August 6, 2021

Made in Bangladesh: As Bangladesh Becomes Export Powerhouse, Labor Strife Erupts

Dozens of people were bloodied and hospitalized. The officers were cracking down on protests at two garment factories inside this industrial area in western Bangladesh. But they were also protecting two ingredients of a manufacturing formula that has quietly made Bangladesh a leading apparel exporter to the United States and Europe: cheap labor and foreign investment.

Both were at stake on that March morning. Workers earning as little as $50 a month, less than the cost of one of the knit sweaters they stitched for European stores, were furious over a cut in wages. Their anger was directed at the Hong Kong and Chinese bosses of the two factories, turning a labor dispute into something potentially much larger.

“If any foreigner got injured or killed, it would damage the country’s image around the globe,” said a police supervisor, Akbar Hossein, who participated in the crackdown. “We all know the importance of these factories and this industry for Bangladesh.”

Bangladesh, once poor and irrelevant to the global economy, is now an export powerhouse, second only to China in global apparel exports, as factories churn out clothing for brands like Tommy Hilfiger, Gap, Calvin Klein and HM. Global retailers like Target and Walmart now operate sourcing offices in Dhaka, the capital. Garments are critical to Bangladesh’s economy, accounting for 80 percent of manufacturing exports and more than three million jobs.

But with “Made in Bangladesh” labels now commonplace in American stores, Bangladesh’s manufacturing formula depends on its having the lowest labor costs in the world, with the minimum wage for garment workers set at roughly $37 a month. During the past two years, as workers have seen their meager earnings eroded by double-digit inflation, protests and violent clashes with the police have become increasingly common.

In response, Bangladeshi leaders have deployed the security tools of the state to keep factories humming. A high-level government committee monitors the garment sector and includes ranking officers from the military, the police and intelligence agencies. A new special police force patrols many industrial areas. Domestic intelligence agencies keep an eye on some labor organizers. One organizer who had been closely watched, Aminul Islam, was found tortured and killed in April in a case that is unsolved.

“The garment industry is No. 1 for exports and dollars for the country,” said Alonzo Suson, who runs the Solidarity Center in Dhaka, an A.F.L.-C.I.O.-affiliated labor rights group. “Any slowdown of that development is a national security issue.”

For the Obama administration, which has cultivated Bangladesh as a regional ally in southern Asia, labor unrest has become a matter of growing concern. In a May visit to Dhaka, Secretary of State Hillary Rodham Clinton raised labor issues and the Islam murder case. In June, Ambassador Dan W. Mozena warned Bangladeshi garment factory owners that any perception of a rollback on labor rights could scare off multinational brands and damage the garment industry. “These developments could coalesce into a perfect storm that could threaten the Bangladesh brand in America,” he said.

For global brands, which are forever chasing the cheapest labor costs from country to country, Bangladesh has been a hot spot, especially as wages have risen in China. McKinsey, the consulting giant, has called Bangladesh the “next China” and predicted that Bangladeshi garment exports, now about $18 billion a year, could triple by 2020.

But in late July, representatives from 12 major brands and retailers, alarmed by the rising labor unrest, prodded the Bangladeshi government to address wage demands, a suggestion rejected by the labor minister. “No reason to be worried,” Khandker Mosharraf Hossain, the minister, told reporters, noting that brands were not canceling orders.

Bangladesh was born in bloodshed during a 1971 war of independence from Pakistan and has since gyrated between military rule and fragile democracy. It has about 150 million people and is one of the most densely populated countries in the world. Derided by Henry A. Kissinger as the world’s “basket case,” Bangladesh has since made considerable progress on fronts like women’s literacy, juvenile and maternal mortality, per capita income, and life expectancy.

Article source:

Japan Prosecutors Raid Olympus and Former Executive’s Home

TOKYO (AP) — Japanese prosecutors raided the headquarters of Olympus Corp. and the home of its former president Wednesday as part of an investigation into the cover-up of massive losses at the camera and medical equipment maker.

A trail of dark-suited officials was shown on national television marching solemnly into the company’s downtown Tokyo office building.

Olympus said it would fully cooperate with the investigation by prosecutors, police and financial authorities.

“We apologize deeply again for the great troubles and worries we have caused our shareholders, investors, customers and others,” it said in a statement.

Tokyo prosecutors said the home of former President Tsuyoshi Kikukawa, who is suspected of helping to orchestrate the cover-up, was also raided, as were the offices of three companies used in the scheme.

The deception at Olympus dates back to the 1990s and involved an elaborate scheme to hide 117.7 billion yen ($1.5 billion) in investment losses. It only came to light in October when then President Michael Woodford blew the whistle on what he thought was strange and excessive spending.

Woodford, a Briton, had been a rare foreigner to head a major Japanese company.

The scandal has raised serious questions about corporate governance in Japan, and whether major companies are complying adequately with global standards.

Woodford was fired after he confronted the company’s board of directors with his doubts. In recent weeks, he has been trying to stage a comeback to the top, by appealing to shareholders, employees and others that his return will work to clean up Olympus.

