Sports apparel and accessories maker Adidas said on Monday that it is closing two of its flagship factories in Germany and the United States and shifting the manufacturing to cheaper Asian countries. Although the two factories employed only 160 workers, their fate is still unknown.
Adidas said in a statement that production in both these factories will be discontinued by April 2020. The two facilities located in Ansbach and Atlanta use robots and 4D technology to produce the company's high-tech running shoes.
Adidas, which runs both the factories in collaboration with German plastics specialist Oechsler, has been looking for cheaper options for quite some time now. Oechsler CEO Claudius Kozlik said in the same statement that he regretted Adidas' pullout from the factories.
The sportswear major said that a portion of its Speedfactory processes will be adopted by two suppliers in Asia later this year. These two suppliers, according to the company, are traditionally cheaper and will help the company in producing running shoes and also other models in different categories for the first time.
Adidas in order to rely lesser on Asian suppliers, which have often been criticized for unethical working conditions and practices, opened the Speedfactories to produce high-quality sneakers for its market in the West.
The Bavaria-based company believed that its Speedfactories would accelerate production and at the same would time save cost on time of shipping. However, both these factories produce a meager one million of the 400 million athletic shoes made by the company.
The robots and 4D technology in these two facilities is used to produce a small range of high-end sneakers that also includes brands like Futurecraft MFG and a host of AM4 shoes that were inspired by six of the world's largest cities and included artists like DJ Kittens and JaQuel Knight.
Adidas to modernize its suppliers
However, the sportswear giant now believes that the high-quality sneakers can be produced by its suppliers in Asia given the technological advancements.
Moreover, Adidas also feels that the move will make production of these high-quality shoes "more flexible and economical while simultaneously expanding the range of production available". Adidas also said that it would further concentrate on modernizing its other suppliers including the ones in Asian countries.