January 17, 2005
below are three successive parts (three successive sundays) from the Los Angeles Times -my own subtitle of which might be-
'American free-enterprise, capitalist democracy and the right to make as much money as you can and spend it any way you choose' (as long as there's no law against it :-) is the single agency of greatest per_capita resource/environment destruction and
waste in the history of man.
(-from 'Business' and 'Making money')
-'diasporatively cheap natural resources and labor' wherever and however you can get it.
January 16, 2005 Los Angeles Times
A WORLD UNRAVELS
Clothes Will Cost Less, but Some Nations Pay
Consumers gain when textile quotas end and jobs move to China and India. Poor countries lose out.
By Tyler Marshall, Evelyn Iritani and Marla Dickerson, Times Staff Writers
Phenom Penh, Cambodia
As a poor nation struggling to compete in an increasingly globalized economy, Cambodia has little to offer factory owner Leon Hsu.
Electricity is erratic. Traffic along the road to the port of Sihanoukville includes the occasional elephant. If a truckload of men's shirts doesn't reach the port on time, it may be days before another vessel departs for Singapore,
where goods are transferred to a larger ship for the voyage to the United States.
None of that much mattered over the years, because international quotas guaranteed Cambodia the chance to sell clothing and textiles to retailers in rich, developed nations. Designed to protect manufacturers in North America and Europe
from foreign competition, the import quotas ended up working as a global version of Head Start, an affirmative action program for countries that had large, unskilled workforces and not much else.
The last provisions of the 30-year quota system disappeared at the beginning of the month, leaving Hsu few reasons to stay in Cambodia. Beckoning him are far more efficient venues — chief among them China — with modern factories,
highways and ports, prolific workers and all the fabric, thread and buttons he could want.
Miss a shipping date out of southern China, and another vessel is leaving soon, often within 24 hours. And it's a direct shot to Los Angeles or Rotterdam, Netherlands.
"I'll be happy to go," Hsu said.
When he does, he won't be alone. The end of the quotas has triggered what trade experts believe could be one of the largest migrations of production in history, jeopardizing Cambodia's 220,000 apparel jobs. Hundreds of thousands more
are threatened in Bangladesh, El Salvador, Lesotho and other countries that prospered under the quota system.
The massive manufacturing shift will be a windfall for billions of people, bringing huge savings to consumers and accelerating the transfer of jobs to engines of low-cost production in China and India. But it could cripple economies
across Latin America, Africa and Asia.
Relative newcomers to the international commerce club risk losing their claim to an industry that lets them play in the big leagues. Millions of people whose jobs sewing knit shirts or jeans have meant schooling for their children or
roofs over their heads could slide further into poverty.
In Africa, where manufacturers supply employees with condoms and healthcare, the battle against AIDS could be weakened. Illegal immigration from Latin America to North America may rise. Efforts to improve the economic position of women
in predominantly Muslim countries are threatened.
The quota system "has been an extremely cost-effective method of bringing social and political stability to a very needy part of the world," said Peter Craig, a Washington-based trade commissioner for the Indian Ocean island nation of
Mauritius, which has lost 20,000 apparel jobs since 2003. When the full effects of its end are felt, "it'll be horrendous."
Already, the unleashing of free-market forces has begun to shake the foundation of a trading scheme that brought undreamed-of prosperity to millions and helped create the corporations that dominate international commerce. Now that the
rules have changed, those corporations are likely to become even more powerful, and some of the poorest will see their short-lived gains slip away.
"Very few people understand, or they're just starting to understand, what this means," said Mark Levinson, a U.S. apparel union economist who estimates that as much as $40 billion of production will be transferred to China from the
developing world. "It's going to be chaos in the global economy."
Advocates of free trade see it all very differently. They argue that the quotas' demise should be celebrated. In their view, governments no longer protected by quotas will be forced to get rid of the corruption and
inefficiencies that, in fact, have held them back.
