Made in the U.S. of A.?

It's not the most obvious way to run a successful textile company in Los Angeles: Pay the workers a living wage and give consumers absolutely no choice.

By Linda Baker

Published February 11, 2004 8:30PM (EST)

The revolution, says Dov Charney, the manic 35-year-old founder and CEO of American Apparel, will be standardized. A purveyor of "sweatshop free" T-shirts and casual wear, American Apparel is the exception to the rule in today's fashion and textile industry. The company doesn't outsource its production, and it confines all aspects of manufacturing and management to a single building in downtown Los Angeles. Everything from knitting the cloth to designing the garments takes place in a seven-story pink warehouse with the huge banner "American Apparel Is an Industrial Revolution," unfurled outside the top floor. (Or, as Charney puts it, "a FUCKING industrial revolution.")

In 2003, American Apparel grossed $80 million, double its sales figures for 2002. Those numbers are expected to double again in 2004. Last November, the company opened its first three retail stores, two in New York City and one in Los Angeles; by the end of the year, there will be outposts in London, Frankfurt and Berlin. The globetrotting Charney is scouting retail and manufacturing locations in Thailand, Mexico and China, where, he says, American Apparel is committed to paying store and factory workers U.S.-dollar minimum wage.

"Our goal is to become the biggest apparel operation in human history," says Charney, who cheerfully confesses to being, well, a megalomaniac. "We will challenge the Gap in my time."

Four years into the 21st century, any 10-year-old knows that outsourcing labor is the dominant trend in global manufacturing. More than 30,000 U.S. textile workers lost their jobs in the past year and a half, according to the American Textile Manufacturers' Institute.

But nationally and internationally, subcontracting in the garment industry is associated with lack of oversight and substandard labor conditions, says Richard Appelbaum, a UC-Santa Barbara sociologist and the author of "Behind the Label," a book on L.A.'s garment industry.

"The real problem with today's manufacturing is the outsourcing," he says. "It makes it almost impossible to know where the supply chain ends." (The word "sweatshop," after all, was first used in reference to subcontracted garment workers in 19th century England who labored in their own homes.)

Enter American Apparel, where Charney pays his 760 predominantly Hispanic shop workers an average of $11 an hour, in addition to providing health insurance, paid vacation and free English classes. The company's favorable working conditions are far from the norm, says the nonprofit Garment Workers Center in L.A., where sewing has become the largest sector in the county's manufacturing economy. According to the Department of Labor, only a third of the city's 5,000 garment factories comply with federal and state labor laws, such as minimum wage standards, overtime pay and record keeping. Over half routinely violate health and safety standards.

But don't confuse Charney with Cesar Chavez. Heir to the Jewish "garmento" tradition -- his grandfather in Montreal was an "immigrant business hustler" -- Charney wants to be recognized as a brilliant entrepreneur, not a benevolent employer. He has a love-hate relationship with the union-led anti-sweatshop movement and says that "bringing a little dignity to the workplace" is simply a byproduct of the company's hyper-efficient "vertically integrated" business model. Apply principles of good design to fashion and to factories, says this son of a painter and an urban planner, and you can solve any problem -- even the social and structural woes of present-day capitalist production.

"The problem is there's no standardization in apparel," says Charney. The fashion industry changes styles every three months, he says, giving artists and designers too much freedom and flexibility. And as long as apparel producers keep churning out new product lines, the industry will continue to depend on a subcontracting model. "We keep feeding consumers these ridiculous choices," Charney says. "But it's on the backs of inhumane labor."

The American Apparel aesthetic, by contrast, harks back to what Charney calls the "commodity fashion" roots of U.S. apparel. Here he waxes nostalgic about American standbys such as Hanes underwear, which he has been buying for 13 years, or the "simple American" purity of a pair of Levi's cords. "If we applied a little bit of universalism to fashion, if we apply principles of modernism that have been developed over the past century, these kinds of clothes can be made in a vertically integrated setting, where it's much more efficient, more profitable, and much easier to communicate with the customer. Then, secondarily, we can say we know the face of our workers, that we're sweatshop free."

At American Apparel's corporate and manufacturing headquarters, Charney appears to have done the unthinkable: He's made working in a garment factory hip, not just for his young creative and corporate staff, but for the Latino shop workers as well. Fingers fly as teams of sewers are paid by the piece (a modern-day version of the old sweatshop payment system), but shop workers also partake of such trendy on-site services as yoga and massage and wear the T-shirts they make to work. The company offers counseling for co-workers who get involved romantically and then break up again, nobody cares if you smoke a joint, and seven or eight times a year working class joins management in one big beer and pizza party. It's like one of those multicultural Benetton ads, except, well -- it's an American Apparel ad and it's real.

"The secret to American Apparel is that none of us are really Americans," wrote Charney, a Montreal native, in a precursor to the company's mission statement a couple of years ago. (He earned, for his pains, a punch in the face from his former girlfriend, who called Charney anti-white. "She wasn't a very sophisticated thinker at the time," he says.) Quoting from a book of photos compiled by Dennis Hopper's daughter, suggesting that Jane Fonda decided to come to L.A. after seeing the seminal '60s road-trip movie "Easy Rider," Charney contends that American Apparel is providing similar inspiration to a new generation of young people migrating to L.A. He might as well quote from any number of enthusiastic employee testimonials.

"Working for Dov gives me hope that the prevailing morally bankrupt and generally unsustainable business practices that run rampant around the world can, with a lot of hard work and smarts and vision, be changed for the better," says Kabira Hochberg, Charney's 20-something, Vassar-educated personal assistant, via e-mail. "He's a maniac, but he is going to change the American landscape, and possibly, capitalism itself ... And I love that I'm working in a factory."

