Walmart,,, Again?

Tazreen Fashions Ltd., that’s the company where a fire left scores injured and 112 dead. At first Walmart claimed they had no connection to the Bangladesh factory. Then they said they had cut their association before the fire. Then when it turned out that more than a third of the massive eight-story factory was producing goods for five Walmart suppliers, they claimed the suppliers acted on their own against instructions from the company. It may be true that Walmart told their suppliers that Tazreen was no longer to produce their goods. However, that message was likely lost under the pricing pressure the retail giant exerts on all their suppliers.

The details of this fire are horrific. When the fire alarm went off the stairwells that served as the sole exit from the upper floors were blocked by managers who told the workers that it was just a drill, to return to their sewing machines. In a few minutes screams from below and smoke filled the workspace, the managers had disappeared and a stampede of workers jammed the narrow stairwells. The windows were covered with iron grilles. Sixty-nine of the dead were found on one floor. Scores were saved by a worker who escaped. He then climbed a scaffolding, smashed a window grille and helped workers out and down the scaffold.

Bloomberg reporters Renee Dudley and Arun Devnath dug up information on a retailers’ meeting in the spring of 2011. Concerned with safety lapses and deaths from fires in Bangladesh, the group attempted to forge an agreement that would provide support for the factory owners to create safer working conditions. Only two brands, Tommy Hilfiger and German retailer Tchibo, were willing to sign on. Minutes from that meeting included this statement: “We are talking about 4,500 factories, and in most cases very extensive and costly modifications would need to be undertaken to some factories. It is not financially feasible for the brands to make such investments.” 

According to published reports Walmart “most strongly advocated this position.” Walmart says their objections were taken out of context. Gap, however, has put forward a plan to, “Make Bangladesh garment factories safer. It includes hiring a chief fire safety inspector to inspect factories, giving suppliers as much as $20 million in capital to make safety improvements.” 

Walmart and the others feeling pushed on one hand for higher shareholder value and on the other to lower prices, have chosen the wrong path in Bangladesh. To put the lives of human beings at extreme risk to cut a buck or two off the cost of some piece of clothing, tool or toy is not an acceptable choice. Walmart and the others struggling to meet the demands of the marketplace as they see it ignore the evidence that an ethical business model makes you more competitive and more profitable.