Disney and Cutler want to cut and run

By Ray Laforest, Haiti Progres, This Week in Haiti,
Vol. 15, no. 21, 13-19 August 1997

Washington has long extolled the transformation industry -- i.e. cheap-labor assembly sweatshops -- as the engine which could drive development of the Haitian economy. But the limits of such development became brutally clear last month with the announcement that H.H. Cutler, the largest manufacturer of Disney products in Haiti, plans to close down its Port-au-Prince operations to find cheaper labor in the Far East.

The possible pull-out comes just as the U.S. government and international financial institutions like the World Bank and International Monetary Fund (IMF) are stepping up their pressure on Haiti to accelerate reform of its economy to rely more on companies like H.H. Cutler for investment and jobs.

In recent years, the Walt Disney Company has, by extension, become one of the largest employers in Haiti via its two main sourcing agents: L.V. Myles and H.H. Cutler. These clothing contractors set up in Haiti to draw on the large pool of unemployed and have allowed Disney, Cutler, and retail stores to make super-profits off the misery of Haitian workers.

For example, a study conducted during the summer of 1995 by the National Labor Committee (NLC), an investigative human rights group, revealed that the majority of factories making goods for Disney were not paying the minimum wage, with a significant number paying as little as 11 cents an hour. It took a combination of workers protests and an international pressure-campaign to force Disney's subcontractors to pay the Haitian minimum wage of 28 cents an hour (the lowest in the Americas) and to provide potable drinking water and clean toilets.

In the United States, H.H. Cutler used to employ 2,450 workers to manufacture garments for Disney, Nike, Fisher-Price and Warner Bros. at an average wage of more than $7 an hour. But in recent years, H.H. Cutler, a division of VF Corporation -- one of the world's largest apparel companies -- has moved most of its operations overseas to Haiti and other countries including the Dominican Republic, Jamaica, El Salvador and Mexico. Cutler's workforce in the U.S. is now less than 700 workers, but in Haiti, it employs 2,300 workers toiling in 9 factories for about $2.24 a day.

Disney and its contractors dispute the claims of Haitian workers that, under the piece-rate system, they usually make only 28 cents an hour because quotas are impossible to meet or require an excessive work pace. For example, workers at N.S. Mart and L.V. Myles must attach 1600 collars on Disney T-shirts, or close 1600 shirt shoulders, in 8 hours. They have no cafeterias, endure extreme heat in airless hangars, and are subjected to constant threats, verbal abuse, and sexual harassment. They are laid-off to accommodate production shifts and are fired for trying to organize or join labor unions.

Disney workers in Haiti are paid between .25% and 2% of the retail price of the garments they sew. For example, workers get paid 6 cents to make 101 Dalmatian outfits that sell for at least $19.99 in the US (about .33% of the retail price). In an 8- hour day, an assembly-line of 40 workers, at Classic Apparel, produces 2,400 Lion King children outfits with a retail value of about $29,000, selling at major retail chains like Sears or J.C. Penny. Those workers are paid a grand total of about $110.

Typically, transportation and a small breakfast or lunch will cost the workers about $1.60 which represents almost 3/4 of their income, leaving them with practically nothing to pay for rent (about $7 per week) or care for their children. Their everyday reality is dominated by the need to borrow in order to pay back older debts.

Over the past two years, Disney subcontractors have responded aggressively when challenged by Haitian workers demanding respect, a living wage, and better working conditions. For example, when workers formed a union at Classic Apparel last summer, the company threatened them by saying that H.H. Cutler would cut back its orders by 40% bringing layoffs. In December 1996, six workers were dismissed for protesting the firing of a union organizer at B.F. Apparel Manufacturing, a factory subcontracted to produce garments for the Waterbury Garment Corporation, another Disney clothing contractor. More than 30 workers were terminated at the L.V. Myles plant in Port-au-Prince at the beginning of May when flyers were distributed inside the plant to protest unbearable working conditions and substandard wages. In 1995, when the minimum salary was raised from 25 to 36 gourdes a day to offset the devaluation of the local currency and rampant inflation, Disney subcontractors also raised their workers' production quotas by as much as 133%, more than recouping the pay increases.