"This isn't punishment for those countries" that are losing factories and jobs, said Dean Spinanger, a senior researcher at the Kiel Institute for World Economics in Germany and an expert on the quota system. Instead, "it will make them
aware that they have to shape up."
Supporters also point out that the full effect of the phaseout isn't likely to be felt immediately, because Washington has the right, under World Trade Organization rules, to reimpose restrictions on Beijing through 2008 if the United
States is swamped with too many Chinese imports.
China has responded to the global angst. Last month, officials in Beijing said they were going to try to control their growth by imposing a small tax on apparel and textile exports and monitoring their factories' output.
For his part, David Spooner, the U.S. trade official in charge of textile policy, believes that the elimination of quotas will be far less disruptive than many predict. A small nation, he said, might be able to develop a niche market
and flourish. In any event, he added, a lot of the anxiety is unnecessary, because not all the big buyers of cut-rate T-shirts and jeans will abandon their longtime suppliers and rush to China.
Wal-Mart Stores Inc., for one, says it isn't planning any dramatic moves. But of course Wal-Mart already is the leading U.S. importer of goods from China; it's expected to bring in $18 billion of goods this year. Spokesman William Wertz
said the company expect to remain a major player in other countries such as Bangladesh, at least "until we see how things sort out."
The chief purchasing executive for J.C. Penney Co., Peter McGrath, said he couldn't imagine the giant retailer's supplier base falling below a dozen countries, in large part because it doesn't want to be too dependent on any one
On the other hand, J.C. Penney has in the last three years slimmed down its supply network from 5,000 manufacturing plants in 51 countries to about 1,800 in 23, which McGrath reckons will reduce import costs as much as 18%.
J.C. Penney's purchasing freedom had been curbed by a 1974 trade pact called the Multifiber Arrangement, or MFA. Its members — the United States, Canada and 13 countries in Europe — used quotas to regulate access to their clothing and
The quota system was a bureaucratic headache. Every year, the United States and others in the MFA parceled out their quota allocations to various governments around the world, and those rights were distributed to companies that wanted
to produce the goods covered by a particular quota. Manufacturing work was spread all over the world.
The MFA's network of quotas began to be phased out in 1995, and now buyers can shop wherever they like.
Oddly enough, many of the countries fretting about the consequences, such as Mexico and Egypt, were the very ones that pressured the WTO to do away with all the restrictions on trade in textiles and clothing.
Armed with huge pools of cheap labor, these countries figured they could grab even bigger shares of the North American and European markets if the J.C. Penneys of the world were not constrained.
What many failed to foresee was that the dynamics of global competitiveness would be turned upside-down with the emergence of China and India as economic powerhouses.
Within their vast borders, the two countries — the most populous in the world — can offer the low wages of poor nations along with the efficiencies of modern economies. The advantages are perhaps most evident in the textile and apparel
industry, which requires large pools of unskilled laborers but also depends on fast delivery and the ability to change production specs on a dime.
What's more, global trade has come to be dominated by huge multinationals such as Wal-Mart or Carrefour of France that can make or break entire economies with their orders.
Wal-Mart, for example, buys as much as one-third of the clothes made in Bangladesh, a major producer of men's dress shirts and khaki pants. In Cambodia, making clothes for Gap Inc. and other leading U.S. and European retailers accounted
for one-third of gross national product in 2003.
Big retailers have always been able to leverage their huge orders into lower prices for raw materials, production and shipping. But now that they aren't bound by import quotas, it's far easier to funnel orders to the factories that
produce the most, the fastest and the cheapest.
Yves Robert Lamusse, director of Palmar International Ltd., a struggling apparel factory in Mauritius, said it was impossible for a remote island nation to compete now that a "dictatorship of retailers" was pushing prices lower and
"My generation, I don't know what war is," said the fifth- generation Mauritian, who recently invested in two factories in Mozambique because labor costs there are 15% lower than in his native land. "My kid's generation, they don't know
what war is. But we are in a war."
