As U.S. Quotas Fall, Latin Pants Makers Seek Leg Up on Asia
On Jan. 1, 2005, a major global transfer of jobs and wealth will begin when a decades-old quota system that controls access to the huge U.S. apparel sector comes to an end.
China, by all accounts, will be the main beneficiary. Central America and above all Mexico, which supply one of every three pairs of pants bought in the U.S., stand to be among the biggest losers.
But here in Guatemala, the brains behind the region's largest pants maker isn't alarmed. The reason for his confidence: the fickleness of American teenagers.
Carlos Arias, top strategist at Koramsa, strolls through one of the company's huge factories amid the whir of needles and ceiling fans. He picks through a pile of Old Navy jeans, rubbed and tinted to look as grubby as possible. The jeans are a hit among U.S. teens, so Gap Inc., which owns Old Navy, wants Koramsa to ship tens of thousands more -- in four weeks.
"Thank God for American kids," Mr. Arias beams. "They change their minds all the time."
With nearly 15,000 employees producing pants here, Koramsa is now investing millions of dollars so it can move more of the latest fashions faster to U.S. stores. Koramsa can churn out 90 styles at a time in every imaginable color and finish -- all in plants just two days away from Miami by ship. That mix of flexibility and speed, Mr. Arias hopes, will be enough to withstand the expected tsunami of cheaper pants from China and other parts of Asia.
Koramsa and a handful of other producers, including the Dominican Republic's pants giant Grupo M, are investing heavily to overhaul their operations in a bid to survive. Hundreds of pants makers in the region, even those that do change the way they operate, won't make it.
The world's clothing business faces massive upheaval come Jan. 1, with the end of a quota system that has set limits for each country's sales to the $76 billion U.S. apparel market since the early 1960s. The measures were erected to protect the U.S. garment industry from foreign competition, as part of a broader set of trade restrictions employed by rich countries at the time.
Countries agreed in a global trade pact in 1994 to gradually lift the quotas, with complete elimination set for the end of this year. At the time, China hardly registered as a threat, and developing countries thought the agreement would help them.
Nowhere will the competition be tougher than in cotton pants. U.S. retailers last year imported nearly two billion pairs of khakis, jeans and other cotton trousers last year from more than 70 countries, around one-tenth of all U.S. garment imports.
In five years, retailers expect that list to fall to as few as 10 countries, with China providing up to half of all pants bought in the U.S.
When U.S. pants production fled in the 1980s and 1990s, it largely went south, speeded by the North American Free Trade Agreement with Mexico. Levi Strauss & Co. closed its last U.S. plant in December. Today, more than a third of all pants bought in the U.S. come from Mexico, the Dominican Republic, Honduras, Guatemala and Nicaragua. More than 150,000 people in the region earn their livings making pants for the U.S. market.
What sends chills through the area is this: The end of quotas next year will allow China to ship all the pants it wants to the U.S. -- at prices up to 20% below those charged by producers in Guatemala or the Dominican Republic. The price difference would come even after China pays 17% duties that Central American countries don't pay on cotton pants.
China, which already makes most of America's bras, shoes, toys and bicycles, now ranks just 19th among suppliers of pants, below Egypt and Lesotho. China is permitted to export just 28 million pairs of pants to the U.S. this year, about what U.S. consumers snap up in a week.
Hundreds of new textile mills are now sprouting up in Changzhou and Guangdong provinces, alongside megafactories that will dwarf anything found in Latin America. China's efficiencies of size, plus lower costs and access to cheap credit are expected to push down all apparel prices.
Bob Zane, head of sourcing at Liz Claiborne Inc., offers a blunt prediction as to who will make America's pants in the years ahead. "It all goes East," he says. By 2010, he predicts, China could supply more than 80% of all U.S. clothing -- up from about 13% now.
Companies in Mexico, which makes a fourth of all cotton trousers bound for the U.S., have done little to adapt to coming changes and are likely to be the hardest hit. In Central America and the Caribbean, even optimists concede that about half of the 500,000 jobs at the region's 1,000 garment companies could vanish in the next five years.
