Slick and sexy, Guess?, Inc.’s long-cultivated image began turning seedy last summer. First, five contractors for the $500 million clothing empire were cited by California inspectors for illegal home-sewing operations. Then a class-action suit accused Guess and 16 subcontractors of paying their mostly immigrant workers less than minimum wage. Ornery picket lines spread from Guess’s shop on Beverly Hills’ Rodeo Drive to its 66 other retail outlets across the country. And in a final one-two punch, the National Labor Relations Board forced the firm to rehire employees it had fired for union sympathizing, while the U.S. Labor Department nudged it off the “Trendsetter” list of manufacturers who forswear sweatshop practices.
Last week, however, the jeans giant, known for its advertising “attitude,” turned surly. Stunning its critics, Guess revealed that in the past year–just as it was fending off an organizing campaign by UNITE, the nation’s largest garmentworkers’ union–the company was quietly shifting about 40% of its manufacturing to Mexico and South America.
Only three years ago Guess was making 97% of its garments in the U.S. But Guess president Paul Marciano–one of four immigrant French brothers who founded the company in 1981–claims the job exports have nothing to do with the UNITE campaign. In the early 1990s, charging $60 to $70 per pair, Guess was the top designer-jeans merchant. In the past two years, high-end labels such as Calvin Klein, Tommy Hilfiger and Ralph Lauren–many of them manufactured abroad–moved aggressively into denim, pricing their jeans at $48. Guess sales plunged, and Marciano says he had to cut labor costs. “If you don’t stay competitive, they will kick you off the map,” he says. The shift may already be showing results: Guess’s profits improved slightly for the first nine months of 1996 with $40.5 million in earnings on $411.9 million in sales.
In Mexico the company’s stitchers earn $20 to $40 a week, compared with about $5 an hour for their Los Angeles counterparts, who are overwhelmingly Latino immigrants. The difference shaves up to $2 off the cost of each pair of jeans and explains, in part, why U.S. apparel jobs have dropped 43% since 1973.
Union leaders reacted to last week’s revelation by filing charges with the NLRB. “Jobs are disappearing, and if American workers do not fight back, economically and politically, against Guess’s blackmail, they are hapless victims,” said UNITE campaign director David Young. U.S. law forbids companies from moving work abroad to avoid a labor-organizing campaign. UNITE is planning more legal action, boycott activities and protests on 300 college campuses, a key Guess market.
Working conditions in Guess’s U.S. sewing shops may be no worse than in many other apparel factories in Los Angeles, although that’s nothing to brag about. But the company has become a poster boy for a renewed antisweatshop movement. Meanwhile, moves are afoot in Congress to hold manufacturers liable for their contractors’ labor violations, and a presidential task force on sweatshops will soon release its report. Will Guess’s hard-nosed exodus blunt efforts to improve the plight of U.S. garmentworkers? Not likely. “We’re not going to roll over and play dead,” AFL-CIO president John Sweeney says. But then again, neither is Guess.
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