The case of Cambodia illustrates how hard it can be to compete for clothing contracts against the likes of China, where the apparel and textile industry employs at least 15 million people and entire towns are
devoted to the production of socks or neckties.
During the murderous reign of Khmer Rouge leader Pol Pot in the late 1970s, Cambodia lost its business and intellectual elite, along with a generation of potential managers and entrepreneurs, when more than 1 million people were
Foreign investors have been reluctant to put money into a country plagued by political unrest and illiteracy. The cash-strapped government can't afford to build new highways, upgrade the energy grid or modernize the Sihanoukville port,
where inspectors tracking container traffic use pens and stacks of paper layered with carbon paper in a flashback to pre-photocopier, let alone pre-computer, days.
Cambodia certainly doesn't boast the multilane freeways and high-speed telecommunications lines prevalent in the exporting zones of China. That infrastructure was paid for, in part, by the $52 billion in direct foreign investment China
received in 2003 — compared with Cambodia's $251 million.
But for a few decades, the textile and apparel quotas let Cambodia be a contender.
Hsu, a native of Hong Kong, moved to Phnom Penh in the early 1980s and opened four factories. He counted among his customers J.C. Penney and Wal-Mart.
Because they were forced to order clothing from factories in more countries than they would have liked, Cambodia benefited. Another boon was a U.S. initiative that linked expanded import quotas to improved labor rights.
Then came the phaseout. At the end of 2002, quotas on nightgowns and baby clothes expired. J.C. Penney, which had bought $600,000 of baby clothes from Hsu's Cambodian factories in 2001, cut its order by two-thirds the next year and to
zero in 2003.
Wal-Mart, a buyer of women's nightgowns, told Hsu in 2003 that it wouldn't order from him unless he could lower his price to $5.95 a gown from $6.20. Hsu said he couldn't afford to say yes.
"I lost 20% of my business right there," he said. "It's all gone to China."
Wertz, the Wal-Mart official, said he couldn't confirm the details of that transaction. But he said Wal-Mart was still buying nightgowns and other apparel from Hsu's Cambodian factories.
J.C. Penney spokesman Tim Lyons said his buyers couldn't find any record of business dealings with Hsu's factories in Cambodia.
Although Hsu sees all the business heading to China, there are other nations benefiting from the quota elimination. New business is going to India and Pakistan, for instance, because of their homegrown cotton supply and reputations for
China, though, is drawing the bulk of the post-quota work.
Although retailers claim that they won't risk placing all their eggs in one basket, experts figure that China could capture at least half of all apparel production — and a far greater share of the U.S. market — within a few years. India
could take much of the rest of the $681-billion global apparel market.
That could create a dangerous divide within the developing world, if China and India are seen as flourishing at the expense of their neighbors, said Auret van Heerden, president of the Fair Labor Assn., a coalition of leading retailers,
nongovernmental organizations and activists interested in improving working conditions.
"You could end up with hundreds of thousands if not millions of people who start to question the basis of this new global economy," he said. And because the United States was a leading architect of the new trading system, "it would be
naive not to anticipate a rise of anti-Americanism."
For the United States, the quota system was a useful foreign policy tool. The quota system gave Washington some leeway in divvying up its market every year, and the government used that — along with tariff rates —
to bolster poor countries or reward those that were geographically or politically strategic.
By opening the doors wider for Lesotho in 2000, for instance, the United States sent the apparel industry in that African nation into overdrive. Since then, exports of clothing to U.S. buyers such as Gap, Wal-Mart and K-Mart have more
than tripled to $400 million from $120 million.
In the 1980s, the Reagan administration had done the same for countries in Central America and the Caribbean, which today supply two-thirds of the imported cotton undershirts, briefs, boxers and panties that Americans put on each day
and 80% of the foreign-made cotton T-shirts cluttering U.S. closets.
