National Labor Committee China Labor Watch

NATIONAL LABOR
COMMITTEE
CHINA LABOR WATCH
CHINA
NYC
FACING AN OLYMPIAN
STRUGGLE TO SURVIVE
PUMAS WORKERS IN CHINA

August 2004

FACING AN OLYMPIAN STRUGGLE TO SURVIVE
Enduring Grueling Hours, Pitifully Low Wages, Exploitation,

Abuse and Denial of their Rights
A Joint Report of
The National Labor Committee and China Labor Watch
National Labor Committee China Labor Watch

540 West 48th Street, 3rd Floor PO Box 4134
New York, NY 10036 New York, NY 10163
Phone: 212-242-3002 Phone: 917-257-8589
www.nlcnet.org www.chinalaborwatch.org
Workers Entering Pou Yuen Plant "F"
Pou Yuen Shoe Factory, China

Introduction
By Charles Kernaghan
Director, National Labor Committee
Puma sponsors Olympic teams and star athletes around the world. But it is unlikely that even
these finely conditioned athletes could keep pace with Pumas workers in China, forced to work
up to 16 hours a day, from 7:30 a.m. to midnight, six or seven days a week, for wages of just
31 cents an hour. How many athletes could endure the constant production line speed-ups, the
relentless numbing repetitive motions, being yelled and screamed at, humiliated, only to return
home exhausted to a crowded dorm room shared by 12 workers, without hot water and forced to
eat food resembling pig slop. How many athletes could stand to be stripped of their most basic
rights, knowing that if they ever dared to speak the truth, they would be fired immediately. Yet
Puma workers in China endure just this, day in and day out, year after year.
In a very direct sense, these workers in China are toiling for the Puma Corporation, for the
athletes Puma sponsors, and for usfor the consumers who purchase their products.
In fact, the workers in China are carrying Puma on their backs. Puma is making a net profit of
$12.24 per hour on each worker in China making their sneakers. Annually, Puma is reaping a
profit of $38,189 on each worker. In a single factory, Pumas profit from the workers can reach
over $92 million a year. It is the workers in China who are actually paying all of Pumas bills,
including the $206 million a year Puma spends on advertising. Puma spends $6.78 to advertise a
$70 pair of sneakersalmost six times the $1.16 that they pay the workers to make those
sneakers.
Pumas Code of Conduct and their Perspective Sustainability Report reads well. Puma even
quotes Lao-tzu, a 6th Century B.C. Chinese philosopher, and the great Russian novelist Fyodor
Dostoyevsky. However, Puma should worry less about the sustainability of its rhetoric and more
about the real lives of the people who make their products. There is a great disconnect between
what Puma says and what Puma does.
A major part of this disconnect is that we never hear from the workers. In the United States, the
American people purchase two billion pairs of shoes made in China each year, which amounts to
seven pairs of shoes for every man, woman and child in the country. But we have never heard
from any of these workers, not even once. Advertising is, of course, meant to brand us. But now
it is time to also hear from the workers who make the products we purchase.
Puma is certainly not the worst company. Far from it. Puma is pretty much like the rest, if not
even a little better.
So what should Puma do? Certainly the workers are not asking Puma to pull out of Pou Yuen
Plant F. On the contrary, they desperately need those jobs, or they would not put up with the
abuse and repression. It is better to be exploited than to have no job at all. The Puma workers in
China do not want a boycott, but they do want to be treated like human beings.
Nor is anyone saying that Puma should not make a profit. The real question is: why cant
healthy profits co-exist with sustainable wages? A worker in China makes enough Puma
sneakers in the first five days and two hours of workbefore the first week of the year is over
to pay his or her entire years wages. Suppose Puma did something utterly remarkable and said
that the company would increase the base wage of its Chinese workers by just 20 cents an hour.
This would increase the workers wages by 46 percent, allowing them to climb out of misery
and at least into poverty.
This 20-cent-an-hour increase would have an enormous positive impact on the lives of the
workers. If Puma did this, it would now take the workers seven and a half days to make enough
sneakers to pay their salaries for the year. In other words: It is very do-able, especially given
that Pumas gross profit on every pair of $70 sneakers is $34.09!
If the workers wages were raised by 20 cents an hour, it would add 54 cents to the cost of the
sneakers. If Puma could not handle this alone, suppose concerned citizens offered to split the
difference. We could pay 27 cents more, and so would Puma.
No matter how nice corporate Codes of Conduct and company monitoring reports sound, if a
worker is earning below subsistence-level wages, the factory is still a sweatshop. And, Freedom
of Association is either respected, or it is not. The Puma workers in China definitely do not have
the right to Freedom of Association or to organize.
Puma should seriously address these human rights issues: the right to earn at least subsistence
level wages, freedom of association, and the right to organizebut should do so in reality, with
concrete actions and not just words.
The National Labor Committee, China Labor Watch and many other human rights organizations
are ready to meet with Puma on these issues anytime, anywhere.
Ultimately though, if the Puma workers and others across the developing world are to win
respect for their human and worker rights and fair wages, much will depend upon the
engagement, awareness and demands of consumers in the U.S. and elsewhere in the developed
world. Only when this happens will a brake be put on the race to the bottom in the global
sweatshop economy.
August 2004

FACING AN OLYMPIAN STRUGGLE TO SURVIVE
Enduring Grueling Hours, Pitifully Low Wages, Exploitation,

Abuse and Denial of their Rights
A Joint Report by the National Labor Committee and China Labor Watch
___________________________________________________
Pou Yuen Plant F

De Yong District
Gaobu Town
Dongguan, China
Taiwanese-owned, by the PouChen Group
Pou Yuen Plant F is just one shoe factory among at least seven others that together employ some
30,000 workers in a large industrial park owned by the PouChen Group.
The vast majority of Plant Fs production is for PUMA, which has increased its production
throughout 2003 and 2004. Currently, Plant F has approximately 3,000 employees, with over
2,400 workers involved in direct and indirect production. The rest are management employees.
The median age of the workers is 20 to 22 years. It is rare to see a worker over 40.
The research in this report focuses primarily on Pou Yuen Plant F. However, conditions in Pou
Yuen Plant D, which has 2,700 workers producing sneakers for PUMA and And1, are extremely
similar if not exactly the same.
Executive Summary:
Abusive Working Conditions at Pou Yuen, producing for PUMA in China
Forced Overtime:
Mandatory 13 to 16 hour daily shifts, from 7:30 a.m. to 9:00 p.m., 11:00 p.m. or midnight.
Workers receive one, three, or four days off a month. Depending upon production demands,
workers are at the factory 76 to 100 hours a week.
Workers receive just 10 holidays off a year.

The grueling hours are exhausting and workers try to nap during their lunch and supper
breaks. On the rare holidays, most workers remain in the dorm to sleep.
Below-subsistence wages:
Base wage is just 31 cents an hour, $2.48 a day, and $12.56 a week.
Even including all overtime and production bonuses, the average take-home wage is still just
35 cents an hour and $20.93 for a 60-hour workweek.
Workers are routinely cheated of the legal overtime wage due them. Sometimes management
withholds up to 20 percent of the workers wages as punishment for failing to meet production
goals.
PUMA thrives on its exploited and abused workers in China:

From beginning to end, the total cost of labor to make a pair of PUMA sneakers in China
comes to just $1.16. The workers wages amount to just 1.66 percent of the sneakers $70 retail
price. It takes 2.69 hours to make a pair of sneakers.
PUMAs gross profit on a pair of $70 sneakers is $34.09.
PUMAs hourly profit on each pair of sneakers is more than 28 times greater than the wages
the workers received to make the sneaker.
PUMA is making a net profit of $12.24 an hour on every production worker in China, which
comes to an annual profit of $38,188.80 per worker. For Pou Yuen Plant F alone, PUMAs net
profit gained from the workers exceeds $92 million.
Even after accounting for all corporate expenditures involved in running its businesswhich
the workers in China are ultimately paying forPUMAs net profit on each $70 pair of sneakers
is still $7.42, or 6.4 times more than the workers are paid to make the sneaker.
In the first five days and two hours of the yearbefore the first week is even overthe
workers in China have made enough PUMA sneakers to pay their entire years salary.
If PUMA did something quite remarkable, but very affordable, and raised the base wage of
the workers by just 20 cents an hour, which would allow the workers to climb out of misery and
would have an enormously positive impact on their lives, it would then take a worker in China
7 days to make enough sneakers to pay for their entire years salary. This is very do-able.
Repression, Fear and Abuse:

