The collapse at a Bangladeshi factory last year shed light on the egregious conditions laborers who make clothing for companies like Gap, Wal-mart and H&M spend each day in. Levi Strauss & Co., the popular American jean maker, takes another approach to outsourcing its labor.
“We audit our plants and we work very closely with our partners to make sure they’re meeting our standards,” says Levi’s CEO Chip Bergh. “And we’ve pulled business in the past where manufacturing sites weren’t up to snuff.”
The majority of Levi's clothes are made abroad after the company closed down its last two plants in 2004 (the company maintains a few contracts with U.S. based suppliers). Levi's says it tries to make sure its suppliers abroad abide by the same labor standards that are in the U.S.
“Going back 20-some odd years the company implemented what we call ‘terms of engagement’ and that was really focused on the safety practices and the manufacturing practices in the plants,” says Bergh. “The next level of our terms of engagement is focused on our workers' well-being…most of the workers are women, many of them have children and they’re not well educated so we’re focused on making sure they have basic medical, and access to education for their children and things like that.”
Bergh discovered that providing benefits and safety to workers comes at a cost to the company.
“There’s about a 3-to-1 return for our investment," he notes.
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