Disney halts production in Bangladesh

Too many industrial disasters spurred the move, but the impoverished country's factory owners fear other companies will follow.

By Jonathan Berr May 3, 2013 10:41AM
Bangladesh rescuers look for survivors and victims at the site of a building that collapsed April 24, 2013 in Savar, near Dhaka, Bangladesh (© A.M.Ahad/AP Photo)Spurred by a rash of fatal factory disasters in Bangladesh, Walt Disney (DIS) has stopped producing branded merchandise in the country, one of the poorest in the world. Factory owners there are worried that other apparel makers will follow the lead of the media and entertainment giant.

According to CNNMoney, the Burbank, Calif.-based company sent a letter to its vendors and licensees in March ordering them to quit producing Disney-branded merchandise in the "highest-risk countries" to improve safety standards in its supply chain. The company will also quit production in Ecuador, Venezuela, Belarus and Pakistan by April 2014. 

Disney's decision was spurred by a factory fire in November in Dhaka that left 112 dead and a fire in Pakistan that killed 262 workers, according to CNNMoney. Then last week, more than 500 people were killed after a factory collapsed in a Dhaka suburb in what is Bangladesh's worst industrial accident (pictured).

"After much thought and discussion we felt this was the most responsible way to manage the challenges associated with our supply chain," said Bob Chapek, president of Disney Consumer Products, in an interview with the site.

Disney is the first Western company to take such a move, and business owners in Bangladesh fear it won't be the last. Factory owner Mohammad Fazlul Azim, told the The New York Times that the entire industry shouldn't be penalized for the actions of a few lawbreakers.
 
"This industry is very important to us," Azim, a factory owner, told the paper. "Fourteen million families depend on this. It is a huge number of people who are dependent on this industry."

As the paper noted, Wal-Mart (WMT), Gap (GPS) and other retailers have balked at backing a plan that would require them to pay for upgrades at Bangladeshi factories because they are concerned "about the plan’s binding legal commitment." Wal-Mart, the world's largest retailer, agreed to train 2,000 factory owners in Bangladesh about fire safety, an investment of $1.5 million. And Gap has developed a $22 million "fire and safety plan."

Consumers are starting to realize that there's a pretty high price to be paid for cheap fashion.

Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.


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53Comments
May 3, 2013 3:32PM
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Then maybe they should just come back to America, where it's safer. If I'm going to spend $40 on a t-shirt I want it to be worth that.
May 3, 2013 2:29PM
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I find it shameful that an American based company founded by an American born in Chicago is having anything made overseas. A large family oriented company such as Disney should look into the eyes of the hard working American families coming through the gates and realize that we need to take care of our homeland before we can take care of anyone else.

I have taken my family to Disney once a year for the last 11 years and I am upset with myself that I never turned the extremely expensive Mickey ears over that I bought my children  to see where they were made.

NEVER AGAIN. 

May 3, 2013 11:35AM
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Instead of moving their production from these impoverished counties they should just insist on paying higher wages and having better working standards for workers. The building owners have guilt in these tragedies but they also have the difficult task of running these factories on very little money. If Disney and others insisted on a higher pay (maybe 50 cents an hour compared to 20 cents) and less hours (maybe 10 hours instead of 14 hours a day) and paid the factory owners what was needed to fulfill these wage and safety promises maybe we could avoid these disasters.
By moving to other countries they will continue to exploit local populations and make them into indentured servants.
May 3, 2013 7:08PM
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Kudos for Disney. A good company just made itself better. I recommend that they build their own toys and goods factories in Florida and prove what a great American company can do if they put their minds to it. Come on Disney, you're big enough to do it.  Create more jobs for Florida. Make Walt proud.
May 3, 2013 6:10PM
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American Iconic items made in foreign poorly run slave shops.  How Un American can you get.  What a shame it takes a major disaster to bring attention to it.  Bring back Made in America!
May 6, 2013 8:33AM
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Ironic that the US government considers itself the world's policeman, while it rejects its responsibility for being the world's building and health inspector. 

