Understanding China’s Success

by admin Posted on April 27, 2013

Understanding China’s Success:

China’s ranks #1 as the world’s the world’s largest garment exporter with 38% global market share.  Bangladesh ranks #2 with a 5% market share.  We all acknowledge that China dominates the global garment export market.

However, few of us understand the underlying conditions that resulted in China’s premier position.

We are told that government subsidies, notably an undervalued currency provides China’s garment exporters with a unique advantage over its competitors. There is no question that the Chinese government ensures that its currency is undervalued. However, the data clearly shows that there is no relationship between changes in the RMB and market share.

We re told that China’s advantage lies in its modern and extensive infrastructure, education, banking system, and supporting industries that is far superior to any of its competitors. Once again, there is no question; China today is far better equipped than any of its competitors.  However, once again the data shows a very different picture

These advantages did not precede China’s dominance of the garment industry.  In a real sense they were the result of industrial development.

China’s garment industry developed in the in the late 1970s and 1980s — immediately after the end of the Cultural Revolution.  This was a time when the Chinese economy was in a state of collapse.  Infrastructure was primitive.  The great road More...

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Posted in China-Greater China, Factory Strategies, Garment Factories | Tagged , , , , , , | Leave a comment

Cambodia: Workers Rights versus Workers Benefits

by admin Posted on March 15, 2013

A recent report issued jointly by the  Worker Rights Consortium and Stanford Law School claims that serious deficiencies exist in the ILO’s Better Factories Cambodia (BFC) program.  This news is no news at all.  In fact it is surprising only that it has taken so long for people to recognize that BFC is a total failure.

I would go further and suggest that the only change brought by BFC was to increase the amount of corruption in an already totally corrupt country.

The problem is not poor implementation or insufficient monitoring but rather that the entire program was and still is flawed.

Providing workers the right to organize was an important and successful first step, but is totally useless in itself.  The good news is that today Cambodia has a flourishing union movement where every Cambodian garment factory has at least one union.  The bad news is that most have four or five unions, each of which spend most of their time squabbling

  1. Unions must be transparent, providing audited statements of income an expenditures.  For example, while it is only reasonable that union leaders attend conferences and courses of study,  traveling to Paris for 6 months at union expense is too much of a good thing.
  2. Unions and management must have collective bargaining.  Someone must be empowered to negotiate for each side.  Worker-management discussions must not become multi-partite negotiations where management is forced to negotiate with More...

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The Myanmar Garment Industry: A Very Short Study

by admin Posted on February 28, 2013

Three weeks ago I completed a short study of he Myanmar garment industry during which time I visited a number of factories and held a series of discussions with the leaders of the Myanmar Garment Manufacturers Association (MGMA ) as well  the ILO other interested organizations and some leading academics.

There is no doubt that the local industry faces serious challenges:

Not one of the factories I visited would meet minimum standards of compliance. Among the more serious problems is the employment of underage children albeit as apprentices; excessive overtime, sometimes reaching 12-hour days; and seven day work weeks.  There are also structural problems such as improper layouts, poor lighting, and lack of machine guards, to name but a few.

At the same time, the local industry, having been cut-off from both the U.S. and EU markets, has little conception of the state of the global garment industry. For example, in the few instances where I was able to see cost sheets, I calculated that CM prices were below 5¢ per minute.  To put this into context, a factory in Myanmar is paid less than the same factory in Bangladesh.

Finally local factories have little or no access to capital, with the result they are virtually CM operations, controlled by third-county middlemen who provide the necessary materials while taking the lion share of the profit.  The sooner the industry rid itself of these parasites the faster it can begin the development More...

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Crossing the Line

by admin Posted on January 14, 2013

The global garment industry is very hard:  not hard as in difficult, but rather hard as in ruthless.  We operate is some of the poorest countries in the world where the value of human life approaches zero and where corruption on an unimaginable level is commonplace.

Nevertheless, despite all the difficulties we garment professionals manage to maintain some code of ethical behavior.  To survive, each of us creates an invisible line that separates us from the abysmal cultures in which we operate. Cross that line and we become them.

On 24 November, When the Tazreen Fashion factory located in Bangladesh burnt to the ground killing 112 workers and injuring 200 others, it became clear that at least some of us had crossed that line.

The problem is neither the fire nor the deaths and injuries.  That is part of business as usual. We all know that many if not most of the factories in Bangladesh are deathtraps with locked grated windows, impassable stairwells blocked with fabric and old garments, and fire fighting equipment that for decades have not been inspected much less put in working order.

The recent Bangladesh government investigation that concluded the fire was an act of arson is a time-honored solution dating back eighty years: why take responsibility when we can blame the whole thing on some crazy communist Dutchman.

The problem is not that the arson story is a pack of lies.  That too is part of business as usual.  After all we have More...

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