Workers describe factory management as militaristic. Workers report that after forced
calisthenics, they march to their positions chanting company slogans.
Twelve workers share a crowded dorm room, and 100 workers share each bathroom. Even
during the cold winter months the dorm often lacks hot water.
Workers eat food described as pig slop. The meat is unsafe and sickeningly greasy.
Anyone daring to speak the truth will be fired. Anyone talking back to a supervisor will be
fired. Anyone even suggesting improvements in factory conditions will be fired. The workers
are in a trap, stripped of their rights.
Supervisors routinely shout and yell at the workers for working too slowly. The workers have
no choice but to bow their heads and accept the constant humiliation in silence.
Talking is prohibited.
No one can leave the factory without first receiving permission and a special pass.
Company security guards search the workers dorm rooms, and anyone found with contraband
goods, such as cigarettes, will be immediately fired.
Anyone arriving five minutes late to work will be fined three hours wages.
Workers handle toxic chemicals that can cause skin and eye irritation, headache, dizziness,
vomiting, breathing difficulties, drowsiness, and with prolonged exposure, nervous breakdown.
The hands of workers on the stock-fitting line gradually change shape over time due to the
repetitive, rapid and precise movements they must make day in and day out. The workers
thumbs are thin at the base and thick at the top, with prominent nails. Thin veins stand out.
Their hands are blistered and sore, causing the workers difficulties sleeping.
PUMAs Code of Conduct is meaningless. Pou Yuen functions as a well-run prison, one
that manufactures massive profits for PUMA, on the backs of its exploited and abused
workers.
We asked a worker to describe his day. This is what he wrote:

A Day in My Life
Below I will write in a continuous style to show what my day is like.
Workers are held under very militaristic management. At 6:30 in the morning, very sleepy workers
must get up, they clean their shoes, they have 10 minutes to wash their faces and get dressed.
Tides of people flow into the cafeteria, everyone tries to be the first. Everyone is upset by the poor
quality of the food. Because people try to cut in line, there are often arguments with the cafeteria
managers, often during the normal process people are often written up for little things, each of
these little infractions is 30 rmb. People use cafeteria tickets, however they just get one ticket with
which they can only buy 2 twisted bread sticks or 2 steamed buns, many workers are still hungry
and use invalid tickets to buy breakfast. Workers who are discovered by the cafeteria managers
have their lunch box thrown away. With this type of emotion, only after you see it and experience it
can you truly understand how unbearable this is. After 7 am workers rush to punch their cards
because tardiness results in a deduction in wages. After 7 am, the workers line up behind the
section foreman, each line slowly moves forward while the workers ceaselessly recite that they will
diligently and faithfully provide service. If it is too quiet, everyone is punished equally after it ends.
All physical exercises must be done according to the regulations. After entering the workshop, you
will notice all the workers working with a high degree of physical effort and under very stressful,
energy demanding conditions. Any little error will bring the supervisors reprimand. The sound of
their scolding is louder than the machines. Because the line supervisors are always scolding, their
voices change to sound like birds screeching. This is true.
Workers must take this without resistance, anyone implicated in resistance must leave the factory.
These workers all come here from remote villages. They come here to earn money, inside their
heart they shed tears. Silently they endure scolding, and continue working.
On the shaping line, you can see workers gluing soles. You can tell by their hands how long they
have been working here. Change in shape is very pronounced. It makes people who see it
frightened. These workers just glue soles, they dont have any other skills. When the factory is
busy, besides eating all they do is work. They have no time to learn other skills, like other jobs on
the assembly line. What I regret, a boy in his 20s begins to look like hes in his 30s, becomes numb.
Through this, he just hopes the factory doesnt dismiss him. He will work for his whole life, he has
no choice.
In the morning the stars are still in the sky when they must go to the factory to work, the sky turns
dark, and it is only after the stars come back out that the workers are allowed to quit working.
We work from 7:00 in the morning until 11 at night. Under our conditions, it appears that over half
the workers are starving. After stopping work they go to the cafeteria. They serve 4 dishes (one
soup, meat and vegetables). The meat is just a meat broth. I have a friend who works in a poultry
shop, she kills the chickens and delivers them to the cafeteria. She says these chickens were
cleaned very sloppily and it appears that these chickens were also sick. It is this type of meat that is
given to the workers to eat, the workers have no choice because they have to go back to work in the
afternoon.
PUMA orders have increased, workers only get half an hour to eat dinner and then must start
working again.
The Taiwanese investigate whether our work stations are cleaned, and if everything isnt clean and
it is discovered by the company, the worker is cross-examined. Company security guards will go
through the workers clothes and look through their pockets, taking cigarettes. If they are found
the worker will be dismissed. There was one Taiwanese person who remained to attend a meeting,
during the meeting, he saw a worker spit on the floor, he intimidated the workers because if the
worker was discovered he would be fired.
In terms of living, many workers dont have hot water in the winter, especially during new year.
The company absolutely does not provide hot water, this situation continues without stop.
Hours: Forced Overtime
Routine 13 -to-16 -hour shifts from 7:30 to 9:00 p.m. to 11:00 p.m. or midnight;
Workers receive one, three, or four days off a month;
Depending upon production demands, workers are at the factory for between 76 and 100
hours each week;
Workers time cards are punched out at 8:00 p.m. or 9:00 p.m. at the latest, despite the fact
that they are kept working to 11:00 p.m. or 12:00 midnight;
Besides the sporadic Sundays off, workers receive just ten holidays off in a full year.
The legal workweek in China is 40 hours, with eight-hour shifts Monday through Friday, with
Saturday and Sunday off. By law, all overtime is supposed to be voluntary and is not to exceed
three hours a day, nine hours a week or 36 hours a month (Labor Code, Article 41).
However, at the moment the obligatory shift at Pou Yuen Plants F and D stretches from 7:30
a.m. to 11:00 p.m. or midnight. Newer workers appear to get just one day off a month, while
more experienced workers receive three or four Sundays off each month. During the peak
season, which stretches from May through December, everyone is required to work the last
Sunday of the month if production deadlines demand it. All overtime work is strictly mandatory.
The routine daily shift stretches 15 to 16 hours Monday through Friday, with a minimum
nine-hour shift required on Saturday. Under this schedule, workers are at the factory 86 to 91
hours, while being paid for 73 to 78 hours.
We say paid because workers report being routinely cheated of the overtime pay legally due
them. First, their time cards are punched out every night at 8:00 p.m., and never later than 9:00
p.m., despite the fact that they will be kept working until 11:00 p.m. or midnight. Pou Yuen does
this so their records will indicate they are complying with Chinas labor laws, which prohibit
more than three hours of overtime a day. Also, Pou Yuen simply punishes the workers by
arbitrarily cutting wages. For example, management recently informed the workers that they
will receive only 80 percent of their June salary because they failed to meet that months
production goals. Manipulating the workers time cards is meant to satisfy PUMAs and And1s
gullible monitors. However, this is a very shallow pretense, since PUMA, because of its huge
production in Plant F, often has company representatives on the ground, stationed full-time at the
plant. Surely PUMA knows exactly what is going on. We will return to this later.
The routine daily shift would be as follows:
7:30 a.m. 11:30 a.m. (Work / 4 hours)

11:30 a.m. 12:30 p.m. (Lunch / 1 hour)
12:30 p.m. 4:30 p.m. (Work / 4 hours)
4:30 p.m. 6:00 p.m. (Supper / 1 hours)
6:00 p.m. 11:00 p.m. or 12 midnight (Overtime / 5 or 6 hours)
Under this schedule, the workers are at the plant 15 to 16 hours a day, while working 13 to
14 hours. If they are lucky, on Saturday the workers are kept from 7:30 a.m. to just 4:30 p.m.,
putting in only a nine-hour shift, while working eight. Currently, the workers are at the factory
86 to 91 hours a week, while actually working an exhausting 73 to 78 hours.
On the final week of each month, when production demands require it, Sunday work is also
mandatory. In this case, the workers will be at the factory anywhere from 95 to 100 hours a
week, working 81 to 86 hours.
However, it can get even worse. When it is really busy, the workers report that they may be
required to skip half of their lunch hour and supper break in order to race back to work. This can
add another hour to their workday.
When production slows down, the Pou Yuen factory operates on a 13 hour schedule,
Monday through Friday from 7:30 a.m. to 9:00 p.m., with Saturday shifts remaining the same,
from 7:30 a.m. to 4:30 p.m. Under this lighter schedule, the workers are at the factory 76
hours and working 63 hours a week. The slow season is typically from January through April.
In addition to the occasional Sunday off, the Pou Yuen workers receive just 10 holiday vacation
days off in the entire year:
New Years: one day off;

May 1 (Labor Day): three days off;
National Day: three days off;
Spring Festival: three days off;
Since the majority of the workers are migrants from the countryside, one of their major
complaints is that most of them have not been able to travel home to see their families for the last
three, four or even up to seven years. They simply do not have enough time off to make the trip.
Many would not have enough money either, since their wages are very low and the holidays are
the most expensive time of the year to travel.
The PUMA Workers are Exhausted

The hours are grueling, the days off few, the pace of work relentless and the speed-ups constant.
It is not surprising then, that the PUMA workers live in a state of exhaustion. Workers race to
catch a nap during their lunch and supper periods, and on their rare days off about two-thirds of
the workers do not leave their dorms, using their precious day off to sleep.
To get an idea of just how grueling and exhausting these workers schedules are, consider that
they are receiving, at most, 57 days off in the entire yearthree or four days off a month and ten
national holidays (assuming that the workers are required to work just five Sundays a year,
which would be a very low estimate). This means that they are working 308 days a year, and a
minimum of 2,464 hours (assuming an eight-hour day), but more likely, assuming 11-hour days,
some 3,388 hours a year.
Lets do a comparison with Germany, where PUMA is headquartered:
PUMA Workers in China German Workers

