It was inevitable, but it's very sad and it won't be the last. What will happen to those people?

Swan may live to regret using that socks and jocks line.

I was amazed to learn that any of the mass-produced clothing lines still made anything here at all. I thought they all went offshore years ago.

We can have cheap clothes and cars and electronic equipment or we can have a thriving manufacturing sector paying Australian labour costs but we can't have both. Both political parties have been quite good at explaining that for 25 years now so it's disappointing to see Turnbull's mob resorting to protectionism again.

Lyn,
Judging from research into the last round of restructuring under Keating in the 1980s roughly a third of those laidoff will never work again; a third will reskill, and a third will find other low skill work. I read that somewhere recently but I cannot recall where. In this case the laid off workers are mostly migrant women.

Ken,
that's right. The textile clothing and footware industry faces a difficult time with competition from low-cost producers, lower tariff rates and free trade agreements. The standard industry policy is to support both restructuring and to shape the restructuring with a value-add, innovative approach to manufacturing (eg.,as in the car industry).

Green said in his review that:

The recommendations of this Review to the Australian Government foreshadow a major change in the focus of industry policy from sector-wide structural adjustment, with generally acknowledged diminishing returns from tariff reductions, to the development of innovative and competitive capability at the enterprise level as part of a process of integrating or ‘mainstreaming’ the TCF industries into the broader policy framework.

It's not clear what this value-add, innovative approach to manufacturing would look like in the textile clothing and footware industry. Was Pacific Brands doing this?

Peter there are still a lot of small fashion houses that get clothes made in Australia, usually using outworkers who get as little as $4 an hour because they are on piecework.

Opinions vary about whether this is a good or a bad thing; some call it sweated labour, others say it provides entry to the labour force for many women who could not do it any other way, especially migrant women from non-English speaking backgrounds. They set up a sewing machine in the garage and work 12 hours a day.

Whether good or bad, it's the only way in which clothing manufacturers can compete against firms in Asia and South America.

I read that they had heavy debt levels, sales were down due to Woolworths having their own private label brands in socks, underwear and basic clothing items. and were required by the banks to restructure more quickly.

The banking syndicate have their hands on PacBrands throat in the current credit crisis. The share price is down to 22c when it was $2.50 in the 2004 float of the company after the hedge funds exited making a profit of $1 billion.

Why the heavy debt? What did they buy?

They bought Yakka workwear in 2007 and Sheridan Sheets in 2005, which cost them around $400 million. Cash is short from declining sales. They are being squeezed by Woolworths, K-Mart, Target etc. It was Woolworths' imported underwear that benefited from Rudd's Xmas cash stimulus, not PacBrands.

The wages cost in manufacturing represents about 12% or so normally of all costs. It is wrong to equate companies leaving Australia for reasons solely of cheap labour.

Companies have been coming and going from Oz for many years for many reasons. Sounds to me the company here has made a few wrong decisions recently and this may be another. But they obviously feel their products can be serviced to the world better from another location(which is true) and are prepared to give up a large portion of their market here to do so.
Thats their choice.

PacBrands is moving to China because of incompetent greedy management. The massive bonus paid to the CEO come from sacking 1850 workers. As Crikey noticed this incompetent management
- was getting 80% of its profit from 3brands and the bottom 200 brands contributed 2% profit
- the CEO has form for taking obscene fees from companies that are being sent broke like Mirvac
- is importing from China at a time when the Australian dollar is expected to devalue against foreign currencies so PacBrands is heading to the liquidator.
As a taxpayer I expect that James McKenzie the CEO pay back the $15 million government subsidy from his bonus.

As a larger Australian I am unable to find chinese made clothes or shoes that are long enough to fit. Then we notice that chinese made goods do not have the same quality control as Australian made goods, so Sheridan sheets shred, Bonds Tshirts twist to the left, and undies shrink in the wash.