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Scouring the Globe to Give Shoppers an $8.63 Polo Shirt

Wal-Mart, once a believer in buying American, extracts ever lower prices from 10,000 suppliers worldwide. Workers struggle to keep pace.

November 24, 2003|Nancy Cleeland, Evelyn Iritani and Tyler Marshall | Times Staff Writers

Bangladeshi factory owners say Wal-Mart and other retailers have asked them to cut their prices by as much as 50% in recent years.

One apparel manufacturer described a visit from a Wal-Mart buyer who showed him a European-made garment that retailed for $100 to $130. The buyer asked the Bangladeshi to produce a knockoff for $10 a dozen. He declined.

"They say to come down in price, but we have to make a profit," complained another clothing maker. Hoping to land a Wal-Mart order for 600,000 fleece jackets this year, he bargained down his suppliers of fabric, thread and fastenings, and managed to cut his price by 20%.

It wasn't good enough for Wal-Mart. "They said they will place the order in Vietnam or China," he recalled.

Syed Naved Husain had hoped to avoid this sort of nickel-and-diming by going upscale.

As head of the apparel division for Beximco, Bangladesh's largest private company, Husain spent $300 million in 1995 to build a computerized textile and apparel manufacturing center in a rice paddy outside Dhaka. He hired hot designers from Asia and Europe.

Within a few years, he was manufacturing clothes for European retailers Diesel and Zara, and his lushly landscaped "manufacturing oasis" had become an industry showpiece.

But the market has started to change. Wal-Mart is selling more-fashionable clothes, and Husain's high-end customers are nervous. They are pushing him like never before to cut costs.

"Unfortunately," Husain said of Wal-Mart, "they've created a model that has taken the world by storm."

U.S. retailers began making their way to Bangladesh in the 1980s. They found a large population of poor, young women willing to work from dawn to dusk for a few pennies an hour.

Many factories lacked ventilation and fire escapes. Labor activists estimated in the mid-1990s that as many as 50,000 Bangladeshi children were sewing apparel for companies such as Wal-Mart and Kmart Corp.

The resulting outcry prompted a government crackdown on the use of child labor and led companies such as Wal-Mart to require suppliers to adhere to labor laws and safety standards.

Sheikh Nazma, a former child laborer, has seen the way Wal-Mart can help clean things up.

She worked at a Dhaka garment factory that had no clean drinking water and only a few filthy toilets for hundreds of employees. After the owner refused to pay their wages for three months, the employees complained to Wal-Mart, the factory's main customer.

"Wal-Mart interfered, and ... the owner paid our salaries and overtime and even paid bonuses to each worker," recalled Nazma, who later helped launch the Bangladesh Independent Garment Workers Union Federation.

But Nazma and others say Wal-Mart undermines its good efforts with its incessant push for lower prices. To fill orders on short schedules, factories often force their employees to work overtime or stay on the job for weeks without a day off, according to Sayeeda Roxana Khan, a former factory manager in Dhaka. To conceal such practices, auditors say, some factories keep two sets of books.

"It's the workers who suffer when entrepreneurs have to survive by cutting corners," said Khan, who now works for Verite, a firm that conducts factory audits for Tommy Hilfiger, Levi Strauss and other U.S. companies.

Khadija Akhter can attest to that. For about $21 a month, nearly three times what a maid or cook would make, the 22-year-old worked in a Dhaka factory, performing final checks on men's shirts and trousers.

Employees, she said, often worked from 8 a.m. to 3 a.m. for 10 to 15 days at a stretch to fill big orders from Wal-Mart. Exhausted, she quit after a year and took a lower-paying but less grueling job.

All the speeding up by Bangladeshi factories may not be enough to satisfy Wal-Mart.

A. Hasnat, Wal-Mart's general manager in Bangladesh, said the country's factories need to become more efficient still. From his vantage, many are poorly managed, have outdated equipment and run too slowly.

"I think they need to improve," he said. "When I entered a factory in China, it seemed they are very fast."


3,000 Factories in China

Eyes down, hunched forward, 20-year-old Ping Qiuxia steered a pair of green women's briefs through a sewing machine. Then her fingers whipped the briefs 180 degrees and moved them back toward her, this time with elastic bands stitched neatly around the edges. Within seconds, she was at work on the next pair.

The garment was part of a 6,000-piece order scheduled for shipment to Wal-Mart stores in Germany. For nine hours a day, sometimes six days a week, Ping and other employees of the Gladpeer Garment Factory in the southern Chinese city of Dongguan churn out undergarments, sleepwear and children's clothing.

In southern China, Wal-Mart has found all the ingredients it needs to keep its "every day low prices" among the lowest in the world.

Although labor costs more here than it does in Bangladesh, China offers other advantages: low-cost raw materials; modern factories, highways and ports; and helpful government officials.

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