- Work 6.67 days a week - Work 5 days a week
8 to 11 hours a day 7.7 hours a day
(63.4 hours per week, average) (38.5 hours a week)
- No annual vacation - 30 days vacation
- 10 national holidays - 13 paid holidays
- 57 days off per year - 147 days off a year
- Work 2,464 - 3,388 hours per year - Work 1,557 hours per year
PUMA workers in China are actually being forced to work up to 2.2 times more hours a year
than their counterparts in Germany.
Mandatory Exercise and Marching to Work Shouting Company

Slogans
As if their workday were not long enough, many workers report having to jump up at 6:30 a.m.
to be at the factory for a group meeting from 6:50 to 7:00 a.m. followed by a half hour of
mandatory calisthenics. All the workers describe the Taiwanese management as very
militaristic. The workers have to do their exercises together according to strict regulations.
Afterward, the workers line up behind their section foreman and march to work shouting again
and again that they will work diligently and faithfully to provide good service, and so on. If they
do not recite these company slogans loudly enough and in unison, they will be punished. When
they arrive at their workstations, the production line is already in motion, and the grueling pace
begins with constant pressure to work faster.
Some workers report that the exercises are being cut back, but one can still hear the company
chants loud and strong, especially coming from the inspection department.
Wages:
Below subsistence levels
Base wage is just $0.31 an hour, $2.48 a day, and $12.56 a week
Even including all overtime and production bonuses, the average take-home wage is
still just $0.35 an hour and $20.93 for a 60-hour workweek.
The base wage at Pou Yuen Plants F and D is 450 RMB per month or $54.41, which meets the
legal minimum wage in Dongguan City. There are 8.27 RMB to one U.S. dollar.
PUMA/Pou Yuen Base Wage

(450 RMB per month)
$0.31 an hour
$2.48 a day (8 hours)
$12.56 a week (40 hours)
$54.41 a month
$652.96 a year
However, the workers lose over 40 percent of their base wages due to deductions by
management to cover dorm, food, and other expenses. We will return to this later, but 12
workers must share a primitive room in the company dorm, and the food is basically inedible. At
a minimum, the company deducts 135 RMB a month ($16.32) for dorm expenses and 45 RMB
($5.44) a month for food. Even just these two deductions result in lowering the workers take-
home wage to 19 cents an hour, and $7.53 for the entire week. A review of Pou Yuen pay stubs
also shows a monthly deduction of 15 RMB ($1.81) for health insurance and another 16 RMB
for miscellaneous expenses. These deductions would further lower the workers take-home
wage. The health insurance allows the worker to consult only with the factory doctor and does
not cover medications.
Such below-subsistence level wages are, of course, very useful for management as a tool to prod
its employees both to work faster and to work longer hours in order to earn additional production
bonuses and overtime premiums. However, having said that, the workers have little real choice.
All overtime work is strictly mandatory and anyone failing to meet the production goal will first
be punished, and then fired.
The workers report that with their production bonus, contingent upon reaching their goal or
quota, they can earn a regular wage of 500 to 550 RMB, or $60.46 to $66.51 a month.
Regular Wage with Production Bonus

500 RMB per month 550 RMB per month
$0.35 per hour $0.38 per hour

$2.80 a day (8 hours) $3.04 a day (8 hours)
$13.95 a week (40 hours) $15.35 a week (40 hours)
$60.46 a month $66.51 a month
$725.51 a year $798.07 a year
However, after deductions for room and board, the average regular take-home wage, including
the production bonus, is still just 24 cents an hour.
Average Regular Take-Home Wage

including Production Bonus
(525 RMB - 180 RMB deductions = 345 RMB)
$0.24 an hour
$9.63 a week (40 hours)
$41.72 a month
$500.60 a year
The workers report that with overtime, for example working until 9:00 p.m. every night, they can
take home between 700 to 800 RMB a month, or $84.64 to $96.74, after deductions.
Their work schedule would be as follows:

7:30 a.m. to 11:30 a.m. (4 hours work)
11:30 a.m. to 12:30 p.m. (1 hour lunch)
12:30 p.m. to 4:30 p.m. (4 hours work)
4:30 p.m. to 6:00 p.m. (1 hours supper)
6:00 p.m. to 9:00 p.m. (3 hours OT)
This would put the worker at the factory 13 hours a day, Monday through Thursday, while
being paid for 11 hours. With real luck, the workers would only have to put in nine-hour shifts
on Friday and Saturday, working from 7:30 a.m. to 4:30 p.m., while being paid for eight hours.
At a minimum then they would be at the factory 72 hours a week, while being paid for 60 hours.
So, even including the production bonus and 12 hours of mandatory overtime, the average take-
home wage at the Pou Yuen factory is still just 35 cents an hour and $20.93 a week.
Average PUMA/Pou Yuen Take-Home Wage
(including the base wage, production incentive and all overtime premium)
(750 RMB per month)
$0.35 an hour
$20.93 a week (6 days, 60 hours)
$90.69 a month
$1,088.27 a year
As low as this take-home wage appears, this is really a very liberal estimate, given that it is very
likely that the workers were kept working more than 60 hours a week, which would, of course,
lower the actual hourly rate even more.
Further, as was pointed out earlier, it is common for the workers to be required to punch their
time cards out at 8:00 or 9:00 p.m., despite the fact that they will actually be kept working until
11:00 or midnight. Also, as management is currently doing this month, up to 20 percent of the
wages legally owed the workers may be withheld as a form of punishment for failing to reach
their excessive production goals. Routine cheating on legal overtime wages may result in real
average take-home wages considerably lower than the 35-cent-an-hour figure we are using.
The workers also complain that the factory withholds at least 20 days back wages owed them.
For example, a new worker starting in June will receive just 10 days wages when she is paid in
July. This is another tool the company uses to discipline the workers, for if a worker decides to
quit or is fired, she will have to leave without the 20 days wages owed them.
Another common complaint is that along with the scarcity of holidays off, the salary the workers
earn is too little to allow them to travel back to their home villages to visit with their families.
Some workers have not been home in three, four, or even seven years. It is not difficult to
understand their pain and anguish.
The workers report spending anywhere from one to two thirds of their pay on food and some
form of distraction or entertainment outside of working hours. First, the food in the company
cafeteria is inedible, and secondly, this is the one avenue the workers have to try to deal with the
relentless stress they face on the job each day.
Pou Yuen Shoe Factory, China
An Eyewitness Account
One of our researchers described conditions faced by the PUMA workers in these words:
In a series of sharp calls, the workers are roughly woken from their dreams at 6:30
a.m. After they wash and dress they must quickly run to the factory and line up. Each
workers face shows their apathy. They cant say how many years it has been that they
have had these problems. They have already adapted to this lifestyle. They will bow
their heads and silently accept reprimands, even to the extent that their character is
insulted. They all consider the money they are earning, and so ignore the criticism. The
morning meeting is finished around 7:00 a.m.
The workers directly enter the workshop where the supervisors have already started the
assembly line process and in that short, five-minute period, the pressure to work fast has
already started.
Eighty percent of the workers on the shaping lines stand while working. In their eyes, it
gives them more energy. Workers who perform poorly are scolded. If they do not finish
within the allotted time, they are also reprimanded and blamed, to the extent that they
may be fined. As you can judge from this situation, any direct impressions on visitors is
serious and recorded.
Their hands never stop moving, for many years every day is the same process, the same
thing. Their hands early on change shape. Every movement they make must be perfectly
standard and this environment to a high degree contributes to the changes in shape.
Before the lunch period arrives, the workers stomachs are rumbling. They enter the
cafeteria in groups of 20 and eat food that looks like pig slop. They have no choice.
They must eat because in the afternoon they have to go back to work. In their short
lunch break, they will also sleep. It is very valuable. All the workers want to sleep.
Every time a holiday arrives, two thirds of the workers will go to the dormitories to
sleep. In the afternoon they work continuously.
Salaries are extremely low. But workers who want to leave dont have enough money to
go and must continue numbly working here. For example, Mr. W has worked in the
factory for seven years. He says he has no other choice, because he has to feed his
family, and where else can he go to work? Without any other options, he can stand being
scolded. He says he will return to work five more years. This is one plan. However,
after five years, he doesnt know what he will do. This small amount of speech describes
many workers thoughts.
From very early until late, they are pressured to work quickly. Without overtime pay,
they work until 9:00 p.m. With overtime pay, they work until 10:00 or 11:00 p.m. or to
midnight. If there are visitors, the workers wait until after they leave to start working
overtime.
According to the factory fine system, rejected work past the allowed limit is recorded as
an offense. If a worker gets in an argument with the discipline department, they will also
be punished. Supervisors do not hear out workers explanations and do not reason with
workers. If workers have three offenses or one big offense, they will be fired without pay.
During the slack season, supervisors put out even more stringent demands, reprimanding
workers whose work is not good enough, decreasing their salaries and finally firing
them.
When foreign businessmen come to investigate, first the workers will receive a notice.
They make the workers clean and sanitize, mopping the floor. The supervisors are very
strict and picky.
The labor union [All China Trade Union Federation] organizes a few activities, but they
dont really address the workers plight. Workers do not place much hope in the union.
In 2003, there was a strike which was organized by the workers. It is very rare that the
factory enforces the labor laws.
Late at night, when little spots creep up into their vision, the workers finally get to leave
the factory. Exhausted, they return to the dormitories.
Working Conditions at PUMA/Pou Yuen: Repression, Fear and

