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Their dreams unraveled

A Salvadoran garment plant was seen as an alternative to sweatshops. It failed to turn a profit and, many say, to keep its promises.

July 07, 2007|Marla Dickerson | Times Staff Writer

San Salvador — IT was a story of hope: a Central American sweatshop transformed into a unionized, worker-run apparel factory, thanks to nearly $600,000 in loans and donations, including help from retailers Gap Inc. and Lands' End and the AFL-CIO.

Boosters traveled to U.S. college campuses and church basements, touting the Just Garments plant in El Salvador as a company looking to do well by doing right by employees. Impoverished Salvadorans saw a chance to earn better wages and have a say in their future.

"We had a dream," said sewing machine operator Esperanza Caridad Mejia.

In the end, that's all it was.

Just Garments closed its doors in April, owing 55 former workers $65,000 in back pay and benefits, according to a union official. Employees say they never made more than minimum wage. Many weeks they didn't get paid at all. Some have come forward alleging poor working conditions and unjust firings.

Despite the funds from major retailers and others, steady contracts never materialized. A lender is questioning how money was spent.

Just Garments is now caught in a tangle of recriminations and legal actions. The closing has unraveled the once close-knit workforce, split organizations that would normally be allied and put some U.S. anti-sweatshop groups in the position of having backed a project accused of engaging in some of the practices they condemn.

It has also prompted soul-searching by supporters who admit that operating a sweat-free factory profitably is easier in theory than reality. Just Garments, some say, was doomed from the outset, lacking sufficient capital, seasoned management or even a market for its products.

"It was not a recipe for success," said Scott Nova, executive director of the Worker Rights Consortium, a Washington nonprofit that helped broker a contribution to the venture of $53,000 in machinery and textiles from Lands' End.

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Just Garments emerged from the wreckage of a shuttered Taiwanese garment contractor called Tainan Enterprises. The firm closed its Salvadoran operations in 2002 after employees won legal recognition of a union and asked for contract negotiations. Jobless workers were blacklisted from nearby clothing plants, according to anti-sweatshop activists, who pressured some U.S. retailers doing business with Tainan to intervene.

A deal was reached in late 2002. Tainan provided sewing machines and $160,000 in capital to start a new factory controlled by unionized employees.

But the company struggled from the start. Tainan didn't supply promised technical assistance. The fledgling shop couldn't attract a veteran leader, settling on a manager with limited experience who didn't stick around long. It spent months and much of its start-up capital rehabilitating a decrepit facility in Soyapango, an industrial suburb of the capital, San Salvador.

When Just Garments finally opened for business in early 2004, the plan was to manufacture cargo pants for Gap, a former Tainan customer that agreed to give the plant a test order as part of the settlement with workers. But the factory couldn't meet the retailer's quality standards.

So Gap paid for a consultant to help it improve its performance and kicked in a $124,000 development grant in exchange for ending the production relationship.

Most of that went for immediate needs such as rent, utilities and salaries, said company administrator Gilberto Garcia. A charismatic human rights activist who helped organize the union at Tainan, Garcia admitted he knew little about business.

Workers appointed him to the board of directors of the new company. He also served as the de facto chief executive and spokesman, largely because no one else was willing to do it.

Garcia called the settlement with Gap an "amicable divorce." Still, he suspects that someone tampered with Just Garments' test samples to sink its chances of winning the contract.

It's one of a host of dark economic and political forces Garcia contends doomed the factory. El Salvador has a history of repression and violence against organized labor. Garcia said businesspeople wouldn't rent affordable space to the upstart, major clothing labels didn't want to deal with a union supplier and officials in El Salvador's conservative government hamstrung the enterprise with red tape.

"They didn't want us to succeed," he said.

Others say many of Just Garments' wounds were self-inflicted. The consultant's report cited low worker productivity, high defect rates, poor supervision, blown delivery deadlines and no clearly defined business plan. The plant took money-losing subcontracting jobs to keep workers occupied. When the Gap contract fell through, it shifted its focus to making T-shirts, work for which it lacked proper equipment.

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