Ever since NAFTA went into effect, L.A. has been losing a steady stream of apparel jobs to Mexico.
But amid that mass exodus, one sector of the local industry is booming companies that repair the mislabeling, torn seams and other apparel mishaps that are soaring due to poor quality control at Mexican factories.
“There are companies (here) doing a huge amount of business, and they charge 25 cents a hanger for repairs,” said Ilse Metchek, executive director of the California Fashion Association, a networking organization of apparel manufacturers with 250 members in Southern California.
Industry observers say mistakes made at foreign plants can range from the wrong electronic data on a price tag to incorrect washing instructions to inferior stitching. And, they say, it’s unlikely that much, if any, inspection goes on before garments arrive in the United States.
Operon Distributors Co. is one company taking full advantage of that situation. In a typical order, the company repaired open seams on 60,000 units of pajamas two weeks ago.
The firm started as a distribution outfit 26 years ago, but the rise of defective imports has enabled it to become one of the largest local companies doing repair work, among other things.
“On-site inspection, I think, does not have the impact as it did years ago, if it exists at all,” said Richard Cohen, director of marketing for City of Industry-based Operon, a division of Third Party Enterprises Inc. “There’s so much that comes in, and it’s so voluminous, and it has to be on the (retail) floor so quickly, that I don’t think they stop it on the factory floor.”
Jack Malkin, owner of J.A.M. Warehouse in Gardena, said his repair work has increased dramatically in recent years. Malkin now has 250 employees, up from 20 when he started his business 12 years ago.
“Invariably (foreign operations) put on wrong labels, they don’t press it right, they make the wrong buttonholes,” Malkin said. “They don’t know what they’re doing, or they don’t have the quality standards in their minds that the United States requires.”
Intent on cashing in on cheaper labor costs south of the border, the L.A. apparel industry has moved at lightning speed in recent years to relocate manufacturing operations to Mexico.
As a result, local apparel employment shrank by 10,700 positions, or about 10 percent, over the two-year period of 1998-99, according to the Los Angeles County Economic Development Corp. As of the beginning of this year, the industry’s local work force stood at 101,200, but another 1,800 jobs were lost during the first half of this year, EDC projections indicate.
The shifting of L.A. apparel work to Mexico and other low-cost countries is being prompted in part by intense price competition.
“The margins in garments are going down, and (manufacturers) are going to new places with less experienced, cheaper labor,” said Robert Krieger, president of Norman Krieger Inc., which provides customs clearance and transportation for importers. “In those areas, you’re going to see a higher percentage of mistakes than in areas that have been making garments for a long time.”
Metchek said there’s limited understanding among Mexican workers about what consumers in this country expect. “They haven’t been at it for very long, and they really don’t understand the requirements of the United States market,” she said. “We’re very, very tough as a market.”
The situation is further complicated by the language barrier and the inability of smaller companies based in L.A. to closely monitor foreign operations, where quick turnaround times are expected and training emphasizes speed, not quality.
As a result, manufacturers who hope to save money by farming out work to foreign contractors can get stung if they haven’t taken into account higher costs to maintain quality.
“To not factor in the quality is to be kidding yourself in terms of your bottom line,” Metchek said. “That’s what happens to manufacturers they kid themselves.”
Cost of doing business
Some U.S. retailers find it’s worth it to pay L.A.-area distributors who can salvage or upgrade the quality of imported garments before sending them directly to the sales floor. Despite the extra costs, losses to manufacturers are small relative to the overall volume of clothing.
“No matter what the costs here to fix the problem, they (apparel companies) are still making a ton of money at the retail level,” Cohen said. “So they can afford it.”
In the push for quality, some companies have opened their own factories in Mexico, hoping to take advantage of cheaper labor costs while still maintaining control over output.
Ultimately, if the quality of the stitching and beadwork is critical, the manufacturing will probably take place here in Los Angeles, said Linda Wong, director for the Los Angeles Manufacturing Networks Initiative, a program of the Community Development Technologies Center.
In the process, the focus of local garment makers has turned to producing higher-end niche items, novelty knitwear, and innovative designs in smaller volumes that allow for quicker turnaround times, Wong said.
She expects a study now underway will find that jobs dealing with quality control are among those that have grown in L.A. since NAFTA took effect. “There is a whole other dimension to the production process, where some (work) is now local and some of it is in Mexico,” Wong said.