But for its part, the Bush administration isn't fretting over the policy implications of the end of quotas. The White House, and other supporters of the phaseout, contend that the system simply exacted too high a price to be maintained,
propping up uncompetitive producers.
What's more, it cost Americans $50 billion to $60 billion annually — an average of $500 per household — in higher clothing prices, according to the International Trade Commission. Part of the higher costs came from fees associated with
the quota system.
"Quota charges are essentially a tax paid by American consumers on imported goods," said Skip Kotkins, president of Skyway Luggage Co. in Seattle, who moved all of his production in Thailand to a giant new factory complex in southern
China when quotas were removed from luggage in 2002. Kotkins said his costs had been trimmed by as much as 20%.
The costs to the countries that are losing clothing and textile contracts have only begun to be counted. Many trade specialists see the post-quota era as every bit as potentially destructive as the unrestrained capitalism of the late
19th and early 20th centuries that spawned sweatshop conditions and price-fixing monopolies.
Already, gains in wage levels and working conditions are starting to unravel. In Lesotho, the government has agreed to give apparel and textile factory owners an exemption from paying a mandatory cost-of-living increase. Business
leaders in El Salvador want to reduce the nation's $5.04-a-day maquiladora minimum wage in rural areas to stay competitive with China and its lower-cost neighbors in Central America.
Halfway around the world in the Philippines, a panel of business and government officials has proposed exempting garment makers from paying the minimum daily wage, which ranges from about $3.75 to $5.
It's clear to Rustam Aksam who the losers will be. "No job security, no income security," said the Indonesian labor leader, who figures his country could lose as many as 500,000 jobs.
Critics of the phaseout want world leaders to act now to ensure that the weakest countries — many of which are fragile democracies — are given the chance to reap the rewards of global trade, just as the United States acted to protect
consumers in the late 1800s by passing antitrust laws to deal with the robber barons.
"Americans have short memories," said Stephen Lande, president of Manchester Trade Ltd., a Washington trade consulting firm. "To just sit idly by and let these countries take an economic shot and not do anything about it makes no
Carving out space for the underdog is more complicated than it was a century ago, when Washington's major worry was that consumers would be gouged by the monopolists. Today, prices are still viewed as part of the
problem — though not in the same way.
In an unregulated global market, the drive to shave costs places excessive pressure on employers to keep wages low and to jettison costly benefits, said Gary Gereffi, a Duke University sociologist who is an expert in global production
"We need to find creative ways to reestablish the floor below which things aren't allowed to sink," he said.
The problem: There are no international organizations with the responsibility or power to regulate manufacturing practices or labor conditions, let alone the world's new concentrations of industrial and buying power.
The Geneva-based WTO is in charge of trade policy but has shied away from tackling contentious issues such as labor standards or environmental exploitation. The International Labor Organization, a United Nations body, has focused its
limited resources on ridding the world of the most egregious abuses, such as child exploitation and prison labor, but lacks the teeth to have much effect.
"The world is sort of where it was at the end of the 19th century, when there were robber barons and ruthless competition and consolidation and then the pendulum swung back at the national level and governments stepped in to regulate
capital," said Richard Appelbaum, a professor of international studies at UC Santa Barbara. "Businesses are multinational today. What is the framework for regulating businesses globally?"
There is no shortage of ideas. Some activists have pushed for the establishment of a global living wage that would vary from country to country but would guarantee workers a subsistence salary. Labor advocates also support the
establishment of global standards for workplace safety, environmental protections and worker rights.
Others would like to see the WTO or another body enact regulations to prevent large countries or companies from dominating crucial industrial sectors or key markets within the global economy.
But in addition to opposition from the business community, resistance also comes from the nations that stand to benefit. Although governments recognize the threat to their economies and workers, they are loath to give up their ability
to control labor rates, working conditions or competitive practices.