"Vendors that get what matters, like speed to market and awareness of the latest trends, will succeed. Those that don't will disappear," says Jeffrey Frye, head of Latin American sourcing for Gap, the San Francisco-based U.S. retailer that, in addition to Old Navy, owns Banana Republic.
For nearly two decades, Fernando Capellan, Grupo M's founder and president, kept a framed vision statement outside his office: "We are a global company in a constant state of learning," it began. Last month, the lanky Mr. Capellan, 47, posted a more focused mission statement: "To be better than Asia in the Americas."
Unlike many of his peers in Santiago, a city with seven large industrial parks devoted almost entirely to the garment business, Mr. Capellan has spent years bracing for the end of quotas. Grupo M will continue to grow by moving into knit shirts and by seeking cheaper labor for stitching pants in neighboring Haiti.
The company's biggest gamble lies 25 minutes to the west by helicopter over lush plains dotted with lakes, palm groves and baseball diamonds amid clusters of thatched-roof huts. The chopper lands in a small industrial park sliced in half by an invisible border between Haiti and the Dominican Republic. Launched by Grupo M last year, the Codevi Industrial Park has garnered $20 million in financing from the World Bank's International Finance Corp., but so far, no other takers among Dominican manufacturers.
The park now consists of two factories set amid empty fields. In the first, 800 Haitians stitch basic Levi's jeans, which are then shipped to Santiago for washing and packaging.
The other, opened in April, has fewer than 200 Haitians making Hanes T-shirts for Chicago-based Sara Lee Corp. The workers cross a small footbridge that spans the Massacre River from Ounaminthe, an impoverished city of about 70,000, where unemployment tops 70%. Mr. Capellan foresees 2,000 workers there by the end of the year, and 5,000 by 2009.
It's a key part of his China strategy: Wages in Haiti are about $16 a week, or nearly 20% lower than in Santiago. Chinese textile and garment workers earn on average around $15 a week, though wages there are rising.
Mr. Capellan, a former commercial pilot, hopes that by shifting the more labor-intensive work to Haiti, and boosting the more advanced finishing work in Santiago, he will save 30% on production costs. "If I'm lucky, I may keep a step ahead of China," he says.
The extent of the gamble became clear last week when labor strife at the plant led Mr. Capellan to threaten to pull out of the park and Haiti. The company says the problems have subsided.
In Guatemala, 1,400 miles to the southeast, trouser-giant Koramsa is betting it can grow by moving faster. The company is scurrying to mimic its all-service competitors in Asia, but with the added advantage of proximity to U.S. shores.
The company started in 1988 as a bare-bones sewing shop for Levi Strauss. By 2000, Koramsa was Levi's largest single supplier of jeans. To comply with strict U.S. duty-free provisions, Central American producers had to live by awkward rules. Levi Strauss had to cut all fabric in U.S. plants, ship pieces to Koramsa for sewing, and then dye and finish assembled pants back in the U.S. A change in U.S. law in late 2000 allowed Central American companies to handle everything -- meaning cutting, sewing and finishing -- as long as they used U.S. fabric.
The change sparked a revolution at Koramsa that dovetailed with sweeping changes under way in the U.S. retail market. Companies like Gap, Levi Strauss and Liz Claiborne were all moving out of manufacturing to concentrate on sales. For Koramsa, it was liberation mixed with fright. "Suddenly, we had to do everything ourselves," Mr. Arias says.
Koramsa had to form relationships with more than 50 suppliers -- of fabric, zippers, thread and buttons -- which meant taking on millions of dollars of overhead and new risks.
Mr. Arias, 35 years old, joined Koramsa in April 2000. His father, Carlos Arias Sr., had just suffered his own defeat in the garment business when a shirt company he bought in 1988 went bankrupt. A second family company, making baby clothes for the U.S. market, then collapsed in 2002 when its main customer, Gerber Childrenswear Inc., shifted all its orders to India.