Abuse. Workers describe management as militaristic.
Factory Rules are Excessively Harsh.
Anyone arriving even five minutes late to their work stations will be given a warning the first
time and fined 5 RMB (60 cents) the second time. Sixty cents might not sound like a lot of
money, but for the PUMA workers it actually amounts to the loss of more than three hours
base take-home wage.
Talking in the factory during working hours is strictly prohibited. Talking back to a
supervisor is not tolerated, and any worker attempting to do so will be punished, even if the
worker is simply trying to explain something. No such discussions are allowed.
Workers spending too much time in the bathroom will be interrogated and chastised.
No one can leave the factory during working hours without permission and a special pass.
Rejected work is recorded. After three offenses, a worker can be fired without receiving
their back pay.
Supervisors routinely scream and yell at the workers, scolding them for working too slowly,
or for any perceived mistakes. Workers have no choice but to bow their heads and silently
take the abuse. To act otherwise will result in immediate firing.
From the moment the assembly line is switched on, the workers report facing constant
pressure to work faster and harder. The pace is relentless.
Company security guards search the dorm rooms while the workers are at the factory, going
through their clothing and other possessions. Anyone discovered to have contraband items,
such as cigarettes, will be fired.
Workers are afraid and feel they are in a trap. In private, workers discuss factory conditions
and what needs to be improved, but no worker feels that she could ever speak the truth
publicly without being fired.
Dangerous Chemicals
Among the chemicals the workers handle are at least two toxic primers. One is IIIPD, which
contains methyl ethyl ketone, dimethyl sulfoxide and resin. The other, a primer used on
synthetic leather and mesh, is IIIYNN, which contains methyl ethyl ketone, acetone and
tetrahydrofuran.
Both chemicals can cause eye and skin irritations, headaches, dizziness, vomiting,
drowsiness, and breathing difficulties. Chronic effects in case of unsafe levels of exposure
include nervous breakdown.
There is no specific antidote for chronic unsafe exposure, and physicians are advised to treat
symptomatically and supportively.
Primitive Dorm Conditions
Workers describe their dorm rooms as primitive, lacking even electrical outlets, furnished
solely with their beds. Twelve workers share each room. There are just four bathrooms for
400 workers. Often the dorms lack hot water, even during the winter months.
Cafeteria Food Resembles Pig Slop.
Workers describe the cafeteria food as pig slop. Eight workers share a table, and four
dishes are served. However, no one dares eat the meat dishes because the meat is of very
poor quality and extremely greasy. Most workers choose to go out to eat, despite the fact
that 45 RMB is automatically deducted from their wages each month for the cafeteria food.
According to the workers, many of the Pou Yuen employees look half fed.
Misshapen Hands
The workers say that you can tell how long someone has been working on the shaping line by
just looking at their hands, which change shape to meet the work. There are about 170
workers who do stock fitting, gluing the soles of the sneakers. Every movement they make
must be perfectly standard. Hour after hour, day in and day out, year after year, they perform
the exact same motions. Over time, their hands gradually and subtly change shape. These
workers thumbs are thin at the base and thick and swollen at the top, with prominent nails.
Extremely noticeable blue veins also stand out. Their hands are very callused. They are sore
with open blisters and unhealed wounds. These workers have trouble sleeping because of the
pain.
One worker described the change in the hands shape as very pronounced. Also, it
makes people who see it frightened.
Workers live in fear and repression.

Every worker feels that if they ever spoke the truth openly about factory conditions, they
would be fired. If they demanded improvement, they would be fired. In fact, for daring to
even make suggestions, they may be terminated. So the workers live in fear, resigned to the
abuse, and trapped. If they are to keep their jobs, which they desperately need, they must
bow their heads in silence and accept conditions as they are.
There is a union at the factory, but the union is the All China Trade Union Federation,
which everyoneeven PUMAknows is controlled by the government and functions more
to promote foreign investment and protect companies than to address the real needs of the
workers. Not surprisingly, the workers do not place much hope in the union. When there
was a wildcat strike in 2003, it was organized by the workers, not the union.
In fact, the union is so meaningless that Pou Yuen management has set up a committee,
controlled by themselves, to address human rights concerns and any issues arising from daily
life at the factory. Of course the workers have no trust in such a management committee.
After one worker tried to commit suicidein despair over her conditionsrather than trying
to assist her, the company fired the worker.
It is unclear, but it appears that new workers entering the Pou Yuen factory must pay a 100
RMB ($12.09) fee, or a weeks wages, to a labor office which may very well be the All
China Trade Union Federation.
PUMAs Code of Conduct looks and sounds good, but is completely meaningless.
Factory monitoring visits are known in advance, and the plant is cleaned and prepared. As
has been pointed out a number of times, every single worker knows that if they dared speak
the truth, they would be immediately fired and sent packing without so much as their back
wages.
In such a climate of fear, PUMA is monitoring a well-run prison and nothing more.
PUMAs Labor Costs: Just $1.16 per pair of sneakers.

From beginning to end, the total cost of labor involved in making a pair of PUMA sneakers in
China amounts to just $1.16. This includes all direct and indirect labor, as well as downtime.
Direct labor costs include 11 cents to form the soles, and 83 cents to assemble the pair of
sneakers. Indirect labor adds another 23 percent to overall time and cost, or 22 cents, for a total
labor cost of $1.16 (94 cents in direct and 22 cents in indirect labor). The PUMA workers
would, at most, take home 94 cents.
In terms of time, it takes 2.69 hours of labor to complete a pair of sneakers. PUMA workers in
China earn 35 cents an hour in take-home wages ($0.94 $2.69 = $0.349).
A review of internal company documents has allowed us to put together the following chart
analyzing the steps, time, and cost in making a pair of PUMA sneakers. We believe this may be
the first time that the public has access to such precise production data.
Making a PUMA sneaker in China

Operations involved/Time/Labor cost
Assembly
Units (pair of Time in minutes Average wage per Labor cost per operation
sneakers) per hour hour including
production bonus
and overtime
Cutting 4.3 per hour 14 minutes $0.43 per hour $0.10
Sewing 0.9 per hour 67 minutes $0.43 per hour $0.473
Formation 2.3 per hour 26 minutes $0.43 per hour $0.187
Stock Fitting 6.6 per hour 9 minutes $0.43 per hour $0.065
Assembly time: 116 minutes per 1.933 hours Labor cost/Assembly: $0.83
Sole making
Spray paint 150 per hour 0.44 minutes $0.43 per hour $0.00287
Gluing 7.7 per hour 7.8 minutes $0.43 per hour $0.0558
Formation 15.6 per hour 3.85 minutes $0.43 per hour $0.0276
Modeling 20.8 per hour 2.88 minutes $0.43 per hour $0.0206
Sole making time: 15 minutes (14.93) Labor cost/Soles: $0.11 (0.10687)
Direct Labor: Total time to 131 minutes Total labor cost: $0.94
complete pair of (2.183 hours)
sneakers:
Indirect Labor: Adds 23% to 30.13 minutes Indirect labor cost: $0.22
time
Total time to make a pair of 161.13 minutes Total direct and $1.16
PUMA sneakers: (2.69 hours) indirect labor cost:
Indirect labor (excluding managerial staff) includes packing, maintenance, mechanics, cleaning,
etc., and along with downtime, such as bathroom breaks, could add another 23 percent to the
time and cost involved in completing a pair of sneakers. This would increase the time to 161.13
minutes (2.69 hours), and the cost to $1.16. The total cost then to assemble the sneaker,
including all direct and indirect labor and downtime is $1.16. Even accounting for all overtime
premiums and production bonuses, the take-home wage after deductions for room and board that
the workers would earn per pair of sneakers is 94 cents. (Sixty percent of the workers are
involved in direct production, while 23 percent are involved in indirect production. Management
staff totals 17 percent.)
PUMA uses the Olympics to target customers and
to boost its brand profile.
Important sports events in 2004 in the industry will be the Olympic Games in Greece and
the European Soccer Championship in Portugal. At these mega-sports events, PUMA will
approach customers with a targeted brand presentation and unique product combination of
sports, lifestyle and fashion that will contribute to support and boost its brand profile.
PUMAs Financial Annual Report 2003, page 3
PUMA Sponsors
World Class Athletes
2004 Jamaican Olympic Team
2004 Zambian Olympic Team
Italian National Football Team
Canadian Football League
Gold Medalist sprinter Konstantinos Kenteris (Greece) and mid-distance runner Noah Ngeny (Kenya).
Arsenal Footballer Robert Pires and Juventus goalkeeper Gianluigi Buffon
Formula One Racing Teams BMW Williams F1
World Champion Motor-cross Racer Travis Pastrana
U.S. Professional Athletes:

Serena Williams (2002)
Barry Zito (Oakland As 2002 Cy Young Award winning pitcher)
Tim Hudson (Oakland As)
Johnny Damon (Boston Red Sox)
PUMA thrives on its exploited and abused workers in China.

