US embassy cable - 04SANTODOMINGO3424

DOMINICAN GRUPO M SHUTTING DOWN MANUFACTURING OPERATION IN HAITI

Identifier: 04SANTODOMINGO3424
Wikileaks: View 04SANTODOMINGO3424 at Wikileaks.org
Origin: Embassy Santo Domingo
Created: 2004-06-14 11:06:00
Classification: UNCLASSIFIED
Tags: BEXP BTIO DR ELAB ETRD EINV HA
Redacted: This cable was not redacted by Wikileaks.
This record is a partial extract of the original cable. The full text of the original cable is not available.


 
UNCLAS SANTO DOMINGO 003424 
 
SIPDIS 
 
DEPT FOR WHA/CAR, DRL; DEPT PASS USTR 
 
E.O. 12958: N/A 
TAGS: BEXP, BTIO, DR, ELAB, ETRD, EINV, HA 
SUBJECT: DOMINICAN GRUPO M SHUTTING DOWN MANUFACTURING 
OPERATION IN HAITI 
 
 
1.  SUMMARY.  Dominican apparel company, GRUPO M, is close to 
shutting down their apparel plant in Ouanaminthe, Haiti due 
to "Workers' Struggle," a group of activist employees who 
have made the plant inefficient and ineffective.  GRUPO M 
President, Fernando Capellan, stated that the company plans 
to let go 200 employees this Friday, June 11, with another 
500 on Monday, June 14.  A total shut down of the plant could 
occur shortly thereafter.  Capellan says that GRUPO M had 
received no assistance from either Haitian or Dominican 
authorities on the matter and that the company would be 
willing to reopen its operations if it gets the appropriate 
support.  END SUMMARY. 
 
2.  In the fall of 2003, in a move that was hailed by many as 
a catalyst for more integration between the Dominican 
Republic and Haiti, Dominican apparel company GRUPO M began 
operations in the Haitian town of Ouanaminthe, which is 
located directly across the border from the Dominican town of 
Dajabon (a major trading area).  Less than one year later, on 
June 9, local dailies have reported that GRUPO M is 
relocating their operation from Ouanaminthe in order to 
ensure the safety of its employees and comply with its 
contractual obligations.   GRUPO M President Fernando 
Capellan says the main reason for the shutdown is the 
pressure the company has been receiving from a group of 
activists within the plant who call themselves "Batay 
Ouvriye" ("Workers' Struggle").  The group, led by a Ms. 
Yanneck Etienne, has been harranging other employees and 
making claims of worker exploitation over the last few 
months.  Attempts by GRUPO M to discuss issues of concern 
with Ms. Etienne have been unsuccessful, Capellan said. 
 
3.  Capellan stated that the group has made normal plant 
operations impossible.  As an example, Capellan explained, in 
February the plant assembled 30,000 pants with 400 employees 
but that last month the plant managed to only assemble 15,000 
pants with 700 employees.  The plant currently has 1,000 
employees.  As things stand, the company expects to lay off 
200 workers and move out some sewing machines and textile 
equipment by Friday, June 11 with another 500 workers to go 
on Monday, June 14.  The remaining employees will be phased 
out over the next few days until a total shutdown is achieved. 
 
4.  Capellan complained that the company had received no 
assistance on the matter from either Haitian or Dominican 
authorities.  Since these activities have taken place on 
Haitian soil, the Embassy has been unable to assess the 
situation directly.  Capellan indicates that he would be 
willing to reopen the apparel plant if working conditions 
improve, but the current situation is untenable. 
 
5.  COMMENT.  GRUPO M's decision is a potential set back for 
trade and investment between the Dominican Republic and 
Haiti.  The move also suggests that the cross-border 
subcontracting strategy may not be a viable approach for 
GRUPO M and other Dominican apparel companies seeking to 
improve competitiveness vis-a-vis China in preparation for 
the ending of quotas under the Multi-Fibre Agreement.  GRUPO 
M's operation was the first attempt at co-production with 
Haiti.  END COMMENT. 
 
6.  Port-au-Prince minimize considered. 
HERTELL 

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