"I learned from my father to be prepared for the unexpected," Mr. Arias says.
After all the pain, today's Koramsa is unrecognizable from the company of four years ago. Sales have more than doubled, while its customers now include many of the largest U.S. brands.
Koramsa is aiming to produce nearly three million pairs of pants a month by August and expects sales next year to jump by a third. To keep up, the company has poured millions of dollars into a huge washing and finishing facility where, amid rows of 30-foot-high washing machines, workers use chemicals and wire brushes to fade and tint and scuff jeans to chase the latest fad. In a small lab, three washing specialists -- Mr. Arias calls them his "geniuses" -- labor over the easiest way to make a worn wallet mark in back pockets of jeans.
There's little doubt here that Asia will soon grab most of what's known as the "basics" business: the huge runs of standard jeans and khakis that make up a large chunk of what the region produces. For that business, cost is all that matters. A standard jean that Koramsa can get to the U.S. at $10 a pair will cost in the quota-free world as little as $7.75 from China.
Instead, Koramsa is gambling that it can grow by replenishing store shelves in Los Angeles or New York faster than Asian competitors. "Speed will have to win out over price," Mr. Arias says.
To that end, workers have cleared a cavernous room previously used for pressing pants. Its new incarnation will be as a short-term warehouse for tagged and preboxed trousers bound for specific retail outlets in the U.S. Koramsa is now in charge of restocking 589 Kohl's department stores with denim pants, and will do similar quick shipments for Gap, Levi Strauss and Tommy Hilfiger.
Shipping tends to take two weeks more from China than from Central America. Proximity allows buyers to change their minds later and more often. On Koramsa's main production floor, the largest in Central America, Mr. Arias grabs a pair of low-waist Levi's jeans for women. "This could already be on a boat from China and we'd still be able to make finishing changes and get it to the U.S. faster," he says.
One speed bump: Producers in the region must use domestic or U.S. fabric to get duty-free access to the U.S. market. That dependence increases turnaround times and requires companies to maintain huge inventories.
Central American pants producers are pushing for better access to the U.S. through the Central American Free Trade Agreement. It would extend duty-free treatment beyond apparel to most goods from Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua, and would ease the rules on what fabrics companies can use and still avoid tariffs. The pact, signed by the participating countries last month, faces grim odds in Congress, where Democrats object to what they claim are its weak labor and environmental protections.
China, too, faces unknowns that could weaken its charge on the apparel front next year. The U.S. government could move to impose import caps on some apparel categories from China, as it did last year with bras, nightgowns and knit fabric under a special provision of China's 2001 agreement to join the World Trade Organization. Concern is also mounting over China's ability to absorb unlimited investments.
"If everyone rushes into China, what will happen?" says Marc Compagnon, chief merchandising officer with the Colby International division of the Hong Kong apparel sourcing giant Li & Fung. "Costs will go up for wages, electricity, freight, you name it. That could take a bit of the edge off China's appeal."
