Reports

December, 01 2000 |  Share

U.S. Military Ties to Taiwanese-owned Sweatshop in Nicaragua

December 2000

Main Chentex Campaign Page
  • Women in Nicaragua paid just 17 to 19 cents for each pair of jeans they sew under contract for the U.S. military.

Workers at the Taiwanese-owned Chentex factory in Nicaragua are paid just 17 to19 cents for every pair of jeans they sew for the Army and Airforce Exchange Service (AAFES).  When the workers sought an 8-cent wage increase in May, 2000, 700 workers were fired and blacklisted; barbwire and surveillance cameras were installed around the factory; trumped-up criminal charges were brought against the 11 union leaders that could land them in prison for up to 20 years; and 700 replacement workers were hired under the condition that they join the Chentex company-controlled union.

Army and Airforce Exchange Service

Few people realize that the U.S. military, through the Army and Airforce Exchange Service (AAFES), is one of the largest retailers in the world.  The Army and Airforce Exchange Service, which is an agency of the Department of Defense, operates 1,423 retail stores on U.S. military bases around the world, employing 50,000 people and serving 8.7 million customers.  AAFES' annual sales in 1999 were $7.3 billion.  Its 1998 profits were $342.1 million.

AAFES purchases goods from 13,000 contractors, which in turn have multiple subcontractors.  The AAFES even has its own private labels, including Royal Manor, Ponytails and Passports.

AAFES is subsidized by U.S. taxpayers.  Tax dollars pay for all U.S. military salaries connected to AAFES, all transportation costs, as well as all utility expenses for their 1,423 retail outlets.

Besides Nicaragua, a search of shipping documents shows AAFES importing goods made in China, Saipan, Honduras, Malaysia, Pakistan, Indonesia and Ecuador.

For example, in 1999, AAFES purchased $4.4 million worth of goods from Huffy Sportswear which no doubt included bikes which were switched from a USWA plant in Ohio, which was shut down in July 1998, to China, where wages are 25 cents an hour.

AAFES operates like any other major retailer, such as Kohl's or Wal-Mart, driven solely by the bottom line with no serious human or worker rights standards implemented at its contractors plants.  AAFES does not

even make public the list of factories it uses around the world to make the goods sold at its PXes on military bases.

AAFES does not even appear to have written standards, or terms of engagement, for its offshore contractors.

AAFES advertizes that its items are priced so low no one can compete with them value unequaled from any other retailer.

By its poor example rather than operating as a model of accountability with clear and enforceable human and worker rights standards and fair wages AAFES sends a devastating message around the world that the U.S. government is not seriously concerned about respect for human and worker rights.  Nor is this poor example lost on other major U.S. retailers like Kohl's, who see the U.S. military as a cover for their own tolerance of sweatshop abuses and starvation wages.

Shipping records document Army and Airforce Exchange Service ties to the Chentex factory in Nicaragua

Shipping documents for the latest available three-month period July, August, September of 2000 show three shipments from the Chentex/Nien Hsing factories to the Army and Airforce Exchange Service totaling 64 tons.  In other words, AAFES continued to source production at Chentex even after 700 workers were fired and blacklisted for asking for an 8-cent wage increase.

The goods were shipped to:                       

AAFES Logistics
Waco Distribution Center
1801 Exchange Parkway
 Waco, TX 76712
 tel: 817-666-8540

The AAFES has had a long relationship with the Chentex factory in Nicaragua.  In the last three months of 1999 October, November, December AAFES received over 83 tons of jeans made at the Chentex factory, carrying a landed Customs value of $638,361.

Internal company production control documents smuggled out of the Chentex factory show No Excuses blue jeans being shipped to the U.S. Army, along with other major U.S. retailers, including Ames and Bradlees.