The Pou Yuen factory in China is not just a well-run prison, it is also a manufacturer of
enormous, even staggering, profits for PUMA. PUMA is making a profit of $12.24 an hour on
every production worker in Pou Yuen Plant F. Annually, PUMA is making a profit of
$38,188.80 on each worker. In the course of a year, PUMAs profits off the backs of its
Chinese workers in just a single plant, Pou Yuen Plant F, exceed $92 million.
PUMAs profits per worker in China
$12.24 an hour
$122.40 a day (10 hours)
$734.40 a week (6 days)
$3,182.40 a month
$38,188.80 a year
PUMAs net profits based on 2,422 production workers
$29,645.28 an hour
$296,452.80 a day (10 hours)
$1,778,716.80 a week (6 days)
$7,707,772.70 a month
$92,493,273.60 a year
In light of the above, the grueling hours at the Pou Yuen factory, the pitifully low wages, the
abuse and humiliations, and lack of basic human rights seem even crueler.
The fact that PUMA could be making such enormous profits off the backs of workers in China
who earn a take-home wage of just 35 cents an hour may seem unbelievable.
It may seem impossible. But this is how it works.
I. PUMA sneakers retail at $65 to $110.

Ninety percent of all PUMA sneakers are made in Asia, the vast majority in China. PUMA
sneakers retail online for anywhere between $65 to $110, with the median price being $75.
II. Total labor cost to make a pair of sneakers is $1.16. Workers wages amount to just
1.66 percent of PUMAs retail price.
III. PUMA actually makes a gross profit of $34.09 on every pair of $70 sneakers it sells.
The insignificance of PUMAs labor costs in China become even more shockingly clear in
light of PUMAs 2003 Annual Financial Report, announcing that PUMAs gross profit
margin on sales reached a full 48.7 percent! This means that even on a low-end $70
sneaker, PUMAs gross profit is $34.09! ($70 0.487 = $34.09)
PUMAs gross profit on each pair of sneakers exceeds by 29 times the pitifully low wages
the workers in China earn to make the sneaker ($34.09 $1.16 = 29.39).
Some popular Puma brand models made in China
(median price $75)
Mostro garment $110

Mostro Perf $100
400 m Trainer $95
Complete Heras $90
Complete Tenos $90
Complete Phasis $85
Repli Cat Mid $80
Sprint PF $80
Taper $75
Del Mundo $75
H. Street $70
H. Street Azzurri $70
Speed Cat $70
Repli Cat Low $70
AN Jan $65
GV Special $65
Diamond Stratejist $65
IV. PUMA is earning a profit of $12.24 an hour on each of its workers in China!
Since it takes 2.69 hours to make a pair of sneakers, PUMAs gross profit of $34.09 per
pair, translates into a gross profit of $12.67 per hour per production worker ($34.09
2.69 hours = $12.67). We can then arrive at PUMAs net profit per worker by subtracting the
average wage at the Pou Yuen plant, which is 43 cents an hour, including all overtime
premiums and production bonuses. This leaves PUMA with a stunning net profit of
$12.24 an hour per worker ($12.67 - $0.43 = $12.24).
PUMAs net profit of $12.24 per hour is 28 times greater than the pitifully low $0.43-
an-hour wages the workers are paid to make the sneaker. ($12.24 $0.43 = 28.5)
PUMA is sucking enormous profits out of China, off the backs of its exploited and abused
Pou Yuen workers.
On each of its workers in China, PUMA is clearing a profit of $38,188.80. Just for the
Pou Yuen Plant F alone, PUMAs annual profits exceed $92 million!
V. PUMAs net profit per sneaker, even after accounting for all corporate expenditures, is
still $7.42, which is more than 6.4 times greater than what the workers in China are
paid to make the sneakers.
Any way you look at it, PUMAs profits are everywhere.

In its annual report, PUMA declared that its net profit for 2003 was $225,864,210 on sales of
$2.13 billion. This puts PUMAs net profit margins at 10.6 percent of sales.
So even after accounting for all corporate expenditure including advertising, selling, general
and administrative costs, personnel, product design and development, etc., PUMA still
clears a net profit of $7.42 on every sneaker they make in China. ($70 0.106 = $7.42)
PUMAs net profit is more than six times greater than what their workers in China
were paid to make the sneakers. ($7.42 net profit per pair of sneakers $1.16 paid to
worker per pair = 6.4)
Pou Yuen Plant F
PUMA production/massive profits made on the backs

of the workers in China
PUMA Production Total Retail Value of PUMAs Total Gross PUMAs Net Profit
(units = pairs of PUMA sneakers Profit* Total*
sneakers produced (based on $70 low-end
by 2,422 workers) sneakers)
1,077 pairs per hour $75,390 per hour $36,715 per hour $7,991 per hour
10,772 pairs per day $754,040 per day $367,217 per day $79,928 per day
(10 hours) (10 hours) (10 hours) (10 hours)
64,629 per week $4,524,030 per week $2,203,203 per week $479,547 per week
(6 days) (6 days) (6 days) (6 days)
280,060 per month $19,604,200 per month $9,547,245 per month $2,078,045 per month
3,360,720 per year $235,250,400 per year $114,566,945 per year $24,936,542 per year
* Note: PUMAs gross profits are based on its reported 48.7% gross profit margin, which amounts to
$34.09 per $70 sneaker. PUMAs net profit (10.6%) is calculated after accounting for all corporate
expenses including advertising, selling, general and administrative costs, personal expenses, product
development design, etc. Production data is based on a 60-hour workweek.
VI. Even PUMAs advertising costs come to almost six times more than what it pays the
workers in China to make the sneaker.
In 2003, PUMA spent $206,428,299 on advertising, or 9.688 percent of its total sales. This
means that PUMA spends $6.78 to advertise the $70 pair of sneakers that they paid the
workers in China $1.16 to make. ($70 0.0968 = $6.78 to advertise)
So PUMA spends 5.8 times more to advertise the sneaker than it pays the workers to
make it. ($6.78 to advertise $1.16 to worker = 5.84)
PUMAs gross profit is 29.3 times greater than what

the workers in China are paid to make the sneaker.
PUMAs net profit, after accounting for all possible

corporate expenditures, is still 6.4 times greater than
the workers earn to make the sneaker.
Even PUMAs advertising costs per sneaker are

5.8 times greater than what the workers earn.
PUMAs corporate engine rides on the backs of its workers in
China.
As things stand now, it is clear that PUMAs entire corporate engine is riding on the backs of its
poorly paid workers in China. The workers in China, who may be taking home just 35 cents an
hour, are the ones ultimately paying all of PUMAs bills, which are not inconsiderable, including
$206 million in advertising, $475 million in operating expenses, $38 million on product
development and design, not to mention CEO salaries, and so on.
No one is suggesting that PUMA should not make a profit, but when is enough enough? Why
does the exploitation have to be so great? Could there not be room for some compromise?
We have seen that PUMAs profit per worker in China is $12.24 an hour and $38,188.80 for the
year. Just for Pou Yuen Plant F with its 2,422 production-line workers, this amounts to a
staggering $92 million plus a year in profits for PUMA, a virtual gold mine.
PUMAs Profits Soar 41 Percent!

--to more than a million dollars a day
Especially now, PUMA can easily revisit the issue of the pitifully low wages earned by PUMA
workers in China with an eye toward paying at least basic, subsistence level wages.
In its second quarter results, which appeared in the New York Times on Wednesday, July 28,
2004, PUMAs net profit soared 41 percent to $95.1 million on sales of $428 million (which rose
17.1 percent).
PUMA is making $31.7 million a month in profit, and more than one million dollars a day!
Just how great this exploitation really is can be demonstrated by the fact that with just 19.3
pairs of sneakers, PUMA can pay the worker their entire years wages. This means that
just within the first five days and two hours of work, before the first week is out, a worker
in China has already produced enough $70-PUMA sneakers to pay for his or her entire
years wages, including all production bonuses and overtime premiums!
The average production line wage at Pou Yuen Plant F in China is 43 cents an hour, and
$1,341.60 a year. This includes 20 hours of overtime a week and all production bonuses.
Average production line wage at Pou Yuen

including all overtime and production bonuses
(930 RMB per month)
$0.43 an hour
$25.80 a week (6 days)
$111.80 a month
$1,341.60 a year
On the other hand, we know it takes 2.69 hours, including all direct and indirect labor, to
complete a pair of PUMA sneakers. In effect then, in a 10-hour shift, each worker would make
3.72 pairs of sneakers (10 hours 2.69 hours/pair = 3.72 pairs of sneakers). Each production
line worker in the plant produces:
3.72 pairs of sneakers a day;