Poor countries, whose workers are the most vulnerable to exploitation, have fought efforts to include tougher labor and environmental standards in trade agreements for fear they would be used by wealthier countries as protectionist
In any case, clothing factories are increasingly in the control of Asian conglomerates that operate with fewer restrictions on operations at home and abroad than their U.S. counterparts.
Multilateral agencies have begun stepping in to help. The World Bank is providing technical assistance and aid for the modernization of ports and highways in countries trying to boost exports, and the International Monetary Fund is
helping governments that suffer a budgetary shortfall because of a sharp shift in trade patterns.
The Bush administration is taking steps to shore up vulnerable economies in Central America and the Middle East with trade pacts that provide expanded access for apparel. The United States also faces pressure to follow Europe's lead and
remove tariffs on goods from struggling Muslim economies and low-income Asian countries such as Cambodia and Nepal that face tariffs as high as 32% on certain items.
In Cambodia, with U.S. support, the government is working with the International Labor Organization on a program to improve working conditions in apparel factories.
The hope is that big name brands will stay put and pay a little extra to support fair labor standards and reduce the possibility of becoming ensnared in a sweatshop scandal. That effort has won the backing of socially conscious U.S.
retailers such as Gap.
If that fails, as many experts predict, the outcome for Cambodia and others in the developing world could be bleak.
"There is nothing else for these people," said Robin Rosenberg, a Latin American trade expert at the University of Miami. "You take away the garment industry, and it's going to be a natural disaster like Hurricane Mitch."
Marshall reported from Asia, Iritani from Africa and Dickerson from Latin America.
[-back to options at the top(*1)]
January 16, 2005 Los Angeles Times
A WORLD UNRAVELS
Made in L.A., for Now
Clothing firms cope with a global industry that is more competitive than ever
By Leslie Earnest, Times Staff Writer
Koos Manufacturing Inc. illustrates what has gone wrong for U.S. clothing manufacturers — and what can, sometimes, go right.
A couple of years ago, the Southgate company's factory was cranking out 200,000 pairs of private-label jeans a week for some of the largest apparel chains in the country.
But profit margins were for the most part thin. Owner Yul Ku said retailers pressed him for lower and lower prices until he refused to budge, and they took their orders elsewhere.
Today, Koos Manufacturing's weekly output is down to about 35,000 pairs — of expensive, fashionable jeans that sell for as much as $170. And though the factory's assembly line is a lot smaller than it was in 2003, business is healthy
enough that Ku plans to begin making two more lines of denim next month, one that will command as much as $250 a pair.
Even now, as the clothing and textile industry is roiled by the end of 30 years of import quotas, "there will be survivors," Ku said. "We're one of them."
Across Los Angeles County, clothing companies are expecting to hang on — or do better — as the global apparel trade becomes more competitive than ever.
These companies have carved out niches in high- fashion and specialized production, with an emphasis on fast turnarounds, that could keep them in the international game.
Factories and sewing shops can crank out, within weeks of a designer's vision, cutting-edge fashions for teenage girls and young women. Workers in cities such as Vernon, Commerce and Gardena turn out the vast majority of the nation's
trendiest high-end jeans, including 7 for All Mankind, Citizens of Humanity and Paper Denim & Cloth.
The pressure on the local industry, though, can't be denied. The expiration of the import quotas Jan. 1 has empowered some cut-rate producers, principally China, and prodded others, notably the tiny island of Mauritius, to tweak their
manufacturing strategies to remain competitive — possibly at L.A. County's expense.
So far, China is primarily focused on the mass production of moderately priced items. But some people in the industry believe it won't be long before Chinese factories will be able to make it all, including $300 jeans.
"If they want to," said Joe Rodriguez, executive director of the Garment Contractors Assn. of Southern California, "they could wipe out the whole industry."
Los Angeles County — the largest clothing manufacturing hub in the nation — is no stranger to the tumultuous forces of globalization.
For decades, U.S. retailers have been chasing lower-cost suppliers around the world. The loss of apparel jobs accelerated after 1994, when production moved south of the border after passage of the North American Free Trade
L.A. County's apparel manufacturing base has shriveled to 61,400 jobs, 41% fewer than in 1996, according to the Los Angeles County Economic Development Corp. Now, with the quotas' expiration, many predict that the job losses will
accelerate, though there are widely differing opinions about how swiftly and to what extent.
To be sure, Los Angeles isn't as vulnerable as the Southern U.S. Textile manufacturers there spent the most political capital trying to persuade Washington to maintain some forms of protection against economical, efficient factories in
China, Bangladesh, Honduras and other developing countries. Factory workers in the Carolinas are expected to take the biggest hit from the competition unleashed by the end of the quotas.
The quotas had limited the amount of apparel and textile products that could be imported into North America and Europe from any one country, forcing buyers to distribute their orders around the globe. Without restrictions, buyers can
more easily shift their production to the cheapest supplier — which certainly isn't Los Angeles.
In Los Angeles County, a woman who stitches a skirt earns as much as $15 an hour, and even an undocumented worker employed by an unlicensed contractor can make $7. In China, her counterpart pulls in 68 cents to 88 cents.
But as superior as her pay might be to the going rate in the manufacturing Goliaths of China and India, a seamstress in Los Angeles is on one of the lowest rungs of the economic ladder, without health benefits and probably not
The end of the quotas that gave developing nations a leg up — and that gave apparel workers in the United States some shield from the competitiveness of the international economy — may well mean that "the poorest of the poor are going
to be left with an even more difficult struggle for survival," said Edna Bonacich, a UC Riverside professor and coauthor of the book "Behind the Label: Inequality in the Los Angeles Apparel Industry."
"The more manufacturing we lose," she said, "the more destitute people we have."
Even the thriving denim business is a fraction of what it was in the early 1980s. As it is, premium denim represents a small portion of the $11-billion U.S. jeans market, and a lot of that market is supplied by foreign factories.
But about 85% of high-end jeans — selling for $120 and more — are sewn in L.A. County. Manufacturers of premium denim are banking on buyers' willingness to pay top dollar to safeguard them from the forces of free trade.
"Being a premium brand, it doesn't matter what we charge, so we can afford to make the jeans in America," said Rick Crane, the sales director for Koral Industries, which owns the 7 for All Mankind brand.
L.A.'s advantage is about more than money. It's also about the vibe.
"I can sit in a bar on Sunset and design the line" with inspiration from watching the local scene, said Adriano Goldschmied, a pioneer of premium denim who helped launch the Italian brand Diesel 25 years ago. "When I was in Italy, to
see something like that I had to fly for hours."
Just as important, Los Angeles boasts some of the world's most celebrated denim laundries, Svengalis that can transform plain Jane pants into hip fashion statements, perfectly faded and frayed.
In fact, the founders of the James Jeans lines, James Sway and his wife, Seun, moved from New York because L.A. County "is the mecca for high-end denim manufacturing," Sway said.
Here, he said, sewing contractors know how to make "lifting darted back pockets" — which give the appearance of a lifted derriere.
Local laundries, he said, also are adept at shading jeans so that legs appear longer and thinner and at sanding in "whiskers" (light horizontal lines in the zipper area) so that hips seem narrower. James Jeans' new, higher-priced line,
selling for about $180 a pair, employs what is called the "all in" method. That means using all techniques available to achieve a worn-in look, including applying oil stains and cigar burns.
Hollywood is a magnet too: James Cured by Seun initially was available only to celebrities. The line went on sale to the public this weekend at 10 stores, including Barneys New York in Beverly Hills and Villa Moda in Dubai, the Persian
"Any designer starting in L.A. has a leg up," said Gela Taylor, co-founder of the L.A.-based Juicy Couture brand, which creates velour sweat suits that sell for $185 and T-shirts that go for $60.
