Keds are Made in China Kunshan Sun Hwa Footwear Co. Ltd.  Kunshan City Jiangsu Province, China

Keds in China

Summary - Keds are Made in China 16-year-old girls assemble Keds sneakers applying the toxic glue with their bare hands, the only tool they are given is a toothbrush. The Sun Hua Footwear Company is a South Korean-owned factory located in Kunshan City, which is about 65 kilometers west of Shanghai. The factory is surrounded by a 15-foot high concrete wall topped with barbed wire; the heavy metal entrance gate is kept locked and is patrolled by armed security guards. There are 1800 production workers locked in the factory, 90 percent of them young women 16 to 25 years of age.  There are also 100 office workers, including 30 managers from South Korea.

16 year olds put toxic glue onto Keds sneakers with their bare hands

One hundred percent of Sun Hwa’s production is for export.  When we visited the factory in July 1999, they were producing Keds sneakers for Stride Rite.  However, in the showroom we saw sneaker and tennis shoe models they had done for Guess, Gap, Tommy Hilfiger and Liz Claiborne.  They also make rubber boots and ski boots.

Going Through the Factory your Eyes Stung from the Toxic Glue There are anywhere from 40 to 90 parts in a sneaker and some of those pieces are glued together.  In the Kunshan Sun Hwa factory, like most other footwear plants in China, they use toxic glues.  On the floor next to some of the young workers in the adhesive section were shiny  ten-gallon tin cans of glue marked “XXX STRONG” on which, even if there were further precautionary warnings, the women obviously could not read them since they would be in English.  The top of the cans were cut off and the girls dipped small bowls into the can to draw the glue out, which they then applied to the sneaker parts using their bare hands; the only tool they had been given was a toothbrush.  The girls look 16 years old.  When you went through the adhesive department where they worked your eyes stung from the strong chemical vapors.  There was no special ventilation, nor were gloves or masks provided to the workers.  Every young worker was a specialist, doing the exact same operation over and over again, hour after hour, day after day.  For example, we saw one young girl marking a pattern with a pencil on canvas pieces that would eventually make up the uppers of the sneakers, doing the same motion 600 times an hour.  By the end of a numbing 10 hour shift she would have completed 6,000 such operations. As we went through the factory no one looked up, none of the workers were talking to each other, and no one smiled.  Everyone was bent over glued to their workstations concentrating to keep up with the flow of the production line.   The factory was clearly run with a strict military-style discipline.  Workers were strongly encouraged to use the bathrooms during their lunch break from noon to 1:00 p.m.  If they needed to use the toilet any other time of the day they would first have to get permission from their section chief. At the end of the day, the workers had to queue up and leave in single file, as if they were in the military, or rather grammar school.  The person sitting at the front of each production line had a cardboard sign with the production line’s number on it.

Workers making Keds sneakers   When he or she was given the signal that it was all right to stand up, everyone else in the line also stood, queued up, and left single file, production line after production line.  At least half the workers lived in factory-owned dorms, which were said to be nearby.  Everyone left on bicycles, which was all they could ever dream of affording.  The Sun Hwa managers said their factory provided very good jobs, at good wages, though on the other hand it seemed an apparent contradiction when they admitted most workers leave after just one and a half years.  If the jobs were so good why was everyone leaving?    According to the company, the average production wage was 600 rmb per month, or $72.29 US, or about $16.68 a week.  We could not verify this since we chose not to speak with any of the workers inside the factory, lest they should say the wrong thing and find themselves fired after we left.  This 600 rmb figure would include all incentives and production bonuses.  The management said they paid the incentives to the whole production line rather than to individuals which was no doubt used as a strategy to make sure workers would pressure each other to work faster so they would all get their small, but very needed bonus.  It is not known whether the 600 rmb monthly figure is before or after the company’s deductions for food and dorm accommodations.

