Friday, May 11, 2007

The end of the road for Just Garments

For more than a year, the Just Garments clothing factory in El Salvador has been struggling to stay afloat. This worker-owned factory, dedicated to paying its employees a just wage, has closed for lack of a sustainable source of orders. The factory closing has not been without its own swirl of controversy. Here is the update released from the organization Crispaz:

In the past couple of weeks many of you have heard reports of the current crisis that has engulfed the Just Garments factory here in El Salvador. We wanted to inform people about what's been going on with JG, and let people know what are some probable next steps.

As of this writing (May 7), Just Garments remains chained shut. This was not the decision of workers or management at JG; it was the decision of the factory's landlord Carlos Safie Siman on this past April 2. Until workers regain entry to the plant, it will be extrememly difficult to resolve any of the outstanding problems. The company maintains that the lockout is illegal and has filed suit to regain access to their machinery.

At this point most workers at JG are resigned to the fact that the lockout likely represents a final blow and that the plant will probably not re-open. There is great sadness amongst the STIT union and the many workers who invested sweat and tireless energy to the success of the JG project over the past four years.

Financial problems at JG were rooted in the factory's difficulty in contracting major name brands. It is believed that these brands stay away from JG due to its unionized workforce. A unionized alternative to the sweatshop model in the end proved too dangerous for the brands to accept. They simply would not contract with JG.
This left JG with two less attractive options: subcontracting orders and seeking donors and investors to break into the fair trade market. Subcontracting is poorly paid work where a sweatshop will take on emergency or overflow work that other local factories can't handle or don't want. While subcontracting can alleviate short-term liquidity issues by keeping money in the pipeline, it is virtually impossible to sustain a plant through this work alone, especially a worker-run shop dedicated to treating and paying its employees fairly.

Access to the fair trade market, on the other hand, brings a modestly better income, but requires higher start-up and promotional costs. Getting the word out about an alternative costs money. Producers tend to sit on products in storage, while they work at convincing large scale buyers why they should pay for a justly made product. The generous donations received from many unions and individuals at Just Garments were not, nor were intended to be, a substitute for production-related income. The thousands of people who bought t-shirts and other Just Garments garb could not cover for the lack of large scale contracts. Plans to coordinate with an investor--SEAC International--to open up the fair trade front did not work out as had been envisioned.

It is not hard to deduce that building an established alternative to the basic sweatshop model requires higher up front costs and more liquidity. This is exactly the problem that JG faced. As time went on, liquidity problems forced JG management into some tough decisions: pay rent or workers' salaries? the electric bill? thread and fabric? workers pensions? There simply wasn't the cash necessary to meet the demands.

As you can imagine, that sadness inspired by the lockout was compounded by a National Labor Committee e-mail sent on Apr. 19. The NLC e-mail alleged labor violations at JG and was based on an earlier statement released by the IDHUCA, Las Dignas and others. The NLC and IDHUCA/Dignas statements were based on the declarations of a group of 19 ex-employees who have not received wages, benefits and severance pay. Just Garments negotiated an agreement with the group on Feb. 12, but missed an agreed upon payment last month.

Likewise, the STIT union, which represents most of the remaining 26 workers at the plant, has signed an agreement commiting JG to pay all back wages, benefits and severance pay. The STIT is committed to working with the company to resolve any problems that may arise.

In our discussions with JG leadership, it is clear that JG is committed to complying with their agreement with the group of 19 workers, those within the STIT union and other unaffiliated workers. While cash scarcity is preventing JG from meeting these obligations in the short term, the company in no way has abandoned its committment to the values of fairness and justice that marked its tenure. Likewise, we have not seen evidence of an effort to deny workers what they are due. To the contrary, we have witnessed an understanding of worker's frustrations, a willingness to hear concerns and a good faith effort to resolve outstanding obligations.

It is our understanding that JG and the STIT hope to re-enter their factory, reclaim the machinery, liquidate, and meet the financial obligations that they have with workers and other creditors.

We welcome folks to review the following documents and arrive at your own decision.


Joe said...

That's sad.

El-Visitador said...

It is incredibly difficult to make a business prosper, and most businesses end up failing or greatly diminished from what they once were. Older readers may recall once great brands such as Philco, PanAm, RCA, Ford, Western Electric, Studebaker, American Motors Company, etc.

In El Salvador, many maquilas have failed, impoverishing their owners and workers.

Truthfully, Just Garments was always a long shot. Sad, but true

- * -

What's funny is that the report is oh ever so sympathetic to the company, which has failed to pay the extremely onerous severance imposed by law on all Salvadorean employers.

The workers have gotten a fricking IOU. Compare with the screams of unfairness and injustice whenever broke private owners try to settle with former employees or ask for extra time!

Anonymous said...

While I'm sorry to see the company fold, I did try to order from them in December of 2005 and they did not even acknowledge my order until November of 2006, when they got a new "coordinator." I suspect that they were not a very well-managed company, to say the least.

Lourdes said...

Where they were all the organizations who now criticize to Just Garments, when their workers needed aid to fight against the brand Superior Uniform Group to obtain better wages?.

I see that STIT, CEAL and other organizations supporting Just Garments, they are fighting against the brands. Easy is criticize, very hard is build a alternative model.

Grupo organizado de Ex trabajadoras de Hermosa. said...

Dear Mr. Kernaghan,

Warm greetings from the organized group of former workers of Hermosa Manufacturing.

To be quite honest, we want to communicate our surprise to learn of the public attacks against CEAL and STIT which have been circulating electronically and which have been endorsed by the organization that you represent.

We knew well in advance that the crises generated in the Hermosa Manufacturing S.A. de C.V. (mayo/05) in which our labor rights were violated, which brought us to the point of needing to organize as a union, and which was the excuse used by the owner to close the factory with all the illegalities that this implied. Your representatives (CNL), had knowledge of all these serious violations that we, the women and men who worked in this maquila were living, but never gave us any type of support during the 24 months that we were in crisis which has come to the attention now of the national and international communities.

Today we can recall these events after having survived these attacks on our basic human rights, only because of the support of unions and national and international solidarity organizations, including CEAL and STIT, organizations who without trying to profit from our precarious situation, offered their valuable collaboration, support, consultation and who accompanied in our demonstrations in the streets; support that help us to set a HISTORICAL PRECEDENT when for the first time in El Salvador the owner who robbed our money that was withheld from our checks for social security and pensions was sued.

Mr. Kernaghan, we hope that you can reflect on this situation and instead of contributing to the destruction of very important organizations in our movement, we forge unity for the sake of the strength of our organization.

In light of what we have written here we request to you withdraw the assaults against CEAL, STIT and the person of Gilberto García, because this strengthens the detractors who are in the government, big business and organizations that are not recognized and respected in the country; those who have reason to celebrate this situation.

Grupo organizado de Ex trabajadoras de Hermosa.

Anonymous said...

Lourdes has it wrong. Superior gave just work and paid them for it. Even all the stuff on the internet says they gave them work and paid them well for it. Why speak badly about those that actually tried to help Just even when they were just screwing their own people out of a living wage and embezzling their money.