Levi Strauss

Levi Strauss & Co. (LS&CO) sells jeans and sportswear under the Levi's, Dockers, and Levi Strauss Signature names in more than 110 countries. It also markets men's and women's underwear and loungewear. Levi's jeans -- department store staples -- were once the uniform of American youth, but LS&CO has been working to reconnect with the niche in recent years. The Haas family (relatives of founder Levi Strauss) owns LS&CO.

Company History
Levi Strauss & Co. begun in 1853 in the wake of the California Gold Rush by Levi Strauss, an immigrant from Bavaria. In 1872, Levi received a letter from Jacob Davis, a Reno, Nev., tailor, describing the interesting way he made pants for his customers: he placed metal rivets at the points of strain to make the pants stronger for the laboring men who were his customers. He didn't have the money to patent his process, so he suggested that Levi pay for the paperwork and that they take out the patent together. Levi was enthusiastic about the idea and the patent was granted to both men on May 20, 1873. The two men started to produce these "waist overalls" in San Fransisco, which took the company into the blue jeans manufacturing that it is known for today. When Levi Strauss died in 1902, he left a thriving manufacturing and dry goods business to his four nephews, who rebuilt it after the San Francisco earthquake and fire of 1906.

"It was only after Peter Haas and his older brother Walter, who were descendants of a nephew of Levi Strauss, took control of the business after World War II that Levi's became an international brand and, after that, made a mark in fashion as well. Movie idols like Marlon Brando in The Wild One (1953) and James Dean helped popularize Levis. After that, denim blue jeans, by Levi Strauss and dozens of other makers, became not just work clothes but daily garb, and eventually something approaching high style. In 1959, company sales totaled $40 million. ... When it went public in 1971, the company had almost 20,000 employees worldwide and sales of more than $400 million, with operations in 50 countries. It was taken private again in 1985." NY Times obituary for Peter Haas During the 1990s, the firm lost substantial market share, seeing seven years of straight losses from 1997 to 2004 The company has continued to post profits in spite of lower sales.

Historical Financial Information
From 10-K report filed 02/13/2007

Business Strategy
" We have changed virtually every aspect of the business, including the entire process of how we develop, deliver and market products. The initiatives include: As a result of these actions, we have stabilized sales and substantially improved the profitability of the company." 
 * Revamping our core Levi's® and Dockers® product lines to make our products more innovative, market-relevant and appealing to consumers.
 * Improving our speed to market and responsiveness to changing consumer preferences.
 * Launching the Levi Strauss Signature® brand for value-conscious consumers in North America and Asia.
 * Expanding our licensing programs to offer more products that complement our core brand product ranges.
 * Improving the economics of our Levi's® and Dockers® brands for retail customers.
 * Strengthening our management team and attracting top talent to key positions around the world.
 * Enhancing our global sourcing and product innovation capabilities.
 * Reducing our cost of goods and operating expenses.
 * Implementing a new business planning and performance model that clarifies roles, responsibilities and accountabilities and improves our operational effectiveness.

Political and Public Influence
The company describes its involvement in progressive trade liberalization, promoting its responsible sourcing program, and advancing its corporate values on its website.

Corporate Accountability
Coop America Responsible Shopper Profile: "Levi's blue jeans are practically an American household staple, but they aren't actually made in America. Over the last few years, Levi's has closed manufacturing plants and laid off workers in Georgia, California, Texas, Tennessee and Canada. Levi's remaining American employees enjoy excellent diversity policies concerning both ethnicity and sexual orientation. Thankfully, Levi's has also pulled its manufacturing out of Burma over concerns about the country's oppressive regime but elsewhere it hasn't been so conscientious. Levi's avoided a settlement in a class action lawsuit against a Saipan manufacturing plant where thousands of garment workers were subjected to sweatshop conditions. Despite some positive steps towards fair labor practices, the company needs to focus on improving the conditions for all workers in its supply chain."

Labor
"As of November 26, 2006, we employed approximately 10,680 people, approximately 3,630 of whom were located in the United States, 3,540 in Europe, 3,190 in Asia Pacific, and 320 in Canada and Mexico. We added approximately 1,000 employees in 2006. Most of the new employees were associated with our company-operated stores. Approximately 3,870 of our employees were associated with manufacturing of our products and approximately 6,810 were non-production employees. Of the non-production employees, approximately 1,500 worked in distribution. Most of our distribution employees in the United States are covered by various collective bargaining agreements. Outside the United States, most of our production and distribution employees are covered by either industry-sponsored and/or state-sponsored collective bargaining mechanisms. " 10-K Report filed 02/13/2007

Domestic

 * 2003: "In September 2003 Levi announced that it would close the last of its North American manufacturing plants, laying off almost 2,000 workers. The company said it would it would shutter two plants in San Antonio by the end of the year, displacing 800 workers there and marking the end of its U.S. manufacturing operations and would discontinue its Canadian operations in March, ending 1,190 jobs at three plants in Alberta and Ontario. Levi uses about 500 contractors to produce its apparel in 50 countries, including Mexico, China and Bangladesh. Workers' rights activists and labor organizers protested at Levi's San Francisco factory to voice their outrage after the company's decision to close six of the last eight U.S. plants, and cutting 3,600 jobs internationally. The San Francisco plant's 100 workers, who will lose their jobs in June, will receive a lump-sum payment and two weeks' severance for every year of service. Declining revenue and increasing costs are Levi's reasons cited for moving production overseas."