22.32 pairs of sneakers a week;
96.72 pairs of sneakers a month; and
1,160.64 pairs of sneakers a year.
Given that even low-end PUMA sneakers retail for $70, this means that producing just 19.3 pairs
of sneakers is sufficient to cover a workers entire years wage of $1,341.60. It takes a worker
just a little more than five days5.188 days to be exactto complete these 19.3 sneakers, which
means within the first week, the worker produces enough sneakers to pay for his or her wages for
the entire year.
China exports 2 billion pairs of shoes

each year to the U.S.
In 2002, China exported 2.05 billion pairs of shoes to the United States, which amounts to
a surprising seven pairs of shoes for every man, woman, and child in the country.
Of Chinas worldwide export of 3.96 billion pairs of shoes, 52 percent are bound for the U.S.
According to Chinas footwear industry, the shoes have an average unit price of just $2.44.
Chinas 7,200 shoe factories produce six billion pairs of shoes a year, 60 percent for export with
the remaining 40 percent for the domestic market.
Overall, Chinas leather industry is made up of 16,000 factories with over two million workers.
There are 2,300 tanneries, more than 7,200 shoe factories, 1,700 leather garment manufacturers,
and over 1,200 fur product manufacturers.
Certainly, there is plenty of room to pay at least a subsistence-level wage so the workers
could climb out of misery and into poverty.
What would happen if PUMA decided to do something quite remarkable, yet so easily
affordable, and gave its workers in China a mere 20-cent-an-hour increase in their base
wages? Would the sky fall in on PUMAs profits? Would the company have to fold and go
under?
Hardly. In fact, giving a wage increase of 20 cents an hour to its workers in China would
only mean that it would now take 7.5 days of work to pay for their entire years salary, up
from 5.133 days.
A 20-cent-an-hour increase in the workers base wage would bring their gross wage to 63 cents
an hour, or a 46.5-percent increase over the current 43 cents an hour.
This new wage, which would vastly improve the quality of life for all the workers in the plant,
would come to:
$0.63 an hour;
$6.30 a day;
$37.80 a week;
$163.80 a month; and
$1,965.60 a year.
It would now take 28 pairs of sneakers to cover the cost of a workers entire years wages,
something that would still take just 7.5 days to accomplish.
($1,965.60 $70/1 sneaker pair = 28 pairs of sneakers)
(28 pairs of sneakers 3.72 pairs of sneakers per day = 7.5 days)
Surely, this proposal of a twenty-cent-an-hour increase is reasonable, or at least within bounds to

start the discussion. By the way, this desperately needed twenty-cent-an-hour wage increase
would add 54 cents to the cost of the sneaker. Suppose the PUMA Corporation and concerned
consumers decided to split the difference, it would cost us just 27 cents each, but the impact for
the workers in China would be enormous.
The good things PUMA says about Itself
Whose version do you think is more accurate,
PUMAs or the workers in China?
PUMA recognizes its responsibility towards the creation of humane working conditions for all
employees working directly or indirectly for us.
Only with self-belief will individuals have the confidence to make things happen, take the tough
decisions and realize their ambitions for themselves and, ultimately, for the business.
With the jumping PUMA on our logo, we understand that the protection of the environment, both
product- and production-related, as well as the fair treatment of our suppliers and their employees are
necessities for our way to sustainability.
Every supplier is legally bound to follow the strict social and environmental standards detailed on our
S.A.F.E. manual. (PUMAs Social Accountability and Fundamental Environmental Standards.)
These standards guarantee that employees engaged in the production of PUMA goods are motivated
by working in an atmosphere of mutual respect and understanding.
Such goals cannot, and must not, be realized on the grounds of exploitative activities such as child
labor, forced overtime, or unhealthy and unsafe working conditions.
The social standards that have been laid down in our Code of Conduct contain the most important
social principles and are based on the conventions of the International Labor Organization (ILO).
For all employees involved in the production of PUMA goods, existing rules and regulations,
conventions and laws have to be strictly followed, for example, the ILO Core Conventions 87
(freedom of association), 98 (right to organize), 29 and 105 (forced labor), 100 (equal remuneration,
111 (discrimination) and 138 and 182 (child labor).
By rigorously enforcing the principles listed above, PUMA is able to ensure that labor is not
exploited and that production methods are continuously reviewed.
We are ecologically and socially accountable to the environment, our suppliers, manufacturers,
employees and customersespeciallythe generations to come.
By carrying out audits at all our direct suppliers, as well as documenting the audit results, we hold
our manufacturers accountable for their social performance and at the same time evaluate the social
footprint of PUMA.
The above quotes are drawn from PUMAs

2003 Perspective Sustainability Report.
Note: In the Sustainability Report, PUMA not only quotes the 6th century BC Chinese Philosopher Lao-
Tzo, but also the great Russian novelist Fyodor Dostoyevsky who said: Everyone is responsible to
everyone for everything. However, it is unfortunate that PUMA did not go on to lift quotes from
Dostoyevskys White Nights, a tale of his imprisonment in Siberia for attempting to exercise political
freedom. This would have been much more appropriate for the workers in China.)
Shipping documents show PUMA mark-ups from 494 to 1286
percent!
A review of U.S. Customs based documents for April and May 2004, shows at least 14
shipments containing 198,611 pairs of sneakers originating from Pou Yuen in China being
exported to PUMA North America. The cargo entered through the port of Los Angeles.
The declared Customs values of the PUMA sneakers ranged from a low of $3.41 to a high of
$7.13, with the average declared value being $5.41 per pair. Something is wrong here. Landed
customs values are supposed to represent the entire cost of production, including all materials,
accessories, and direct and indirect labor, overhead, profit to the Pou Yuen factory in China, as
well as shipping costs. PUMAs declared customs values appear far too low. We estimate that
the real landed customs value of PUMAs sneakers should range from approximately $10.94 for
a $65 pair of sneakers, to $18.51 for a $110 pair.
Perhaps PUMA is exploiting some corporate tax loophole which permits it to declare only a
partial value, thereby lowering its tariff charges. Only PUMA can answer this question.
(Samples of the shipping documents are attached).
Either way, at a minimum, PUMA is marking up the price of its sneakers by at least 494
percent. For example, a low-end $70 PUMA sneaker would enter the U.S. with a landed
customs value of approximately $11.86. This $11.86 would represent the total cost of
production. PUMAs mark-up would be 494 percent, or $58.14.
So again, any way you look at it, there is plenty of money out there to address the pitifully low
wages and abuse the PUMA workers in China are staggering under.
PUMA at a Glance
Sales: $2,130,780,000.
Sales increased 23 percent in 2003. Europe accounts for 68 percent of sales, followed by
the U.S. with 19 percent. U.S. sales totaled $25,400,000.
Net profit: $225,864,210.
Net profit was 10.7 percent of sales.
Advertising: $206,428,300.
Advertising was 9.8 percent of sales. PUMA spends $3,969,775 a week on advertising.
PUMA sources production in more than 40 countries using over 300 independent
suppliers and manufacturers, more than half of whom are in the Far East. Footwear
accounts for 67 percent of sales, and 90 percent of footwear is sourced in Asia.
PUMA is a member of the Fair Labor Association.
PUMA is on the Steering Committee of the World Federation of the Sporting Goods
Industry.
ACTION ALERT
You Can Help
Ask PUMA to Do the Right Thing
1. PUMA should not pull out of Pou Yuen plants F and D. This would be the worst thing
they could do. The workers desperately need these jobs, and they are willing to work
very hard. But, they also want to be treated like human beings. PUMA should stay and
work with its contractor to clean up the factories, and see that the rights of the workers
are finally respected.
2. The climate of repression, abuse and fear must be ended. Workers must have the right to
speak the truth publicly without fear of being immediately fired. The routine practice of
yelling at and humiliating the workers must end.
3. All overtime should be voluntary and paid correctly.
4. We believe that healthy profits and sustainable wages can co-exist. PUMA should
increase the workers base wage by 20 cents an hour, which would allow the workers to
climb out of misery and at least into poverty. This 46 percent increase in wages would
have an enormous positive impact on the lives of the workers, and yet it is easily
affordable.
5. Internationally recognized core labor standards should be respectedin fact and not just
words. PUMAs workers in China should be afforded their legal right to freedom of
association and the right to organize an independent union.
KEY CONTACTS
PUMA/ GERMANY (International Headquarters)

Mr. Jochen Zeitz, Chairman and CEO
PUMA AG
Wurzburgerstrasse 13
91074 Hezogenaurach, GERMANY
Phone: (49) 9132 81 0 Fax: (49) 9132 81 2246
Email: info-de@PUMA.com or Jochen.Zeitz@PUMA.com
PUMA/ USA
Mr. Jay Piccola, President and General Manager
PUMA North America
5 Lyberty Way
Westford, MA 01886
Phone: (1) 978 698 1000 Fax: (1) 978 698 1174 Or (1) 877 786 2329
Email: customerservice@PUMA.com or Jay.Piccola@PUMA.com
NATIONAL LABOR COMMITTEE

Charles Kernaghan, Executive Director
540 West 48th Street, 3rd Floor
New York, NY 10036
Phone: 212-242-3002 Fax: 212-242-3821
www.nlcnet.org
Email: nlc@nlcnet.org
CHINA LABOR WATCH

Li Qiang, Executive Director
China Labor Watch
P.O. Box 4134
Grand Central Station
New York, NY 10163-4134 U.S.A.
Phone: 917-257-8589
Email: qiang@chinalaborwatch.org
NATIONAL LABOR COMMITTEE
IN SUPPORT OF WORKER AND
HUMAN RIGHTS
540 West 48th Street, 3rd Floor
New York, NY 10036
Tel: 212-242-3002
Fax: 212-242-3821
www.nlcnet.org
August 5, 2004
Mr. Jochen Zeitz