"New York is great," she said, "but right now the young, edgy, hot designers are coming out of L.A."
At Koos Manufacturing, the 700 employees at the pristine factory start from scratch, unloading piles of denim from delivery trucks. The material is cut and sewn and passed on to be sanded, ground, stonewashed and baked. Along the way, a
screen-printed pocket lining is inserted in some jeans. It reads: "Made in Southgate (somewhere in California)."
The factory can turn out a sample in 24 hours, and its two-story warehouse is packed with finished products.
Ku explained the response time: "Customers call up," he said and then snapped his fingers.
Rapid production is a theme in L.A.'s garment industry and one that gives Southern California an edge over China and other manufacturing centers, at least for now.
Designers and retailers want new styles and variations to appeal to fast-changing tastes, and they demand that the latest slinky skirts or knit ponchos hit stores before the hot trend chills.
American Apparel in downtown L.A. — whose seven-story factory is topped with a banner blaring "American Apparel is an Industrial Revolution" in red letters — employs machines that can cut eight T-shirts every 9.2 seconds.
The factory has 75 knitting machines that cost $45,000 each and plans to double that number this year, said Marty Bailey, vice president of operations. As it is, if someone orders 1,000 T-shirts at 2 p.m., he said, he can ship them by
5:30 that evening.
Bailey keeps 1.8 million pounds of finished fabric on hand at all times to make sure he can turn out products quickly. About 3,100 people work two shifts at American Apparel, which is expanding its casual cotton apparel lines and
opening stores to help build its brand.
On a tour of the factory, Bailey paused where an assembly line of five men and three women was putting together a shirt.
Passing cloth down the line, each performed one task: hemming, sewing the shoulders, stitching the neckline, adding the label, strengthening the shoulder seams, inserting sleeves and trimming dangling thread. A ponytailed woman then
scrutinized the final product, tugging at the fabric and measuring the gap at the neck and the width of the hem.
The process took mere minutes. The team moves so briskly, Bailey said, that it can finish about 2,200 pieces a day.
Speed is essential for Esperanza Hernandez. The 41-year-old seamstress works nine hours a day, five days a week, and sometimes on Saturday. Her boss takes orders from various companies, including Forever 21, an L.A.-based retailer that
sells clothes to trend-hungry teens.
"I have to produce a certain amount of clothing," Hernandez said, "so I have to work rapidly."
But the Chinese are increasingly fast themselves, thanks to billions of dollars in foreign investment and technological advances in production techniques.
"I hear that China is right now able to deliver garments in six to eight weeks, starting from fabric to finished goods — and that's what it takes to do it in L.A.," said the owner of one local factory that employs 150 workers who make
women's tops. He is considering not renewing his lease.
"We may have to shut down," said the contractor, who asked not to be named because he feared it would spook his customers. "We're dinosaurs, on the verge of extinction."
Geographic diversification is one answer. Koos Manufacturing, for instance, has a plant in Mexico, where 1,200 workers make jeans for the Buckle clothing chain.
But the reality is that China's lure is difficult to resist, even for disciples of Los Angeles. James Jeans' co-founder may have moved to L.A. to take advantage of its hip denim laundries, but that doesn't mean he is immune to a
"If they can do it better and cheaper overseas," Sway said, "I have no choice but to go overseas."
In fact, Sway said, he had been sending bits of work to China to monitor the technical progress of companies making jeans there — just in case. And the Chinese are getting better.
"I'm already seeing season-to-season changes that are remarkable," he said. "It's like an arms race in a way."
Times staff writer Evelyn Iritani contributed to this report.
[-back to options at the top(*1)]
January 16, 2005 Los Angeles Times
A WORLD UNRAVELS
Far-Off Mauritius in Local Territory
By Evelyn Iritani, Times Staff Writer
PORT LOUIS, Mauritius — For a glimpse of their future competition, Los Angeles garment makers shouldn't look just at the booming factories of southern China.
