UPDATE ON U.S.-OWNED MAQUILA IN GUATEMALA

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