Chairman and CEO
PUMA AG
Wurzburgerstrasse 13
91074 Hezogenaurach, GERMANY
Dear Mr. Zeitz:
I write seeking your immediate help in addressing serious concerns regarding PUMAs
production in China at Pou Yuen Plants F and D in Dongguan. There exists a definite climate of
fear and repression in these factories. Every worker knows that if they dare to speak the truth
publicly they would be immediately fired. For merely suggesting factory improvements, the
workers feel they would be immediately fired. Supervisors routinely humiliate the workers,
shouting and yelling at them. Overtime work is mandatory, the hours grueling, days off are rare,
and the wages are below subsistence levels.
I am hopeful, however, that with PUMAs serious intervention, conditions can quickly improve.
I must state at the very outset that no one wants PUMA to pull its production from these
factories. In fact, that would be the worst thing PUMA could do, since once again the workers
would be being punished for daring to speak the truth. The workers do not want PUMA to pull
out. They desperately need these jobs. They have already proven how hard they are willing to
work, but they also want to be treated like human beings, with respect for their basic rights. We
want PUMA to keep its work in these factories while at the same time working with your
contractor to clean up these plants and to guarantee that the fundamental rights of the workers
will finally be respected.
There are several things PUMA can do immediately. Steps must be taken to end the atmosphere
of fear and repression. Supervisors must stop verbally abusing and humiliating workers. All
overtime should be voluntary and paid correctly. Currently the workers are kept from 7:30 a.m.
to 11:00 p.m. or midnight. Also, this month the workers were informed that they would be
receiving only 80 percent of their wage as punishment for failing to reach their production goals.
Dormitory conditions should improve, especially addressing the need for hot water. Factory
cafeteria food is unpalatable, and must be improved.
NLC Letter to PUMA, August 2, page 2

As it stands now, workers receive just one, to a maximum of three days off in a month, and just
ten holidays off all year, which does not allow them enough time to visit their families in the
countryside. Some workers have no been home in three, four, and even seven years.
But there are two larger and even more serious issues, having to do with wages, which are below
subsistence levels, and the lack of Freedom of Association. Currently, the base wage at the
factory is just 31 cents an hour.
We would like to challenge PUMA to do something quite remarkable, though easily affordable.
We ask that PUMA increase the base wage of the workers in China making PUMA
sneakers by just twenty cents an hour. This tiny increase would allow the workers in China
to climb out of misery and at least into poverty, and would have an enormous positive
impact on the lives of all these workers.
A twenty-cent-an-hour wage increase would add just 54 cents to the total cost to make the
sneaker. This pales in comparison to PUMAs gross profit of $34.09 on every pair of sneakers
made in China. Indeed, currently PUMA is netting a very healthy profit of $12.24 an hour from
every production worker in China making PUMA goods.
If the 54-cent increase is too much for PUMA to handle alone, concerned consumers I am sure
would be more than anxious to split the difference with you, with each of us paying 27 cents
more per pair of sneakers.
This is a very serious, but readily doable, proposal. If PUMA does this, PUMA will stand alone,
far ahead of all other companies, who will then have to follow your lead. I believe PUMA would
receive enormous recognition and support around the world for taking this step, vastly increasing
your base of loyal consumers.
The fundamental internationally recognized human right of Freedom of Association is clearly

being violated at PUMAs contractors plants in China. This too is a serious and complex issue,
but one that can and must be dealt with wisely. China Labor Watch and other worker rights
organizations on the ground in China will gladly work with PUMA to achieve this end over time
and in a reasonable manner. Popular education meetings with the Pou Yuen workers would be a
necessary first step, enabling the workers to learn their legal rights and gain a growing
confidence to exercise them.
The National Labor Committee and China Labor Watch are ready to help in any way we can. I
thank you for your serious attention to this critical human rights issue and look forward to a
dialogue with you.
Sincerely,
Charles Kernaghan
Director
cc: Jay Piccola, President and General Manager, PUMA North America
Profit Comparison: PUMA workers in China vs. PUMA Corporation
$40.00 $40.00
$35.00 $35.00 $34.09
Gross Wage per

Hour Gross Profit per
$30.00 $30.00
(43 cents) Hour per Worker
($12.67)
Take-Home
Wage per Hour Net Profit per
$25.00 $25.00
(35 cents) Hour
($12.24)
Total Labor Cost

per Sneaker $20.00 $20.00
Gross Profit per
($1.16) Sneaker
($34.09)
Take-Home
$15.00 $15.00 Net Profit per
Wage per
Sneaker
Sneaker $12.67
$12.24 ($7.42)
(94 cents)
$10.00 $10.00
$7.42
$5.00 $5.00
$1.16 $0.94
$0.43 $0.35
$0.00 $0.00
PUMA Workers in China PUMA Corporation

Pou Yuen 3
Pay Stub
April 2004
ID
This Pou Yuen pay stub shows 43.5 overtime hours in the month of April, or approximately 11 overtime hours
a week. Her base wage was 31 cents an hour. However, with the overtime premium and production bonus -
which could reach 16 cents an hour - this woman earned a take home wage of 42 cents an hour, which is high-
er than the average 35 cents an hour. After deductions amounting to 180 RMB ($21.77) for room, food, health
insurance and miscellaneous, out of her gross April pay of 860 RMB ($103.99) she was left with 680 RMB
($82.22). We cannot be 100 percent certain of these figures because the workers report they are frequently
forced to labor off the clock, after having punched their time cards out. If this were the case, of course her
average hourly wage would be considerably lower.
Page 1
AMS Bill of Lading Detail 7/29/2004
Source: AMS Database
Shipper Consignee
P&O NEDLLOYD LOGISTICS (CHINA) LTD. PUMA NORTH AMERICA,
SHENZHEN BRANCH. 35F, GOLDEN C/O JOUNEY'S,GENESCO
BUSINESS CENTRE, 2028 SHENNAN DONG WAREHOUSE,GENESCO PARK,
LU, SHEN ZHEN, CHINA O/B POU YUEN NASHVILLE,TN 37202-0731
MARKETING CO., LTD **
Notify Party Packaging Information

VANDEGRIFT FORWARDING COMPANY,INC. Weight: 6239 KG
11099 SOUTH LA CIENEGA BOULEVARD Measurements: CM
SUITE 242 LOS ANGLES, CA 90045 Quantity: 751 CTN
ATTN:MR. RAYMOND RODRIGUEZ TEL:
TEU's: 2.00
(310)641-1184, FAX:(310)641-9994
Shipment Detail
Carrier: POCL - P&O NEDLLOYD Country of Origin: PEOPLES REP OF CHINA
Vessel: NYK ARTEMIS Coastal Region: WEST
Voyage: 4131 US Port: 2704 LOS ANGELES
B/L: POCLSZP30573502 For Port: 57018 SHEKOU
Pre Carrier: SHEKOU US Dest:
Lloyd's Code: 9247742 For Dest:
Inbond Code: Mode of Transport: 10
Estimated Value: $ 43,526.00 Arrival Date: 04/05/2004
AMS Commodities
Container Qty Description
KNLU5017413 751 PUMA"H.STREET WN'S"
RUNNING SHOES (NO SWPM)
O/NO.:000716756
1090 PAIRS/109 CTNS.
PUMA"H.STREET"
RUNNING SHOES
O/NO.:000716763
1300 PAIRS/130 CTNS
PUMA"SPEED CAT US"
MOTORSPORT SHOES
O/NO.:000716765
3820 PAIRS/382 CTNS
PUMA"H.STREET"
RUNNING SHOES
O/NO.:000716764
1300 PARIS/130 CTNS
INVOICE NO.PUMA-8350
HS NO.:6404.6403
**BLK.A-B,5/F,HOP HING
IND.BLDG.,702 CASTIL PEAK
RD,KLN,HK.
S/C NO.:03-412
Note: Bills of lading that contain multiple commodities will list the total weight and TEU's for the entire bill of lading
This listing contains information which is the property of the Journal of Commerce. It is provided for the exclusive use of our clients in accordance with our purchase agreement. It may
not be sold or released for the benefit of a third party. Journal of Commerce Two World Trade Center 27th Floor New York, NY 10048
Page 2
THIS SHIPMENT CONTAINS NO

SOLID WOOD PACKING
MATERIALS.
NON-NEGOTIABLE WAYBILL
ISSUED
NO CERTIFICATION REQUIRED
PER SHIPPER
PIERS Commodities
Qty Units Commodity Description Harm Code JOC Code
751 CTN PUMA H STREET WN S RUNNING SHOES 640590 7008550
PUMA Store: Product H. STREET http://store.puma.com/pumaUSStore/product.asp?catalog%5Fname=Pu...
| my account | help | your bag is empty
BACK
item number: 18077903

H. STREET
Color: Lime Punch/Black/Vapor White
Price: $70.00
Incorporating the characteristics of a distance track spike, the H.

