Gap’s (GPS) PR Problem

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One of Gap’s (GPS) factories in India is employing children as young as 10 years-old.

According to MarketWatch, "In a statement released later Sunday, Gap said it was only informed of the sweatshop earlier this week, and "immediately launched" an investigation."

What is troubling, of course, is that Gap was not aware of the problem itself. The company made another statement to try to blunt the impact of the news: "We have called an urgent meeting with our suppliers in the region to reinforce our policies."

The problem is not unlike the China lead-painted toy issue and the damage that it did to Mattel (MAT). US companies are willing to turn to companies like India and China for cheap labor, but they are not willing to spend the money and resources to protect the workers in these venues or, in some cases, their own customers.

As more and more US firms come under the harsh spotlight that will be placed on their overseas manufacturing practices, the realization of these problems, and the backlash, is almost certain to grow.

Douglas A. McIntyre