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Gap's Labour Problem

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  • December 5, 2012
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GAP’S LABOR PROBLEMS

I. COMPANY PROFILE

Gap, Inc. is a chain of retail stores that sells casual apparel and shoes for men, women, and also children. This company headquartered in San Fransisco and the stores have different names, including : Gap, Banana Republic, Old Navy, GapKids, and BabyGap. Gap was founded about thirty-six years ago, when Donald Fisher and his wife, Doris, opened a small clothing store near San Fransisco State University in 1969. Then Gap grew into 6 stores in 1971. In 1983, Fisher enticed Miller Drexler as the new president while Fisher became CEO and chairman of the company. Drexler transformed the company by replacing the drab lines of the clothing the store had been stocking with new brightly colored lines of rugged, high quality cotton clothes. In 1995, Fisher retired as CEO and Drexler took over that position, which had 1.348 stores. Although competition was intense, Gap continued to prosper and when Drexler retired in 2002 to be replaced by Paul Pressler, which the company operated over 4000 stores. At the present almost all Gap merchandise is made under contract for the company by some 3000 supplier factories that are owned and operated by foreigners in 50 countries, most of which are developing nations where working conditions are often exploitive. Gap’s profits reported in January 2004 were $1.03 billion on sales of $15.85 billion. Gap was one of the first companies to adopt a code of ethics for its factories. Gap is threatening the U.S. Labor Laws such as federal overtime laws, worker health and safety laws.

There is a set of sourcing principles and guidelines as a “code of conduct” for the Company includes its suppliers had to : 1) Avoid discrimination,
2) Use no forced or prison labor,
3) Employ no children under 14 years of age,
4) Provide a safe working environment for employees,
5) Pay the legal minimum wage or the local industry standard, 6) Meet all applicable local environmental regulations,
7) Allow the...