美国取消纺织品配额中国将成最大受益者
再过199天，当限制外国服装进入美国市场的纺织品配额制被取消时，历史上规模最大、最迅猛的一次全球性就业和财富的大迁移就将拉开序幕。
中国将是最大的受益者。而中美洲国家、特别是墨西哥将成为最大的输家，目前美国市场销售的裤子每3条就有1条产自该国。
但在危地马拉，该地区最大的裤子生产厂家Koramsa的决策者并没有因此而惊慌失措。他自信的原因在于：美国青年的喜好变化无常。
Koramsa的首席策略师卡洛斯?阿里亚斯(Carlos Arias)在该公司的一间针线穿梭吊扇飞旋的大车间里随处巡视。他从一堆“老海军”(Old Navy)牛仔裤中随手拿出一条，这些“牛仔裤经过特殊的打磨和染色，以便让它们显得越邋遢越好。他说：“感谢上帝，幸好这些美国年轻人总是喜新厌旧，不断变换他们的口味。”时下这种牛仔裤在美国年轻人中非常走俏，因此，拥有“老海军”品牌的美国零售商Gap Inc.希望Koramsa在4周内供货数万件。
Koramsa目前正投资数百万美元、雇佣近15,000名工人赶制裤子，以便尽快向美国的商店交付更多的流行款式的裤子。
在这个距迈阿密船运仅需两天时间的工厂里，Koramsa同一时间可开机生产90种款式的裤子，它们色彩各异，打磨程度不同。阿里亚斯希望，他们的这种灵活性和快捷速度能够足以抵御来自中国及亚洲其他国家低价裤装的巨大冲击。
Koramsa和包括多米尼加共和国裤装行业巨头Grupo M在内的众多生产商将投下巨资改进业务，以期在动荡的环境中求得生存，然而该地区数百家裤子生产商，甚至包括那些已经改变经营方式的生产商最终仍将难以如愿。
明年1月1日，随著规模达760亿美元的美国服装市场实行的纺织品进口配额制被取消，全球服装业将发生天翻地覆的变化。
棉质裤子的竞争将尤为激烈。去年，美国零售商从70多个国家进口了近20亿条卡其布、牛仔裤和其他棉质裤，占美国服装进口总额的十分之一左右。
零售商们预计，5年后进口来源地将减至10个左右，而中国将在美国所有裤类市场上占据半壁江山。
八十和九十年代美国裤类生产销声匿迹后，多数业务转向了南方，墨西哥加入《北美自由贸易协定》使这一进程进一步加快。Levi Strauss & Co.于去年12月关闭了最后一家工厂。如今，美国超过三分之一的裤子来自墨西哥、多米尼加、洪都拉斯、危地马拉及尼加拉瓜等南美洲国家。该地区超过25万人靠为美国生产裤子为生。
令该地区生产商不寒而栗的是：明年纺织品配额取消后，中国厂商将如鱼得水，它们将以比危地马拉或多米尼加厂商低20%的价格大举进军美国。
中国，这个在美国胸衣、鞋类、玩具和自行车市场已享有绝对优势的国家在裤类出口方面目前仅排在第19位，还不及埃及和莱索托。中国今年对美国的裤子出口配额是2,800万条，仅相当于美国消费者一周的购买量。
在江苏常州市和广东省，新开的纺织厂如雨后春笋，它们周围的超大型服装厂更是让任一家拉美服装厂相形见绌。中国的规模效应、低成本和更容易获得信贷支持等因素将使各类服装都有可能实现低价格。
Liz Clairborne Inc.的市场部负责人鲍勃?赞恩(Bob Zane)预计，未来几年亚洲国家将主导美国裤类市场的供应。他预计，到2010年，美国所有服装中将有80%以上来自中国，目前这一数字仅为13%左右。
目前美国市场的棉质裤有四分之一来自墨西哥，但墨西哥的公司似乎并没有对形势的变化采取任何措施，它们很可能会成为受打击最重的公司。但在中美洲和加勒比海，即便最乐观的人士也不得不承认，目前1,000家服装公司的50多万个工作岗位未来5年内将有半数销声匿迹。
总部位于旧金山的美国零售商Gap在拉美地区的负责人杰夫里?弗莱(Jeffrey Frye)说，对市场进入速度和最新趋势有清醒认识的厂商将成为幸存者。而那些头脑僵化的厂家将被市场淘汰。