 

 


 

U.S. Military Ties to Sweatshop Abuses and Starvation wages

  • Women in Nicaragua paid just 18 cents for each pair of jeans they sew

  • Sold in military bases around the world

The Army and Airforce Exchange Service (AAFES), a part of the U.S. Department of Defense, is itself one of the largest retailers in the world with $7.3 billion in annual sales, even sporting its own private labels, including Ponytails and Royal Manor.  The AAFES operates over 1,400 retail outlets on military bases around the world.  The AAFES is subsidized by U.S. taxpayers.

Shipping documents show that in just one recent three-month period--July, August, September, 2000--the Army and Airforce Exchange Service imported 64 tons of blue jeans made at the Chentex/Nien Hsing plants in Nicaragua.

Internal company production documents smuggled out of the Chentex factory show that there are 38 sewing operations required to complete a full-length pair of five-pocket blue jeans carrying the U.S. military's private Ponytails and Royal Manor labels (style numbers 5402 and 5432)

The company assigns a piece rate value to each specific operation, breaking these pay rates down to the thousandth of a cent.  Totaling the piece rates paid for all 38 operations, the workers in Nicaragua are paid 2.2755 cordobas, or just 18 cents for each pair of jeans they sew. ($1.00 = 12.9 cordobas.)

These wages would amount to less than one percent of the retail price of the jeans sold at military PXes around the world.

In 1998, the AAFES recorded a $342.1 million profit.

 


 

 

 

 

 

 


 

U.S. Military Ties to Sweatshop Abuses and Starvation wages

  • U.S. military sources production of its private label Royal Manor and Ponytails jean shorts to the Taiwanese-owned Chentex factory in Nicaragua;

     

  • Women in Nicaragua are paid just 17 cents for every pair of shorts they sew, which are sold on military bases around the world.

Internal company production documents smuggled out of the Chentex factory in Nicaragua show that there are 36 steps required to complete a pair of five-pocket blue jean shorts carrying the military's Ponytails and Royal Manor labels.

The company assigns a piece rate value to each specific operation, breaking these pay rates down to the thousandth of a cent.  When you total the piece rates paid for all 36 operations, it amounts to 2.219 cordobas, or just 17 U.S. cents.  ($1.00 = 12.9 cordobas.)

 

 

 

 

 


 

U.S. Military Ties to Sweatshop Abuses and Starvation wages

  • Women in Nicaragua paid just 18 cents for every pair of U.S. military Ponytails private label jeans they sew

The U.S. military, through the Army and Airforce Exchange Service, which has 1,400 retail outlets on military bases around the world, sources production of its private label jeans such as Ponytails, to the Taiwanese-owned Chentex factory in Nicaragua.

Internal company production documents smuggled out of the Chentex factory show that there are 31 steps needed to complete a pair of bell-bottom Ponytail jeans.

The company assigns a different piece rate value to each specific operation, breaking down pay rates to the thousandth of a cent.  Adding the piece rate pay for all 31 steps, the total comes to 2.278 cordobas, or less than 18 cents.  ($1.00 = 12.9 cordobas.)

Note:  The Ponytails trademark for children's clothing was registered to the U.S. military's Army and Airforce Exchange Service in July 1997.  The RN number listed on the Ponytail pants label, RN 92608, also belongs to the Army and Airforce Exchange Service.

 

 

 

 

 

 

 

 

 

 
 

 

U.S. Military Ties to Sweatshop Abuses and Starvation wages

  • Women in Nicaragua paid just 19 cents for each pair of military Passports jeans they sew

Passports label jeans are sewn at the Taiwanese-owned Chentex factory in Nicaragua.  The RN number on the label (which by law must identify the manufacturer) is RN 92608, which is owned by the U.S. military's Army and Airforce Exchange Service, which operates 1,400 retail stores on military bases around the world.

Internal company production documents smuggled out of the Chentex factory show that there are 38 steps, or sewing operations, needed to complete each pair of full length Passport label jeans.  The company assigns a different piece rate value to each specific operation, breaking pay rates down to the thousandth of a cent.

The total piece rate paid for all 38 operations comes to 2.4635 cordobas, or just 19 U.S. cents.  ($1.00 U.S. = 12.9 Nicaraguan cordobas.)