In contrast, Michael Eisner, the CEO of the Walt Disney Company, paid himself $97,600 per hour in 1993. In 1996, Eisner received salary and stock options worth over $187 million. It would take more than a thousand years for a Disney worker to make the equivalent of 1 day of Michael Eisner's 1996 salary.

In early July 1997, facing mounting pressure from Haitian workers and international criticism, H.H. Cutler announced its intention to pull out of Haiti in September 1997 to relocate in China and Indonesia where workers are paid as little as 13 cents an hour. The company says the move is forced by a downturn in sales. The business is very quick and fast-paced, and we are reacting to the pressure of the market, Tom Austin, president of Cutler, told the Grand Rapids Press. We're trying to grow our business and get it made in the best place.

However, the NLC disputes this saying that H.H. Cutler's sales figures for this year are no different from last year's during this period. The pull-out would threaten the jobs of 2,300 Haitian workers, about 10% of the Haitian assembly sector workforce.

The move by Cutler has provoked a sharp response from two of the principal organizations in the U.S. addressing the issue of Disney's sweatshop abuses.

The National Labor Committee has stated that we need to write, fax, call and send delegations to Disney and H..H. Cutler -- everything we can do -- urging them not to pull out of Haiti and the U.S. The NLC has also called for a National Day of Conscience to End Sweatshop Abuse on October 4, 1997 and a Holiday Season of Conscience.

Furthermore, the NLC has warned that if Disney and Cutler go ahead with their plans to pull out of Haiti and the U.S., they will make themselves one of the focuses of the October 4 National Day of Conscience. During the Holiday Season of Conscience, people would be asked to avoid giving business to companies that become the focus of the National Day of Conscience. Last year, the NLC launched a very effective shame campaign of which Kathie Lee Gifford and Walmart were the focuses for their involvement with sweatshops in Honduras.

Meanwhile, the Disney/Haiti Justice Campaign (DHJC), a coalition of grassroot groups and individuals, is considering calling for a boycott of both Disney and H.H. Cutler products if Cutler goes through with its plan of pulling out of Haiti. The DHJC, which has sponsored numerous lively street demonstrations against Disney in New York City, has also called for vigorous protests against this latest attempt of Disney/H.H. Cutler to cut and run from Haiti.

Also in favor of a boycott is Batay Ouvriye (Workers Struggle), the independent workers center in Haiti which has been in the forefront of organizing employees at Disney subcontracting plants. The DHJC is continuing discussions with Batay Ouvriye on a coordinated response.

People of conscience must let H.H. Cutler and Disney know that these practices will not be condoned by US consumers, the DHJC wrote in a recent flyer. U.S. corporations must respect the rights of workers abroad ... and must also pursue all avenues to maintain jobs at fair wages here in the U.S.

While capital cherishes its right to move as it sees fit in search of cheap labor around the globe, it seeks to restrict and imprison any workers also seeking freedom of movement. When destitute Haitians take to the sea to try to take their only capital -- their labor -- to another country, they are intercepted, jailed, and mistreated.

Multinational corporations cannot have it both ways. Factories cannot be allowed to run away whenever workers demand a union or better wages and work conditions. Meanwhile, workers are forced not only to stay in their infernal conditions, but also to tighten their belts as money lenders demand austerity measures from already destitute economies.

Through shame campaigns and a possible consumer boycott, groups like the NLC and the DHJC will continue to push for the rights of hungry Haitian workers and against the flight of corporations hungry only for profit. As the NLC stated in a letter to the Disney Company: The Haitian people desperately need investment and jobs, but they need jobs with dignity, under conditions which respect their basic human rights, and which pay wages that allow them and their families to survive.