US embassy cable - 05GUATEMALA578

UNCLAS GUATEMALA 000578 
 
SIPDIS 
 
DEPT FOR CA/OCS 
 
E.O. 12958: N/A 
TAGS: ELAB, CASC, ECON, ETRD, PHUM, ASEC, EAID, GT 
SUBJECT: UPDATE ON U.S.-OWNED MAQUILA IN GUATEMALA 
 
REF: A. GUATEMALA 492 
 
     B. JACOBSEN-NYSTROM E-MAIL 2/22/05 
 
1.  Although production at Guatemalan maquila J&R Sportswear 
has stopped, the company itself has not yet formally closed 
(ref A).  Company management filed for a legal suspension of 
work at the maquila.  The Ministry of Labor has not yet ruled 
on that application, but sources tell us that the application 
is likely to be approved. 
 
2.  Factory manager Frances McCall (U.S. citizen) told us 
that once the legal suspension of work is granted, 
representatives from the local company, the company's 
Florida-based owners, and the employee's association can 
restart negotiations regarding the employees' terms of 
dismissal. 
 
3.  An official from Gator Inc., the Florida-based owner of 
J&R, told us that they will negotiate severance packages 
below what is mandated by Guatemalan law.  Representatives of 
the Ministry of Labor and private attorneys tell us, however, 
that there is no legal way to accept terms below that which 
is mandated by Guatemalan law, even with the workers' consent. 
 
4.  The final shipment of apparel from J&R remains at the 
factory.  McCall told us that legal representatives for the 
employees' association obtained a court order to prevent 
movement of the container. 
 
5.  McCall told us that she is no longer under constant 
surveillance by the workers (ref B).  She is free to move 
about in Izabal but visits the factory only to handle 
administrative issues. 
HAMILTON