Street's sleek, low profile silhouette, minimal outsole and
lightweight mesh upper combine the worlds of sport and fashion
into a colorful and versatile shoe.
Select Size: sizing chart
Check out this item in other colors:
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PUMA NA 2004. Privacy Policy | Terms of Use
1 of 1 7/27/2004 2:57 PM
PUMA Store: Product SPEED CAT US http://store.puma.com/pumaUSStore/product.asp?catalog%5Fname=Pu...
BACK

SPEED CAT US
Color: Kangaroo/Snow White
Price: $70.00
The Ideal product for the race sport enthusiast and lifestyle
statement at the same time. The Speed Cat is made of soft
nubuc and features an oil resistant and non-slippery rubber
outsole.
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1 of 1 7/27/2004 2:50 PM
$70
$65 1
0 = $15.3
7.5
4.41 $6
$
rk-Up!!
Ma
1,431%
Page 1
Shipper Consignee
P&O NEDLLOYD LOGISTICS PUMA NORTH AMERICA
LIMITED,SHENZHEN BRANCH 35F GOLDEN C/O NYK LOGISTICS,
BUSINESS CENTRE, 2028 SHENNAN DONG 2417 EAST CARSON STREET,
LU, SHEN ZHEN CHINA O/B POU YUEN LONG BEACH, CA 90810
MARKETING CO., LTD.

VANDEGRIFT FORWARDING COMPANY Weight: 5376 KG
11099 SOUTH LACIENEGA BLVD #242, Measurements: CM
LOS AGELES, CA 90045 Quantity: 850 CTN
ATTN:MR.MIN HONG
TEU's: 1.30
Shipment Detail
Vessel: NYK ANTARES Coastal Region: WEST
Pre Carrier: SHEKOU GD US Dest:
AMS Commodities
PONU7451260 850 PUMA"H.STREET WN'S"
RUNNING SHOES (NO SWPM)
O/NO.:K239371
8000 PAIRS/800 CTNS
PUMA"GV LUX"
HERITAGE MEN'S
O/NO.:K239325
500 PAIRS /50 CTNS
***BLK.A-B,5/F, HOP HING
IND. BLDG., 702 CASTIL
PEAK RD, KLN, HK
S/C NO.03-412
SOLID WOOD PACKING
MATERIALS
ISSUED
PER SHIPPER
Marks & Numbers

Container Marks & Numbers
PONU7451260 PNA
Page 2
Marks & Numbers

K239371
(IN DIA.)
NO MARKS
LONG BEACH
MADE IN CHINA
C/NO.1-800
STYLE NO.:
180188 26
-DO-
K239325
C/NO.:1-50
STYLE NO.:
341326 02
PIERS Commodities
850 CTN PUMA RUNNING SHOES 640590 7008550
PUMA Store: Product GV SPECIAL http://store.puma.com/pumaUSStore/product.asp?catalog%5Fname=Pu...
BACK

GV SPECIAL
Color: White/Marine
Price: $65.00
This classic tennis shoe was once worn by a tennis great. This
super comfortable and stylish silhouette continues to be our best
selling classic shoe - one we have updated with color and fashion
influence.
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1 of 1 7/27/2004 2:59 PM
Page 1
Shipper Consignee
P&O NEDLLOYD LOGISTICS O/B VENDOR: PUMA NORTH AMERICA,C/O
EAST CITY TRADING LTD. 8/F FUNG NYK LOGISTICS,2417 EAST CARSON
SHUN COMM BLDG.591 NATHAN ROAD, STREET, LONG BEACH,
CA 90810

VANDEGRIFT FORWARDING COMPANY INC. Weight: 7162 KG
11099 SSOUTH LA CIENEGA BOULEVARD. Measurements: CM
SUITE 242,LOS ANGELES,CA 90045 TEL: Quantity: 840 CTN
(310)641-1184 FAX:(310)641-9994
TEU's: 1.73
ATTN:MR.MIN HONG
Shipment Detail
Vessel: NYK PEGASUS Coastal Region: WEST
B/L: POCLXMN30201092 For Port: 57069 XIAMEN
Pre Carrier: FUZHOU FJ US Dest:
AMS Commodities
FRLU9604540 840 PUMA "MOSTRO LEATHER W'S"
MOTION SHOES
O/NO.: K241207
ART NO.: 340964 07
US$44,416.80
H.S CODE: 6403
240CTNS 2400PAIRS
2050.4KGS 16.9CBM
PUMA "MOSTRO PERF. W'S"
MOTION SHOES
O/NO.: K241234
ART NO.: 340081 03
US$113,131.50
H.S CODE: 6403
600CTNS 6000PAIRS
5111.6KGS 42CBM
S/C#:03-412
FCR NO.:NC4PK403007
SOLID WOOD PACKING
MATERIAL.
CARGO DECLARATION DATA
Page 2
CHARGE(AMS) COLLECT
PER SHIPPER
FOR ABOVE 01 CONTAINERS
Marks & Numbers

FRLU9604540 PNA
P.O. NO.: K241207
(IN DIAMOND)
LONG BEACH, CA
MADE IN CHINA
C/NO.: 1-240
STYLE NO.:
340964 07
LOT NO.: 040410
PNA
P.O. NO.: K241234
(IN DIAMOND)
LONG BEACH, CA
MADE IN CHINA
C/NO.: 1-600
STYLE NO.:
340081 03
LOT NO.: 040410
PIERS Commodities
840 CTN PUMA SHOES 640590 7008550
PUMA Store: Product MOSTRO GARMENT FS WNS http://store.puma.com/pumaUSStore/product.asp?catalog%5Fname=Pu...
BACK

MOSTRO GARMENT FS WNS
Color: Cashmere Blue/Vapor White/Dark Shadow
Price: $110.00
This form-fitting shoe is as comfortable as a slipper, yet built with

unique and modern styling. Here it makes a true fashion
statement in garment leather. The Mostro Garment is made from
a garment leather and features an EVA midsole and carbon
rubber outsole.
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1 of 1 7/27/2004 3:01 PM
PUMA Store: Product MOSTRO PERF WNS http://store.puma.com/pumaUSStore/product.asp?catalog%5Fname=Pu...
BACK

MOSTRO PERF WNS
Color: Blossom Pink
Price: $100.00
This form-fitting shoe is as comfortable as a slipper, yet built with

unique and modern styling. Low profile, medial side hook and
loop closure and soft leather upper, complete its appeal. It also
contains an EVA midsole and a Carbon Rubber Outsole.
SEARCH
1 of 1 7/27/2004 3:02 PM
Page 1
Shipper Consignee
P&O NEDLLOYD LOGISTICS(CHINA)LTD., PUMA NORTH AMERICA,C/O
SHENZHEN BRANCH. 35F,GOLDEN LADY FOOTLOCKER,WOOLWORTH DIST
BUSINESS CENTRE,2028 SHENNAN DONG CENTER,
LU,SHEN ZHEN,CHINA O/B VENDOR 3810 S.US HWY 77,JUNCTION CITY,
(SEE ATTACHED BOOKING)** KS66441

VANDEGRIFT FORWARDING COMPANY Weight: 10220 KG
11099 SOUTH LACIENEGA BLVD #242 Measurements: CM
LOS AGELES, CA 90045 Quantity: 1000 CTN
ATTN:MR.RAY RORIGUEZ TEL
TEU's: 2.47
310-641-1184 FAX310-641-9994
Shipment Detail
Vessel: NYK PEGASUS Coastal Region: WEST
Pre Carrier: SHEKOU GD US Dest:
AMS Commodities
GESU4893210 720 PUMA"ANJAN W'S"RUNNING
SHOES
(NO SWPM)
O/NO.:5401564-08
ART NO.:340296 47
100CTNS 8.18CBM 990.3KGS
O/NO.:5401650-08
ART NO.:340296 48
100CTNS 8.18CBM 990.3KGS
O/NO.:5401547-08
ART NO.:340296 47
400CTNS 34.88CBM 4120KGS
O/NO.:5401645-08
ART NO.:340296 48
120CTNS 10.464CBM 1236KGS
SOLID WOOD PACKING
MATERIALS
S/C NO.:03-412
ISSUED
1000 CTNS 10220.6 KGS
Page 2
86.12 CBM
PER SHIPPER
FOR ABOVE 02 CONTAINERS
PONU0337893 280 PUMA"ANJAN W'S"RUNNING
SHOES
(NO SWPM)
O/NO.:5401645-08
ART NO.:340296 48
**WALESON INTERNATIONAL
LTD.ROOM B,13/F.,FULLWIN
COMMERCIAL CENTRE,
573 NATHAN ROAD,MONGKOK,
KOWLOON,HONG KONG
PIERS Commodities
1000 CTN PUMA RUNNING SHOES 640590 7008550
PUMA Store: Product ANJAN WNS http://store.puma.com/pumaUSStore/product.asp?catalog%5Fname=Pu...
BACK

ANJAN WNS
Color: Bubblegum/Black
Price: $65.00
Influenced by Puma's great running heritage, this lightweight

breathable shoe fits in all day to day aspects of life. Lightweight
open mesh and soft, rich vintage suede distinguishes this 70's
classic.
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1 of 1 7/27/2004 3:03 PM

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NATIONAL LABOR

CHINA LABOR WATCH

PUMAS WORKERS IN CHINA

PUMAS WORKERS IN CHINA

Enduring Grueling Hours, Pitifully Low Wages, Exploitation,

The National Labor Committee and China Labor Watch