Global
Policy:
 * 1991: company adopts Global Sourcing & Operating Guidelines, claimed to be first ethical code by multinational apparel company
 * 1999: joins Fair Labor Association (FLA)
 * 2002: leaves FLA after the organization strengthens independent monitoring of members. Levi Strauss states the company "has decided to move more quickly ahead with its own external monitoring program, using Verité and Environmental Resource Management as auditors."
 * 2004?: joins Ethical Trading Initiative (ETI)
 * 2005: discloses list of suppliers, following the example of Nike
 * 2006: is suspended from ETI over refusal to adopt living wage provision of ETI base code (required for members). "LS&Co.’s position is that it cannot responsibly commit to clause 5.1 because the business does not believe it can implement it with its suppliers."
 * 2007: resigns from ETI

Campaigns against company:
 * 2000: workers at Thai Iryo Garment in Thailand are denied severance pay after factory closes down. Factory produces for Levi Strauss, as well as Nike, Fila, London Fog, Bacharach, Philips Van Heusen, Timberland, and Adidas among others.  After pressure on the Thai government and clients, company signs agreement with union to pay remaining compensation to 1,236 workers.
 * 2001: Clean Clothes Campaign urges customers (including H&M) to insist of reinstatement of fired union organizers at PT Citra Abadi Sejati in Indonesia
 * 2002: The Thai Labour Campaign requests support in a campaign to help workers at the Thai Bed & Bath factory (producing for such brands as  Nike, Levi Strauss & Co., adidas, and Reebok) get the back pay and severance pay they are owed.  In 2003 workers receive compensation and establish a cooperative to run factory.
 * 2003: Levi Strauss was pressured to intervene with management at the Tarrant factory in Ajalpan, Mexico after workers there were denied legal recognition of their union. Other brands produced at the factory include Tommy Hilfiger, Polo Ralph Lauren, Limited. In spite of Levi's acting on a number of workers' demands, workers were not reinstated.
 * 2004: Demonstrations and a letter-writing campaign were directed at the company to protest the firing of 254 workers at the Codevi factory in Haiti, owned by Grupo M and funded by the International Finance Corporation, where Levi's jeans were produced. Instead of reinstating the workers, some of the production was moved to Grupo M's factories in the Dominican Republic. In April, 2005, the union and management signed an agreement, ending the dispute.
 * 2004: "In January 2004, Levi won the dismissal of a lawsuit over alleged sweatshop abuses on the U.S. commonwealth island of Saipan. The company had been the lone hold-out in a $20 million settlement of a class action lawsuit in 2003 filed against Levi Strauss and 21 other companies. The lawsuit charged that the companies contracted sweatshop labor on Saipan and should be held accountable for worker treatment and conditions in foreign-owned factories operating on U.S. soil. According to the complaint, the more than 13,000 garment workers in Saipan regularly worked 12-hour days, seven days a week, oftentimes "off the clock" without receiving any pay or overtime. Levi was the only company not to agree to the settlement saying it stopped buying garments from Saipan factories in 2000. A company spokeman said, "We felt from the beginning of the litigation that the allegations were simply not true. I think you have to stand behind what you believe in. You can't let people lightly accuse you of allegations that are not true with the expectation that because of the expense and the negative publicity that you're going to get, that you're going to settle."An attorney for the plaintiffs said that plaintiffs' attorneys agreed to the voluntary dismissal of the case against Levi's because the larger battle already was won."
 * 2005: "The Clean Clothes Campaign highlighted a series of worker rights violations in global garment supplier Paxar Corporation’s Turkish factory. The Turkish factory and Paxar Corporation have repeatedly tried to destroy trade union activity: In early 2005, Paxar fired 11 workers shortly after the union successfully organized the factory and opened negotiations with Paxar. According to the Turkish High Court of Appeal’s decisions, these firings were illegal, and Paxar was ordered to reinstate all 11 workers. The company has yet to take action as per the High Court’s instructions. In late 2005, the Turkish factory dismissed at least 4 trade union members. Ayce Bagbakar, who joined the trade union in March 2006, was fired in April 2006. The Clean Clothes Campaign states that these cases, which are still underway, “represent clear-cut unfair dismissals.” In August 2006, Textile, Knitting and Clothing Industry Workers' Union of Turkey (TEKSIF) unsuccessfully negotiated with Paxar on issues such as wage and bonus payments. The Clean Clothes Campaign asks consumers to pressure brands that buy from the Turkish factory to express their disapproval over these labor violations. Turkish factory’s clients include Gap Inc., Levi Strauss, Wal-Mart, Disney, Adidas, Puma, and Nike. "
 * 2006: "The National Labor Committee (NLC) noted that while Levi Strauss supplier Goldenwear factory had its shortcomings, it was performing better than the other factories in its industrial park in Jordan. The NLC’s September 2006 update on Jordanian factories reported signs of progress at Goldenwear. In early September, workers went on strike and won a regular 8 hour workday. According to the NLC, “In the past, this would have been unheard of and such a strike would have been met with retaliatory firings and deportation.” Even with such improvements Goldenwear factory labor policies and practices still have a long way to go. Management only returned confiscated passports to 70 percent of its workers."
 * 2006: "For more than a year, the Coalition for Justice in the Maquiladoras (CJM), in partnership with other labor advocates such as Sweatshop Watch, Global Exchange, Cross Border Network, Transnational Information Exchange launched a campaign calling on Levi Strauss to "live up to its claims of corporate citizenship." Workers at Lajat's Gomez Palacio garment factory in Mexico were subject to labor violations including no overtime pay, exposure to dangerous chemicals, dirty bathrooms, blocked exits, and denial of their right to organize. Lajat illegally closed the factory after workers successfully formed a workers union in February of 2006. Following public pressure on Levi Strauss in April 2006, a deal was made between the workers and Lajat. Workers won 100 percent of everything Lajat owed them including wages, overtime, severance pay, and contributions to government benefits. Lajat paid roughly US$374,000 and dropped all charges against the workers. The workers did not receive a reinstatement to organize; however, the union remains in tact."

