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Bottom Line of Business Set Stage for Tragic Factory Fire in Bangladesh

Last month, 112 workers in a Bangladeshi garment factory died in a horrific fire that swept through the building where they worked making clothes that were destined for sale in the United States and Europe.

Tazreen Fashions Ltd., the factory’s owner, was processing orders for some of the world’s top retailers, including Walmart and Sears, when smoke, flames and toxic fumes engulfed the building where more than 1,000 employees labored.

Business had been good lately for Tazreen and the company’s owner, Delowar Hossain. In fact, at the time of the blaze, Tazreen was busy expanding its building by adding several more floors to it, in anticipation of even more international clothing orders coming its way.

Once considered an economic basket case, Bangladesh, a poor country that was carved from the eastern part of Pakistan in 1971, has become, over the past several years, a major garment manufacturer. It exports apparel worldwide from its 4,500 garment factories, taking in some $19 billion a year.

Low Wages Make Bangladesh an Attractive Factory Market

The reason for Bangladesh’s ascension as the globe’s second-biggest apparel exporter after China? Because of all the world’s low-wage countries, where giant international corporations go to do business, Bangladesh is the best bargain by far. It has the lowest garment worker wages on the planet – at a mere $40 or $45 per month for each factory hand, American stores can hold prices down and stay true to their bottom line.

No doubt Hossain also thought about the bottom line when he failed to make his factory a safe place to work. Perhaps, though, had he not stored mounds of flammable yarn and fabric near the building’s electric generators but sequestered them in a separate fire-proof room, as required by law, 112 people may not have had to die.

In the wake of the fire, both Walmart and Sears distanced themselves from the disaster, claiming that their Bangladeshi suppliers were not “authorized” to produce goods at the Tazreen factory, in the first place. Walmart said that it didn’t even know that Simco Bangladesh Ltd., a local garment maker, was actually acting as its subcontractor.

Because so much work goes to the Bangladesh’s garment factories, U.S. retailers often place orders through a chain of suppliers and middlemen. These local businessmen help dilute the burden of ultimate corporate responsibility and steer their clients’ orders to the manufacturers who offer them the best terms.

A factory that spends less on safety, perhaps one like Tazreen, may be a cheaper place to go to process an order. This also helps lift the middleman’s bottom line.

The Moral to the Bangladesh Fire Story

“So,” you might ask, “what does this have to do with me?”

Christmas shopping, that’s what. This holiday season, millions of Americans will spend billions of dollars on presents and gifts. For most of us, appropriating our dollars as frugally as possible is a practice that warrants little debate. With a finite amount of money to spend, we all need to be concerned with our bottom line.

Last month, 112 men and women – people who sewed and stitched the clothes we buy, that stores like Walmart sell, that middlemen contract for and that factory owners make – were buried before a throng of grieving relatives and friends.

They died in a fire that didn’t have to happen. And while it was the flames that burned them, it was the bottom line that did them in.

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].

Factory fire

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