Grupo M的创始人兼总裁弗尔南多?卡佩良(Fernando Capellan)办公室门外墙上的一个玻璃框里，镶嵌著公司创建时设立的宗旨：作不断进取的全球化公司”。在近20年的时间里，卡佩良一直遵循著这一信条。而上个月，47岁的卡佩良又添了一条更有针对性的警句：在美洲市场打败亚洲。
与圣地亚哥的许多同行不同，卡佩良几年前就开始为纺织品配额的取消作准备了。在圣地亚哥，有7个大型工业园区几乎全都从事服装加工业。Grupo M将涉足针织衫业务，并把裤类加工业务转至生产力价格低廉的邻国海地，以继续实现增长。
该公司最大的一家工厂位于距西海岸直升机仅需25分钟航程的一片葱翠的平原上，一簇簇的茅草屋间零星点缀著湖泊、棕榈树林和棒球场。直升机可以降落在一个小型工业园区内，这个名为Codevi的园区被海地和多米尼加的边境线一分为二。Codevi工业园区是Grupo M去年发起创办的，从世界银行(World Bank)旗下的国际金融公司(International Finance Corp.)获得了2,000万美元贷款，不过目前该园区还没有其他厂家进驻。
空旷的场地上目前只有两家工厂。一家是有800名海地工人的Levi's牛仔裤生产厂，该厂生产的牛仔裤随后将被运往圣地亚哥进行漂洗和包装。
另一家4月份开张的工厂有不到200名海地员工，他们在这里为芝加哥Sara Lee Corp.生产Hanas牌T恤衫。这些工人主要来自Massacre河对岸、只有7万人口而失业率却高达70%的贫穷小城Ounaminthe。卡佩良预计，今年年底这里的工人将达到2,000人，到2009年将达到5,000人。
利用海地劳动力成本低廉的优势成为卡佩良中国战略的关键部分：海地的人均周薪为16美元左右，比圣地亚哥低约20%。中国纺织和服装业工人的周平均工资在15美元左右，但目前工资已开始上涨。
曾做过商用飞机驾驶员的卡佩良预计，通过将劳动密集型工作转至海地、然后在圣地亚哥完成成衣的后续工序，他将能节省30%的生产成本。他说：“幸运的话，我有可能走在中国的前面。”
在危地马拉距东南海岸2,200公里的地方，裤业巨头Koramsa正潜心推行其现有策略，它相信，藉此它完全能够实现增长，只是步伐要更快一些。该公司正在加紧效仿其亚洲竞争对手，而由于比邻美国，它已拥有得天独厚的地域优势。
该公司成立于1988年，最初只是一个为Levi Strauss服务的小裁缝店。到2000年，Koramsa已发展为Levi最大的牛仔裤供应商。为遵守美国严格的免税条款，中美洲生产商必须谨小慎微。Levi Strauss必须在美国工厂内完成服装裁剪，然后将裁剪好地布片运往Koramsa，在那里完成缝制、染色、最终成衣，然后再运回美国。2000年末美国相关法规变更后，中美洲公司才得以处理从裁剪、缝制到成衣的全套工序──只要他们使用的是美国布料。
这一政策变化促使Koramsa也相应进行了改革，而它的改革恰好迎合了美国零售市场上一场声势浩大的变革。像Gap、Levi和Liz Claiborne等公司纷纷将制造业务向海外外包，以便潜心销售。这让Koramsa又惊又喜。阿里亚斯说：“突然之间，我们必须自己完成所有的事情。”
Koramsa需要与50多家布料、拉链、线和纽扣供应商打交道，这也就意味著公司要承担数百万美元的管理费用，以及突如其来的各种风险。
阿里亚斯，这位年仅35岁、拥有开朗笑容和迷人秀发的年轻人于2000年4月加入了Koramsa。当时他的父亲老卡洛斯?阿里亚斯(Carlos Arias)刚刚在服装生意上遭受沉重打击──他1988年买进的一家衬衫公司破产了。另外一家为美国市场生产婴儿服装的家族公司也因其主要客户Gerber Childrenswear Inc.将订单转向印度而于2002年破产。
阿里亚斯说：“我从我父亲那里得到的教训就是，要为突如其来的情况有所准备。”