Major reports: [http://en.maquilasolidarity.org/en/issues/ca/transparency/TRC/2006 Maquila Solidarity Network. 2006. Transparency Report Card]

Environment
Included environmental provisions in Global Sourcing Guidelines since 1991. Implemented Global Effluent Guidelines and restricted substance list for all suppliers since 1995. 

Social Responsibility Initiatives

 * Community Involvement Teams: offer employees and retirees funds and time to work in their communities "by mentoring students, fundraising, supporting environment programs, teaching HIV/AIDS prevention and working with seniors among other volunteer activities."
 * Levi Strauss Foundation: funds women, youth, and anti-poverty programs

Business Scope
Lines of Business and Major Products Paragraph Units/Subsidiaries

Competitors are Gap Inc., Tommy Hilfiger, and VF Corporation.

Suppliers
Levi Strauss & Co. supplier list

Financial Information (as of DATE)
Ticker Symbol: Main Exchanges: Investor Website: http://www.levistrauss.com/Financials/

List of largest shareholders
Members of the Haas family, related to the company's founder, own Levi Strauss & Co.

Largest Shareholders

Levi Strauss & Co. is divided into three divisions: Levi Strauss Americas (based in San Franscisco); Levi Strauss Europe (based in Brussels); Asia Pacific Division (based in Singapore). The company has country offices throughout these regions.

Governance
Executives:
 * R. John Anderson, president & CEO
 * Hans Ploos van Amstel, CFO
 * Alan Hed, president Asia Pacific Division
 * John Goodman, president U.S. Dockers Brand
 * Robert Hanson (Levi), president Levi Strauss Americas
 * Hilary K. Krane, senior VP & general counsel
 * David Love, senior VP global sourcing
 * Larry Ruff, global marketing officer, senior VP strategy & worldwide marketing
 * Armin Broger, president Levi Strauss Europe
 * David Bergen, senior VP & chief information officer
 * Cathy Unruh, senior VP global human resources

Board members:
 * Angela Glover Blackwell
 * Robert E. Friedman
 * James C. Gaither
 * Peter Georgescu
 * Miriam L. Haas
 * Peter E. Hass, Jr.
 * Robert D. Haas, Chairman
 * Walter J. Haas
 * F. Warren Hellman
 * Patricia A. House
 * Leon J. Level
 * Patricia Salas Pineda
 * T. Gary Robers

Executive/director pay: Full 2006 Executive Compensation Table Full 2006 Board Member Compensation Table
 * Philip A. Marineau, CEO (until November 2006): USD 3,338,400 salary & bonus
 * R. John Anderson, executive VP, COO, president Levi Strauss Asia Pacific (present CEO): USD 1,493,950 salary & bonus *Robert D. Haas, chairman: USD 287,766

Contact Information
155 Battery Street San Francisco, CA 94111 U.S.A. Phone: 415-501-6000 Fax: 415-501-7112 Web: http://levistrauss.com

Books on the Company
Downey, Lynn. 2007. Images of America: Levi Strauss & Co. Arcadia Publishing. Schoenberger, Karl. 2001. Levi's children: Coming to terms with Human Rights in the Global Marketplace.Grove Press.

Related SourceWatch Articles

 * Business for Social Responsiblity
 * Rhoda H. Goldman
 * Richard Kauffman

External Resources

 * Levi Strauss Co-op America, accessed February 2008.