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Wed Dec 5, 2012, 08:15 AM

Wal-Mart Nixed Paying Bangladesh Suppliers to Fight Fire (not financially feasible)

Wal-Mart Nixed Paying Bangladesh Suppliers to Fight Fire

At a meeting convened in 2011 to boost safety at Bangladesh garment factories, Wal-Mart Stores Inc. (WMT) made a call: paying suppliers more to help them upgrade their manufacturing facilities was too costly.

The comments from a Wal-Mart sourcing director appear in minutes of the meeting, which was attended by more than a dozen retailers including Gap Inc. (GPS), Target Corp. and JC Penney Co.

...

At the meeting in Dhaka, the Bangladesh capital, in April 2011, retailers discussed a contractually enforceable memorandum that would require them to pay Bangladesh factories prices high enough to cover costs of safety improvements. Sridevi Kalavakolanu, a Wal-Mart director of ethical sourcing, told attendees the company wouldn’t share the cost, according to Ineke Zeldenrust, international coordinator for the Clean Clothes Campaign, who attended the gathering. Kalavakolanu and her counterpart at Gap reiterated their position in a report folded into the meeting minutes, obtained by Bloomberg News.

“Specifically to the issue of any corrections on electrical and fire safety, we are talking about 4,500 factories, and in most cases very extensive and costly modifications would need to be undertaken to some factories,” they said in the document. “It is not financially feasible for the brands to make such investments.”

http://www.bloomberg.com/news/2012-12-05/wal-mart-nixed-paying-bangladesh-suppliers-to-fight-fire.html

9 replies, 677 views

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Reply Wal-Mart Nixed Paying Bangladesh Suppliers to Fight Fire (not financially feasible) (Original post)
The Straight Story Dec 2012 OP
Scuba Dec 2012 #1
CanonRay Dec 2012 #2
Art_from_Ark Dec 2012 #3
CanonRay Dec 2012 #4
Art_from_Ark Dec 2012 #7
LeftyMom Dec 2012 #8
Art_from_Ark Dec 2012 #9
hatrack Dec 2012 #5
Brickbat Dec 2012 #6

Response to The Straight Story (Original post)

Wed Dec 5, 2012, 08:23 AM

1. Much cheaper to roast and replace the workers.

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Response to The Straight Story (Original post)

Wed Dec 5, 2012, 08:32 AM

2. Whoever made that decision should be charged with criminally negligent homicide

and jailed.

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Response to CanonRay (Reply #2)

Wed Dec 5, 2012, 09:15 AM

3. The managers of the factory seem to be the most culpable

in this recent fire:

"Managers told us, 'Nothing happened. The fire alarm had just gone out of order. Go back to work,'" Ripu said. "But we quickly understood that there was a fire. As we again ran for the exit point we found it locked from outside, and it was too late."

http://www.news24.com/World/News/Bangladesh-factory-fire-the-deadliest-20121126

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Response to Art_from_Ark (Reply #3)

Wed Dec 5, 2012, 09:30 AM

4. Yes, but there's plenty of room in jail for their Wal Mart overlords

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Response to CanonRay (Reply #4)

Thu Dec 6, 2012, 12:01 AM

7. Wal-Mart claims that it had previously ended its relationship with the factory.

The factory is owned by the Bangladesh-based Tuba Group, and Wal-Mart had been buying through a distributor based in Hong Kong. The factory was making clothing for various brands and companies around the world. If the doors had not been locked, far fewer people would have died. There is plenty of blame to go around, but the biggest share goes to the people who had locked or blocked the exit doors.

"Our production manager, Mr. Monju, pulled down the collapsible gate on the third floor, forcing us to continue working. We pleaded with him to let us out, but Mr. Monju assured us that nothing was wrong and we should keep working. He told us not to listen to any rumors. He said again, ‘Nothing has happened, just keep working."

http://www.bloomberg.com/news/2012-11-26/at-least-124-killed-in-fire-at-bangladesh-garment-factory.html

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Response to Art_from_Ark (Reply #7)

Thu Dec 6, 2012, 12:08 AM

8. Clothing items from Wal-Mart exclusive brands were found in the ashes.

If Wal-Mart had severed their relationship those items would have been farther down the supply chain, not fresh off a sewing machine at the sweatshop where they were made.

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Response to LeftyMom (Reply #8)

Thu Dec 6, 2012, 09:03 PM

9. Maybe yes, maybe no

Remember that Wal-Mart is claiming that it recently severed its ties with the company that was acting as a distributor for the factory. The claim is that the distributor continued to provide Wal-Mart with clothing from the factory after Wal-Mart had told the distributor to stop selling it clothing from said factory. So with no other conduit for Wal-Mart exclusive brands, where is clothing that had already been made going to go?

The evidence is circumstantial, but not conclusive.

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Response to The Straight Story (Original post)

Wed Dec 5, 2012, 09:31 AM

5. " . . . a Wal-Mart director of ethical sourcing"

Yeah, I'll bet her hours are long and tiring!

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Response to The Straight Story (Original post)

Wed Dec 5, 2012, 09:32 AM

6. “It is not financially feasible for the brands to make such investments...

...without cutting into the ridiculous profits we continue to make, and somehow pissing off our shareholders in such a way that it would hurt our tender feelers."

FTFY.

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