N.C. company may lose Marine Corps apparel production license
By JOHN RAMSEY | The Fayetteville Observer | Published: December 13, 2012
Fayetteville apparel company M.J. Soffe is in jeopardy of losing its license to produce clothing with Marine Corps slogans and logos after a fire at a factory in Bangladesh last month killed more than 100 workers.
Evidence found in the rubble suggests that Soffe products were being made at the Bangladesh factory rather than in the United States, as stipulated in the contract between the Marine Corps and Soffe's parent company, Delta Apparel of Duluth, Ga.
The fire also has spurred an investigation into whether Soffe has been producing apparel for colleges and universities in inhumane working conditions.
And Wednesday, a group of congressmen sent a letter to President Obama, blasting Soffe and urging the federal government to ensure that taxpayer money isn't being spent on companies that fail to guarantee basic levels of workers' rights.
Officials with Delta Apparel deny any wrongdoing and say they have policies in place to ensure humane working conditions.
Two days after the fire, Ken Spires stepped down as president of Soffe, records filed with the federal Securities and Exchange Commission show.
Spires, who became president of Soffe eight years ago, declined Wednesday to explain his decision to resign on Nov. 26.
"It's hard for me to comment on that," Spires said, directing questions to Delta Apparel.
Spires confirmed that he still works at Soffe but declined to give his new job title.
Patrick Dorton, a spokesman for Delta Apparel, said "there is absolutely zero connection" between Spires' resignation and the fire in Bangladesh. Dorton said Delta Apparel wasn't even aware of a possible connection with Soffe and the fire until after Spires resigned.
Soffe and Delta Apparel are now trying to explain why their order sheets and design specifications for clothing bearing Marine Corps logos and slogans were found at the Bangladesh factory, which repeatedly failed safety inspections and had lost its fire-safety clearance.
According to published reports, survivors say fire extinguishers in the building didn't work and they were told to return to their sewing machines after a fire alarm sounded. The eight-story building had no emergency exits, and some of the victims jumped to their deaths.
Three factory managers were arrested by Bangladesh police. They are accused of locking doors and preventing workers from escaping the deadly blaze.
Working conditions at the plant have drawn sharp criticism from workers' rights advocates.
Delta issues denials
Delta Apparel has denied any knowledge that the Tazreen Fashions factory was making its garments. Other major companies, including Disney and Wal-Mart, have made similar denials.
Activists took pictures in the burned-out factory of designs and order sheets that suggest shirts and sweatpants with Marine slogans were being produced for Soffe there, according to ABC News.
"At no point did Delta Apparel, our subsidiary M.J. Soffe, or anyone in our company ever authorize the manufacture of any goods at the Tazreen facility," Dorton, the Delta spokesman, said in an email. "No United States military product or Marine Corps-licensed product was ever shipped to us from Tazreen."
Dorton said that until earlier this year, Delta Apparel had a business relationship with the parent company of the Tazreen factory, Tuba Limited. He said when Delta asked Tuba Limited why the sample books and other documents were found at the Tazreen factory, it responded that the documents had been stored there as part of the parent company's "general marketing efforts."
The Marine Corps' agreement with Soffe requires that any Marine logos be attached to garments at the company's plant in Fayetteville. The Marine Corps has begun the process of terminating its licensing agreement with Soffe but will allow the company time to respond, a spokesman for the Marines said Wednesday.
Dorton said Delta Apparel is a member of the Fair Labor Association and is committed to decent and humane working conditions. Factories used to produce its garments are inspected to make sure standards are in place, Dorton said.
Last year, when Soffe received a shipment of nonmilitary clothes from the Tazreen factory, Soffe immediately ordered a stop to all production there because the factory wasn't authorized to make Soffe products, Dorton said.
Soffe is an outfitter for the Army, Navy, Air Force, Marine Corps and Coast Guard.
The company, which employs about 575 employees in Fayetteville, has been awarded more than $10.7 million in Department of Defense contracts since 2000, according to a website maintained by the federal Office of Management and Budget.
Those numbers don't include lucrative licensing agreements that allow the company to make and sell apparel with official military logos. Delta Apparel has a wide variety of licensing agreements, including with most colleges and universities.
A Delta spokesman declined to say how much the company earns from any particular license.
The company paid $15.2 million in royalty expenses for all of its licensing agreements, according to an annual report for the year that ended June 30.
"The loss of or failure to obtain, renew or extend license agreements on favorable terms could adversely affect our sales and results of operations and have a material adverse effect on our financial condition and results of operations," the annual report states.
Soffe has ties with the military dating back to 1946, when Milton James Soffe founded the business.
Workers' rights groups are calling for Soffe and other companies to make sure workers and their families affected by the fire are fairly compensated. They're also advocating a full investigation and improved efforts to increase fire safety, even if it means slightly higher costs for customers.
The Workers Rights Consortium, which represents colleges and universities that have license agreements with Soffe, is investigating to see if any school-related apparel has been produced in inhumane working conditions, said Scott Nova, the consortium's executive director.
"Our focus is on trying to get to the bottom of this," Nova said. "This fire ought to be a very loud wake-up call to them that they need to make sure all their factories are operating safely."
The letter sent to Obama on Wednesday that blasts Soffe was signed by seven Democratic congressmen, led by Sen. Tom Harkin of Iowa. The letter urges better federal oversight of companies to guarantee at least basic levels of workers' rights.
"We applaud the Marine Corps for acting quickly to terminate its licensing agreement with Soffe. However, it should not take the deaths of 112 people to demand accountability," their letter said. "The Marine Corps should lead by example and make certain that their supply contracts and licensing agreements do not have provisions that may make it easy for manufacturers to hide the source of their product, such as only affixing a logo at U.S. facilities."
Staff writer John Ramsey can be reached at email@example.com