It is frustrating to have watched the congress of of the US allow big business to abandon the workers in the United States and move to countries where corruption, abuse of civil rights exploitation of workers is a way of life.  Undeserving entrapaneurs in 3rd world countries are getting rich at the expense of the American workers and the citizens in their own countries, thanks to payoffs to members of congress.

May 4, 2013 5:50AM
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Maybe that's because Disney has nothing to do with it, and apparently Disney wants nothing to do with fixing the problem either.  Disney does not do production in those countries, they pay other people (offensively little) to do the production for them.  I still don't understand why it is legal for a corporation to break the laws of its home country.  I'd love to see the executives of all these companies made to work in their own factories for 1 year, and survive on only that money earned.  I'd really like to see that.  That would be a proper reality TV show.
May 3, 2013 2:59PM
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It would be nice to see some of these jobs return to american shores; but we all realize that won't be happening any time soon.  Excessive government mis-regulation, union demands, spiraling taxes, the affordable? health care act; plus many other factors preclude any improvement.  You simply cannot run a business that would have to spend a hundred bucks to make something that will be unsaleable due to its price tag.
May 3, 2013 4:20PM
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Sadly, Human life is cheap and one nation enslaving another is a repeating them in history. But for a the nah sayers, what would these people do for work if these factories weren't there?? 
May 10, 2013 9:09AM
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"Factory owners there are worried that other apparel makers will follow the lead of the media and entertainment giant (Disney)."

Well somebody has to the first one to put their foot down and say NO MORE. I'm sorry but Bangladesh is a cesspool with no concerns for human life.  Clean up your act and maybe we'll come in another century or so.

May 6, 2013 3:04AM
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Disney probably can't sell the overpriced hunk anyway. Bring the jobs to America, North America.
May 3, 2013 11:47AM
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Why isn't Disney having caps made here? I mean they're American as ....whatever, why don't they provide the jobs here? I think we know why, for the same reason Bush sent all those other jobs away! As of today I'm boycotting anything Disney!
May 3, 2013 7:29PM
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You can start your own company or corporation or business.  Don't rely on the big name companies.
May 10, 2013 10:55AM
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When you buy something at Disney Land or World, Wal-Mart, etc., it "should say", Made in America, period.  That's what's wrong with America, companies like Disney and Wal-Mart, etc., etc., GREED!
May 10, 2013 10:49AM
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Why doesn't "Disney, The Gap and Wal-Mart" just bring that work back to the USA?  The Gap spending 22 million there instead of here (USA) on safety measures.  That's all Corporate GREED, period.  Instead they have work done in those Countries paying them a $1.00 a day so that the Companies and Owners can salivate with Greed thinking about all the profits they will make on the backs of those poor people and the unemployment here in the USA were they will sell their stuff at high prices.  The Republicans love it, Corporate Greed, period.  They will do anything for their Rich and Wealthy while at the same time piss on the Middle Class, the Poor and Seniors, it's the Republican Way.   GREED, GREED, GREED!
May 10, 2013 10:39AM
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"This industry is very important to us," Azim, a factory owner, told the paper. "Fourteen million families depend on this. It is a huge number of people who are dependent on this industry.

 

What about the fourteen million families in this country, that could benefit from this industry???

May 10, 2013 10:13AM
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"Consumers are starting to realize that there's a pretty high price to be paid for cheap fashion."

The author has revealed their bias against Wal-Mart and other non-union companies.
It's the responsibility of the local governments to set and enforce safety standards for their workers, so let's put the blame where it belongs.

Consumers will continue to shop where they get the best prices.
May 10, 2013 10:10AM
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Why is it that an American based, multi-billion dollar company doesn't support the American people and produce their products here in America. Disney products are high priced so its not as though they are trying to get the bargain production price so as to pass on the savings to the consumer. If American companies like Disney continue to produce their goods overseas, eventually there won't be enough Americans with jobs who can afford to go to the Disney Parks. Buy American, support Americans!!
May 10, 2013 9:40AM
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A good decision by Disney, exploiting the desperation of people for profit is not the right thing to do.  We need in our "must have" society to pay a little more and have a little less so that what we buy can be made here..
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