Alexandra Spunt, a former freelance journalist who moved to L.A. after interviewing Charney for the Montreal Mirror in August, says she feels "quite privileged to work in the creative department of a non-institutional company that's both socially responsible and prosperous."

"Many young people are caught between wanting to do good work and wanting to make money," says the 24-year-old Spunt, who now oversees all aspects of the company's image. "I get to have my cake and eat it too."

Any company that generates this kind of adulation -- and experiences this kind of growth -- is bound to have detractors. Ilse Metchek, the executive director of the California Fashion Association, is one of the skeptics. American Apparel's "contrarian" vertically integrated model wouldn't work for most of the fashion industry, she says. But her argument against vertical integration is exactly the same as Charney's argument for doing all the work in-house. "Because of the diversification of product," says Metchek, "the work [must be] contracted out. In Dov's case, they make all the same thing, all the time."

Arguing that unions or workers' cooperatives are the panacea for cheap-labor manufacturing trends, members of the anti-sweatshop movement also cast a dubious -- if slightly envious -- eye on Charney's operation. "Charney's a charismatic guy," says Appelbaum, summing up the party line. "But his company is based on a patrimony -- in other words, his good graces. It's definitely a step forward, but I don't think the future of apparel production should reside on the largesse of factory owners. It should reside on workers representing themselves."

The history of American Apparel overlaps with that of several nascent sweatshop-free apparel manufacturers. For example, Charney's "hyper capitalist-socialist business fusion" mission statement was inspired partly by Adbusters, which is now manufacturing the Black Spot sneaker as an "ethical" alternative to Nike. American Apparel also vied, unsuccessfully, with SweatX (located just around the corner from American Apparel) and the Massachusetts-based NoSweatApparel for several million dollars from the Hot Fudge Venture Fund, founded by former ice cream king Ben Cohen. (In an act of internecine sweatshop-free apparel warfare, NoSweatApparel last month launched a No Sweat sneaker to compete with Adbuster's Black Spot. Adam Neiman, CEO of NoSweatApparel, says he created the shoe, manufactured in a Jakarta, Indonesia, union shop, after discovering that Adbusters had decided to source the Black Spot from a non-union factory in China.)

Charney, who dismisses most union supporters as "false tribalists," says that unionization would stifle American Apparel's innovative business practices. Mindful of federal labor laws, however, he claims to support his workers' collective bargaining rights -- if they chose to exercise them.

"I think about 1 percent of the workers want to unionize," says 24-year-old Jeremias Pablo, a sewing operations supervisor. "At American Apparel, we already have something like a union. We have a good boss, we have all those benefits, we have respect. The union should help other places where there is abuse and racism." During the past year, the Union of Needletrades, Industrial and Textile Employees (UNITE), has tried several times to unionize American Apparel.

Charney has his own theory of workplace checks and balances. It goes something like this: The media is to American Apparel what the unions are to the labor movement. Last month, for example, when American Apparel fired one of its cutting managers for allegedly extorting workers, the incident was covered by Channel 22 in Los Angeles; a few days later, the story ran on television in Mexico.

"His first choice wasn't to run to the labor board," says Charney gleefully. "He went to the media! He said: 'I've been fired unfairly!' Well, you can't do that when the company's offshore. If it was a subcontractor working for American Apparel, we could say we don't know anything about it, but because he has something to say against one of the great companies of L.A., the cameras were there right away, before I had a chance to wipe my ass and get out of bed."

That's what sweatshop free really means, Charney says. "We're not saying it's a perfect environment here. I'm sure some workers get kicked in the ass occasionally. But at least it's in our shop. Especially in modern times, apparel is movable. With e-mail, fax machines, and logistics companies, you can move a box from L.A. to China in 20 hours. There are so few restrictions on the movement of apparel, the one thing that does ensure the workers' rights is an integrated model, especially if it's in a media environment like L.A."

(By the way, says Charney, his cutting manager is "as guilty as he comes," and the company is hiring a third-party investigator to prepare a report that proves it. "Hey, I love the guy, but he's extorting money from our workers, he's not sweatshop free, he doesn't represent our ideals. So we had to make a correction.")

The workers cheer, the media fawns, and the unions and fashion industry -- strange bedfellows -- grumble if not seethe. Meanwhile, Charney is moving on to new crusades. Thumbing his nose at the apparel industry's "culture of collections," he's promoting a system called "style number identity," where the same garment is made for at least 100 months. With stores planned for England, Germany, and the developing world, Charney is also building on the success of his New York and L.A. retail outlets, which have grossed millions in sales.

Hundreds of retail employees are ready to come into the vertically integrated fold, says Charney, who concedes, in a rare moment, that unions are right to target the oft-ignored retail sector. Whether in Bangkok or Mexico City, Charney plans to pay workers in his stores U.S.-dollar minimum wage. "Shop workers in Mexico make about $80 a week," he says. "I could go into Mexico and pay $400 or $500 a week because my business model can accommodate my pricing."

Vertically integrating on a global scale may seem like an oxymoron; it sounds like subcontracting by another name. But good logistics can overcome any hurdles, Charney says. To mitigate the environmental impact associated with air freight, for example, American Apparel plans to utilize dead space on passenger airlines instead of cargo planes.

Charney's long-term goal is to open manufacturing plants in the developing world, with China and India as the preferred targets. But any American Apparel factory in China, he says, is going to sell the clothes locally -- none of this shipping T-shirts back to the United States. It could be a perfect match. For the standardized navy blue clothing under communism, substitute the standardized American Apparel T-shirt under neo-capitalism. Call it sustainability. Call it a zeitgeist. American Apparel is not going away.

Linda Baker

Linda Baker is a journalist in Portland, Oregon.

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