Here on this tiny tropical island in the Indian Ocean, factory owners are spending millions of dollars to hire designers, upgrade machinery and build new spinning and fabric mills.
Their goal: to move out of the mass-production T-shirts and sweat pants that are China's strength and into the more expensive, quick-turnaround market that is Los Angeles County's bread and butter.
Mauritians reckon that they will be able to produce trendy shirts and slacks so efficiently that they could be airfreighted to customers in Los Angeles or New York and still cost less than anything stamped "Made in the USA."
J.C. Penney Co., for one, is a believer.
"If they can move and turn very quickly, and have good airfreight logistics to whatever point in the U.S., they can find their reason for being," said Peter McGrath, president of Penney's purchasing arm. "If we can get the price cheap
enough, we can airfreight."
Mauritius, with a population of about 1.2 million, developed its textile and clothing industry during the era of import quotas that helped small players compete for orders from buyers in North America and Europe.
The quotas began to be phased out in 1994; the last of them expired Jan. 1. And in the last two years, Mauritius has lost nearly 20,000 apparel jobs as work moved from less competitive countries like itself to huge and highly efficient
rivals such as China and India.
But people in the clothing business here believe that the industry on the island can endure if it transforms itself, specializing in fast work or particular fashion trends. And Mauritius' success could come at the expense of factories
in Los Angeles County whose profitable domain is express production.
The sample books at Socota Textile Mills Ltd. tell part of Mauritius' story. Just a few years ago, sales manager Razia Sayed-Fakim would have been hauling around books filled with page after page of plain fabrics, one page showing
different shades of blue, another browns and beiges.
Today, Sayed-Fakim's sample sheets are ablaze with colors, textures and patterns. Customers see fabrics in collections, which may include a dozen or more different patterns or color combinations.
"We want to bring everything to the customer," she said. "We want to be everywhere, and we want to be able to do everything for them."
Those customers — including Marks & Spencer Group, Abercrombie & Fitch Co., Carrefour, Gap Inc. and Liz Claiborne Inc. — demand more than ample color options. They want ever-speedier delivery so they can turn over their goods more
often. So Socota Textile is aiming to become just as fast as producers in Los Angeles.
The mill recently cut its delivery time to the United States in half — from three months to five or six weeks — and plans to shave an additional week in the coming year by making use of more efficient machinery and advanced weaving
"If the product is right, a buyer can afford to pay 15 or 20 cents more a garment to have it airfreighted," said Olivier Stekelorom, Socota's general manager.
At Compagnie Mauricienne de Textile, known here as CMT, owner Francois Woo has invested $50 million in the last five years in a new factory and spinning mill that employs 6,000 and is on track to produce 70 million garments a year.
CMT headquarters is a building with a soaring ceiling and open design. Upstairs, there is a huge fabric library, a design center and a showroom that looks like a high-fashion boutique, the walls lined with racks of colorful T-shirts.
The racks are a sea of mauve and blue, popular colors for the coming spring. CMT's U.S. customers include Eddie Bauer Inc., Gap and Foot Locker Inc.
On the factory floor, employees, who make about $100 a month, sit in ergonomically designed chairs plucking garments from automated assembly lines, which move the product from a motorized track suspended from the ceiling. Although the
automated workstations are costly — $6,000 to $7,500 apiece — they can increase productivity by 30%, according to the company's managing director.
Speed is of the essence. Turnaround time on huge commodity orders has gone from six months to three; for fast fashion, it is two to four weeks. By spinning his own yarn for fabric rather than importing it from China or India, Woo has
cut five to six weeks off his production time.
Now the Mauritian factory owner is looking for other locales to set up shop so that he can offer buyers more than one low-cost production platform and can better compete with China.
Globalization "is a real fight," Woo said. "We have to fight back."
And if you can't fight them, join them. CMT is building a new factory that will open in 2006 — near Shanghai.