在经历了所有这些挫折后，今日的Koramsa与4年前已不能同日而语。销售额增长了一倍以上，客户中有很多美国最知名的品牌厂家。
Koramsa的目标是到8月份实现月产量300万条，并预计明年销售额将增长三分之一。为了紧跟流行趋势，该公司已经向一家大型漂洗和成衣厂倾注了数百万美元资金，在那里，工人们正在9米高的洗衣机之间来回穿梭，用化学原料和钢丝刷对各种牛仔裤进行褪色、染色和打磨。在一间小型实验室里，被阿里亚斯称为“天才”的3位洗涤专家正在研究如何用最简单的方法让牛仔裤的后兜看上去像被钱包磨得很旧的样子。
毫无疑问，亚洲将迅速在所谓的“基础”业务（标准牛仔裤和卡其布裤子）上大展拳脚，这些都是亚洲地区的主打产品。对于这类业务而言，成本几乎可以决定一切。Koramsa向美国出售的标准牛仔裤售价在10美元左右，而取消配额后中国类似产品的售价将仅为7.75美元。
然而Koramsa还是要赌一把，它相信，凭藉其在洛杉矶或纽约市场的供货速度比亚洲竞争对手更快，它可以获得增长。阿里亚斯说，速度将战胜成本。
为此，工人们已经将以往用于熨烫裤子的一间千疮百孔的大房间清理出来，将其作为那些已贴标签但尚未包装的裤子的短期周转仓库，这些裤子将分别运往美国不同的零售网点。
Koramsa目前为Kohl的589家出售粗斜纹裤的百货店承担再供货工作，而且还将为Gap、Levi Strauss和Tommy Hilfiger提供类似的快速发货服务。
从中国向美国发货通常要比中美洲到美国多花2周时间。靠近美国的最大优势在于，它可以使美国消费者频繁地改变口味。
在Koramsa的主要生产基地、也是中美洲最大的生产基地里，阿里亚斯随手拿起一条Levi低腰女裤，说：“中国的产品可能已经上船了，而我们可以再作一些局部修改，然后以更快的速度发往美国。”
中美洲裤类生产商面临著两项重要挑战。其一，该地区是否能够通过美国与中美洲自由贸易协定(Central American Free Trade Agreement)锁定并扩大其得天独厚的接近美国的优势。美国国会对这项于上个月签署的协定反应各异，民主党人士打著就业疲软和保护环境的旗号对其提出强烈反对。它将把免税待遇扩大到来自哥斯达黎加、多米尼加、萨尔瓦多、危地马拉、宏都拉斯和尼加拉瓜的更多产品，并有可能使针织品公司目前执行的、并据以规避关税的相关条款进一步放宽。
危地马拉经济部长兼纺织业专家马里奥?奎瓦斯(Mario Cuevas)说，如果美国与中美洲自由贸易协定近期不能生效，人们可能会作出将生产转向亚洲等投资决定，这将对中美洲地区构成重大打击。
另一项挑战是，由于中美洲生产商必须使用本地或美国的织物才能免税进入美国市场，因此裤业生产商几乎完全依赖美国的粗纹布和斜纹布。这种依赖性导致生产周期延长，并要求公司保持很高的库存。
当然，中国也面临很多不可预见的、可能削弱其明年在服装市场上的主导地位的因素。美国政府可能会像去年那样对来自中国的某些服装产品征收进口关税，去年美国基于中国1999年加入世界贸易组织(WTO)的特别条款，对来自中国的胸衣、袍服和丝织品征收了进口关税。
人们对于中国无限制地吸引投资的能力也越发感到担忧。
香港服装巨头利丰有限公司(Li & Fung Ltd.) Colby International分部负责销售策划的马克?孔帕尼翁(Marc Compagnon)说：“如果所有人都涌进中国，结果会怎样？工资、电费、运费，你数得上来的成本都会上升。到时候中国的吸引力也就没那么大了。”
多米尼加的3大裤子生产商Grupo M、D'Clase Corp和Interamericana Products International仍在坚持他们的赌注。这三家公司已组建合资公司，总部就设在一家裤子生产厂的附近。它的特长是可以为设在美国的公司提供英语和西班牙语呼叫中心(call-center)服务。
而Dockers裤的大型供应商D'Clase还计划打入另一个领域：制鞋。