Woodford had questioned exorbitant fees for advice on the acquisition of British medical equipment maker Gyrus Group and other expensive acquisitions in 2008.

Woodford is demanding the resignation of the entire board, including President Shuichi Takayama, who replaced him and initially declared in a news conference that the spending was legitimate.

The battle over who will lead the camera and medical equipment maker and its 40,000 employees could come to a head at the next shareholders’ meeting. A date has not been set.

The new Olympus management has expressed a willingness to consider alliances in an effort to get its finances back in order.

Olympus delayed reporting earnings because of the accounting irregularities, but met the stock exchange’s deadline earlier this month, averting automatic removal from the market.

The company could still be delisted if the criminal investigation discloses major misbehavior.

In the past, erring executives have rarely got prison time for their roles in shady bookkeeping.

Covering up for investments that went sour after the 1980s “bubble” economy burst was so widespread in Japan that a special term describes the practice, “tobashi.”

Olympus stock plunged amid the scandal but has recouped some of those losses in recent weeks. On Wednesday it slipped 1.4 percent to 1,050 yen.


Follow Yuri Kageyama on Twitter at

Article source:

Corner Office: Lars Bjork: Order Is Great. It’s Bureaucracy That’s Stifling

 This interview with
Lars Bjork
, C.E.O. of QlikTech, a data software company, was conducted and condensed by
Adam Bryant

Q. Do you remember the first time you were somebody’s boss or manager?

A. It was in 1984.  I had the opportunity to work in construction in New York, coming right out of undergrad.  I was sick and tired of school at the time. I didn’t want to study anymore.  My uncle had built one of the largest construction companies in the world, so he got me a job on the Throgs Neck Bridge in New York as an assistant supervisor on site. 

I was 22, and the men were double my age and tough.  And I think the only way I could go about it was just walk up and try to speak to them and try to earn their respect, which I did.  It took some time.  It was rough at the beginning, but I learned a lot from that.  It was hard, tough, but a very fair environment.

Q. How did you handle it?

A. They looked at me skeptically.  Who is this kid just out of school?  He doesn’t know anything about what you really do on a construction site like this.  But I was a foreigner, and they were curious, so they said, let’s hear him out, see who he is. 

Then it just comes down to proving yourself — things you give them advice on or things that you tell them that are solid and sound, and weren’t just pulled out of the air.  I’ve always been very open toward people.  I never kept anything to myself, and I just explained to people what was on the agenda for the day, and why we were doing this.

Q. What has been your approach to leadership?

A. I have never seen myself as a leader, someone who says I’m going to become a C.E.O.  I never did that.  And that goes even for where I am now.  I didn’t start as C.E.O. at this company. It was never something that I put on a map, where I said, I’m going to get there.  It’s more the result of me very much earning the respect of the people I work for, and they said, this is a guy we’re going to promote.  Q. What else?

A. I’ve always been competitive, and I’m also curious.  I want to learn things, and that’s why, early in life, I put myself in challenging situations, like coming to the United States from Sweden to work here. I’m also more humble today than I was 20 years ago.  I am by no means the expert.  I’m not the smart guy in the room.  I might have an ability to bring people together and get the best team or have a sense of what’s needed. Being the coach — that’s sort of what it’s been for me.

Q. What were some other big lessons?

A. I once worked for somebody who managed in such a terrible way that I decided to never work with people who treat people badly.  Life is too short for that.  Let’s work with people who appreciate you and you appreciate them. It was such a terrible experience, so I left the company because I didn’t want to be associated with that. 

For me, it’s super-important — if I love my job, why wouldn’t I want the same thing for my co-workers? They will feel good and they will enjoy working and they will stay, and I know it will show up in the results as well.  There is no other way to do it.  Motivated people will go way further than anyone else. 

Q. Tell me about the culture at your company.

A. We developed five core values that we live by.  The first one is “challenge,” because we are a disruptive software company. Always challenge the conventional, because if you follow others, you can at best be No. 2.  And if you want to win, you’ve got to find your own way to the top. And we challenge each other at QlikTech, because if you’re complacent, you’re not going to survive. 

The second one is move fast — because we are building a hypergrowth company. It’s O.K. to make mistakes, just don’t make the same mistakes.  Learn from them. The third one is, be open and straightforward.  What that means is just be open if you think something is wrong.  We hear everyone out.  It’s important that everything is on the table, because somebody might have something brilliant to say.  But when we leave the room and we’ve decided on one thing and your view might not be incorporated in that, you still have to respect the decision.   

The fourth one is teamwork for results.  This is not about the individual.  This is about the team, the power of the team.  In our company today, we have 28 offices in 23 countries, so our team is a virtual one. You reach out and you speak to people everywhere, and you learn a lot from people that way, because there are a lot more similarities between cultures than you might think. 

The fifth one is take responsibility. You’re given authority to be part of a lot more than just your position, but some responsibility also comes with it.  And if you want to grow fast, you have to put into people’s DNA the idea of being cost-conscious. That’s why we all still travel coach.

Article source: