatech, the sole U.S. condom supplier for the U.S. Agency for International Development, is continuing to lobby the agency to change its mind. The company is also considering court action, said CEO Larry Povlacs.

Povlacs said if these options fail, the Eufaula plant could possibly be retooled to produce other products, like latex gloves, but said the end of condom manufacturing at the plant would be a blow to business.

“If we do not turn this thing around we will have to shut operations down,” he said.

Povlacs said the government’s decision to pinch a few pennies will bite it in the long run if employees here are laid off.

“They’re not considering the cost of turning taxpayers into people needing unemployment benefits,” he said.

Eufaula Mayor Jay Jaxon said, “If we’re trying to keep jobs in the U.S. with this stimulus, it would make sense to do the manufacturing here and just pay the difference.”

Dothan Area Chamber of Commerce President Matt Parker criticized the decision to move to offshore manufacturers, citing safety and quality concerns raised about other Chinese products.

“I think it’s a terrible idea,” he said.

The move to offshore manufacturers will not impact Dothan’s Ansell plant, which specializes in the wrapping of condoms.

Tom Darnell, an Ansell spokesman, said the company, which owns a foreign manufacturing plant, would not benefit from Alatech’s misfortune. The company has not been awarded any manufacturing work by the U.S. Agency for International Development.

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