 

There was no special ventilation, nor were gloves or masks provided to the workers

Company spokespeople said that the factory operated on a daily shift of 9 hours from 8:00 a.m. to 5:00 p.m., five days a week, and with an hour off for lunch.  We could not independently confirm whether this was accurate or not, though it would certainly be the exception from standard factory hours across China if they were really working just the legal 40 hour work week. Coming to China “For the Cheap Labor” and “No Unions” The Kunshan Sun Hwa factory was opened in 1991.  The company general manager said they came to China “for the cheap labor” and “to get away from the unions in South Korea”, where they no longer operate any factories.  The fact that the minimum wage in South Korea is only $1.60 an hour says a lot about current wages in China.  We were told that it takes three to five years to get a factory up and running smoothly and at full capacity.  Now they could turn around an order from the United States in just three months, from the date the order arrived to the delivery of the sneakers at a U.S. port.  Most of their raw materials are imported from South Korea, and the rest come from other nearby Asian countries.  Now they do $30 million of business a year.

According to the company the average wage was:                         42 cents an hour $3.34 a day  (for an 8  hour day) $16.60 a  week (for a 5 day, 40 hour work  week) $72.29 a month $867.47 a year

 

If the Sun Hwa factory was following social security health and pension benefit laws in China – which few export assembly factories appear to be doing – then payment of these legal benefits would add 50 percent to their cost of labor.  So if the workers were paid 600 rmb a month, their fully loaded wages including all direct and indirect costs would amount to 900 rmb per month or $1,301 a year.  For all 1800 workers their total annual payroll would be $2.34 million.  This means that their total direct and indirect labor costs for all 1800 production workers would amount to less than 8 percent of their $30 million in annual revenues.  Sun Hwa’s management also said they expected the Chinese currency, the rmb, to be devaluated eventually as it was already trading in the local black market at 8.7 rmb to the $1.00 US, while the official rate was still 8.3 rmb to the $1.00 US.  This represents nearly a 5 percent devaluation (0.048192).

Operating a Factory in China: It all Depends on Who You Know and What Bribes You Give  It’s called “Guanxi”, or literally, the relationship business.  You cannot do business in China without developing personal contacts with the local bureaucrats who make, change and implement the law, often in an arbitrary manner.  Sun Hwa management explained to us that whenever you need to get something done, then every time you must lobby the person in charge, whether in the tax office or the customs department, and pay a bribe.  Business in China runs according to who you know and who you pay.  A case in point.  The Kunshan Sun Hwa factory had too much work and, as it often does, it sourced some stitching work to a local company.  When the first lots came back, the Sun Hwa quality control managers saw the work was horrible, so they pulled the rest of their materials from the subcontractor and ended the contract.

 

The company general manager said  they came to China "for the cheap  labor" and "to get away from the unions in South Korea"

At any rate, in China the laws can be changed quickly and then implemented with little warning, and as there are no exact regulations to implement the laws, penalties can be handed out in an arbitrary manner by the local authorities.  This is why you have to lobby people and pay bribes.

Not long after that, $50,000 (U.S.) disappeared from Sun Hwa’s bank account.  No explanation was ever given, but the local subcontractor had obviously contacted the local authorities and together they decided to punish the South Korean factory for breach of contract, even though quality control standards were clearly written into the contract.  Sun Hwa management responded not by going to court, but by paying the local mayor a little visit, who then and there, on the spot, reduced the fine by 66% and then returned $33,00 to the company.  They did not say, but perhaps a little inducement was given to the mayor in appreciation for his fairness.

The Export Assembly Factories Want China in the WTO Sun Hwa management explained that they want China in the World Trade Organization (WTO) to end the arbitrary ways the law is implemented.  In other words, now that they had set up factories to access the “cheap labor” in China, they wanted their investments secured and protected within the solid, unchanging framework of the law.  No one can blame them for that, but why do they attack the workers in China who are asking for the exact same thing, a level playing field, where worker rights are equally legally guaranteed and fairly implemented?  If the companies can have copyrights, why should not workers’ rights also be protected?    One hundred percent of the women’s and children’s Keds/Stride-Rite sneakers we found in Macy’s in New York City were made in China.

At the end of the day, workers must leave Keds' factory in a single line.

Bikes are all the factory workers can afford

 

Production of Ked's sneakers at Kunshan Sun Hwa Factory

 

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