SAN SALVADOR, El Salvador -- It was a story of hope: a Central American sweatshop transformed into a unionized, worker-run apparel factory thanks to nearly $600,000 in loans and donations, including help from retailers Gap and Land's End, and the AFL-CIO.
Boosters traveled to U.S. college campuses and church basements, promoting the Just Garments plant in El Salvador as a company looking to do well by doing right by employees. Impoverished Salvadorans saw a chance to earn better wages and to have a say in their future.
"We had a dream," said Esperanza Caridad Mejia, a sewing machine operator.
In the end, that's all it was.
Just Garments closed in April, owing 55 former workers $65,000 in back pay and benefits, according to a union official. Employees say they never made more than minimum wage. Many weeks they didn't get paid at all. Some have come forward alleging poor working conditions and unjust firings.
Despite the funds from major retailers and others, steady contracts never materialized. A lender is questioning how money was spent.
Just Garments is now caught in a tangle of recriminations and legal action. The closing has unraveled the once close-knit workforce, split progressive organizations that normally would be allied, and put some U.S. anti-sweatshop groups in the position of having backed a project now accused of engaging in some of the very practices they condemn.
It also has prompted soul-searching by supporters who admit that operating a sweatshop-free factory profitably is easier in theory than reality. Just Garments, some say, lacked sufficient capital, seasoned management or even a market for its products.
"It was not a recipe for success," said Scott Nova, executive director of the Worker Rights Consortium, a Washington, D.C., nonprofit that helped broker a $53,000 contribution of machinery and textiles from Land's End to the venture.
Just Garments emerged from the wreckage of a shuttered Taiwanese garment contractor called Tainan Enterprises. The company closed its Salvadoran operations in 2002 after employees won legal recognition of a union and asked for contract negotiations. Jobless workers were blacklisted from nearby clothing plants, according to anti-sweatshop activists, who pressured some U.S. retailers doing business with Tainan to intervene.
A deal was reached in late 2002. Tainan provided sewing machines and $160,000 in capital to start a factory controlled by unionized employees.
But the company struggled. Tainan didn't supply promised technical assistance. The shop couldn't attract a veteran leader, settling on a manager with limited experience who didn't stick around long. It spent months and much of its start-up capital rehabbing a decrepit facility in Soyapango, an industrial suburb of El Salvador's capital.
When Just Garments opened for business in early 2004, the plan was to manufacture cargo pants for Gap, a former Tainan customer that agreed to give the plant a test order as part of the settlement with workers. But the factory couldn't meet the retailer's quality standards. So Gap paid for a consultant to help it improve its performance and kicked in a $124,000 development grant in exchange for ending the production relationship.
Most of that went for immediate needs such as rent, utilities and salaries, said company administrator Gilberto Garcia. Garcia, who helped organize the union at Tainan, acknowledges that he knows little about business. Workers appointed him to the board of directors of the new company, where he also served as the de facto chief executive and spokesman, largely because there was no one else willing to do it.
Garcia called the settlement with Gap an "amicable divorce." Still, he suspects that someone tampered with Just Garments' test samples to sink its chances of winning the contract.
It's one of a host of dark economic and political forces Garcia contends doomed the factory. El Salvador has a history of repression and violence against organized labor. Garcia said business people wouldn't rent affordable space to the upstart; major clothing labels didn't want to deal with a union supplier; officials in El Salvador's conservative government hamstrung the enterprise with red tape.
"They didn't want us to succeed," he said.
Others say many of Just Garments' wounds were self-inflicted. The consultant's report noted low worker productivity, high defect rates, poor supervision, blown delivery deadlines and no clearly defined business plan. The plant took money-losing subcontracting jobs to keep workers occupied. When the Gap contract fell through, it shifted its focus to making T-shirts, work for which it lacked proper equipment.
"They just didn't seem to know what they were doing," said Rick Roth, the owner of a unionized Rhode Island screen-printing company. The industry veteran visited the Just Garments plant last year on behalf of a Chilean friend named Carlos Salinas who lent $88,000 to the venture and is suing to get it back.
Massachusetts entrepreneur Adam Neiman, founder of a sportswear line called No Sweat that's manufactured in unionized factories, ordered 500 pairs of pants from Just Garments but never repeated. He said 20 percent of the pairs were labeled incorrectly.
"Unions should run unions, and managers should run factories," he said. "The idea that the union could somehow represent the workers and manage the factory simultaneously was a fundamentally flawed model."
Former employee Mejia, 48, has struggled to feed her family since the factory folded, owing her about $1,000. Her husband lost his post at a furniture factory last year, and his new delivery job pays only half as much, $6 a day.
A deeply religious woman whose names mean "Hope Charity," Mejia said the recent hardships have brought her closer to God. But the experience with Just Garments has shaken her faith in the idea that an enterprise founded to improve workers lives can actually deliver. "I would rather work for an exploiter who pays on time," she said.
Marla Dickerson writes for the Los Angeles Times.