The story of how a manufacturing company failed under pressures from GATT, NAFTA, and sweatshops.
THE BUSINESS: Maker of high-quality women's clothing
FOUNDED: 1975 CLOSED: 1995
PRIMARY CAUSE OF DEATH: Fallen trade barriers
SECONDARY CAUSE OF DEATH: Underground economy
For nearly 20 years, Ca-Ce-Len Manufacturing Co., of Granger, Tex., did right by everyone--its customers, its workers, and its owners, the Benad family. Competing in the crowded women's apparel industry, Ca-Ce-Len (named for Carolyn, Cecilia, and Lendy, three of its original employees) produced high-quality garments at margins that left room for above-average wages, humane working conditions, and a healthy profit.
In that way, tiny Ca-Ce-Len, which employed 125 and posted revenues of $1.5 million during its peak year of 1979, resembled countless U.S. manufacturers that grew in the sheltered postwar economy. But as trade barriers have fallen and the underground economy has exploded, the rosy economics have altered. For Douglas Benad, who bought out one of Ca-Ce-Len's partners in 1981, the choice came down to this: "Either I could get out while I could still pay my bills and my workers and have something, or I could keep on going and lose it all." By 1995 revenues had shrunk to $1 million. At year's end, Benad, who owned the company with his wife, called it quits.
Ca-Ce-Len always prided itself on being a cut above the competition. Whereas most small factories churned out one product in mass quantities, Ca-Ce-Len cross-trained its employees and offered customers a full line. "We ran skirts, we ran pants, we did dresses, we did jumpsuits," recalls Benad. In an industry notorious for low pay and dismal conditions, Ca-Ce-Len's workday ran from 7:30 a.m. to 4 p.m. Benad explains, "Employees could drop their kids off in the morning and pick them up in the afternoon." During the hot summers, central air-conditioning kept the plant from turning--literally--into a sweatshop. "We were like a family," says 60-year-old Gladys Jones, a former supervisor whose salary put three daughters through college. Jones has been unable to find work since Ca-Ce-Len closed.
Benad blames the demise of Ca-Ce-Len on shifts in the labor market, which surfaced during the past five years and accelerated after the passage of the North American Free Trade Agreement, in 1993, and the General Agreement on Tariffs and Trade . That's when he began losing large, 8,000-piece orders to foreign manufacturers with lower labor costs. "When the big orders went overseas, all that was left were small ones," says Benad. "For those, I had to compete with all the illegal home sewers in Dallas." According to a Labor Department study, about 400 Dallas-area businesses employ more than 40,000 illegal workers doing piecework at home.
"Ca-Ce-Len was one of the last legitimate apparel contractors in Texas," laments Joe Allen, a retired manufacturer. Allen used to employ 2,500 workers in his clothing factories. Today he works with a coalition of labor and business groups to fight illegal, home-based garment manufacturers. "In our area, the sweatshops have moved into the living rooms," Allen says, "and have destroyed hundreds of businesses like Ca-Ce-Len."