LEVI'S EXEC: CARIBBEAN SHOULD INVEST IN ITSELF

Byline: Jim Ostroff

MIAMI--Caribbean countries must improve their infrastructure and education if their apparel manufacturers are to continue as vital sources for U.S. garment firms and retailers, a Levi Strauss & Co. official told the 18th annual Miami Conference on the Caribbean and Latin America.
John Ermatinger, Levi's operations and sourcing vice president, pointed out, "Geographic proximity, adherence to high-quality standards and the ability to meet quick turnaround deadlines are now the dominant factors" in sourcing for global competition.
While the CBI nations "are convenient and provide the quick order turnaround times to the U.S., they also face the same challenges as we do to remain competitive," Ermatinger said. "They have to invest in infrastructure programs--transportation, communications, electricity and water--education and worker training.
"In order to succeed, our competitive technologies require reliable communications systems and, obviously, workers trained to operate them," he told the conference, which winds up today.
Ermatinger did not specify which Caribbean nations most lack these facilities and training. Nonetheless, he made it clear that the San Francisco-based Levi's will work only with firms that meet both its production and human rights standards.
He noted Levi's recently revamped its production in response to retailers' demands. For example, Ermatinger said the company is working to fulfill all orders within 72 hours of receipt, and cut from 18 months to 30 days the time needed to bring new apparel programs to market and deliver goods ready for retail display.
He said computer technology is vital to "track consumer demand, fashion trends and retailers' needs."
Equally important, he asserted, is that all of Levi's 600 or so contractors worldwide adhere to its corporate "terms of engagement" for ethics, labor, worker rights and environmental policies. These terms require that contractors pay workers agreed wages, provide a safe work environment, permit free association to unionize, not harass employees and not use forced labor.
Ermatinger acknowledged that such practices will come under Congressional scrutiny next year when new trade measures are debated. But he said, "Market forces are driving this new accountability. Recent studies indicate U.S. companies have a significant competitive advantage by managing their business in a responsible and ethical way.
"Companies with strong corporate reputations are better able to influence consumers' purchasing decisions, to foster greater consumer and retailer loyalty, and consequently, enjoy higher sales and profits."
The Levi's executive added, "By cornering the world's best...work force, we will have a competitive advantage."
Ermatinger acknowledged the company has been stung in the past by media reports that some of its contractors did not abide by these standards. However, he said, "The guidelines are an early warning system and a tool for addressing problems before they adversely affect our business and, frankly, our reputation."
He said Levi's has beefed up its on-site audits of every contractor. But he continued, "These voluntary efforts should not become weapons that are used against well-intentioned companies by opponents of freer trade, or by governments that want to legislate codes of conduct.
"Instead," he added, "they should highlight American companies that contribute through training and investment, which is not just good for workers and the environment, but in our estimation, good for business."
--Fairchild News Service

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