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November 03, 2006

Your Ford or GM May Be Made by a Slave in Brazil

posted by MR WAVETHEORY at 11/03/2006 06:24:00 PM

Bloomberg has an investigative report on how companies like Nucor Corporation (NYSE NUE), Ford Motor Company (NYSE F), and General Motors Corporation (NYSE GM) are buying metal from companies in South America that use slave labor.

Modern-day slaves in Latin America aren't bought and sold as slaves were in the U.S. before the Civil War. They're lured from impoverished cities in Brazil's northeast or from the Andean highlands of Bolivia and Peru.

Recruiters dispatched by slave camp owners promise steady- paying jobs, Campos says. Once at the Amazon camps, some workers are forced -- at times at gunpoint -- to work off debts to their bosses for food and clothing bought at company stores.

Many go months without pay or see their wages whittled to nothing because of expenses such as tools, boots and gloves. Lack of money, an impenetrable jungle and a long distance to get home make it impossible for the slaves to leave.

At camps visited by Bloomberg News in Brazil and Peru, slaves live where they work, in clearings surrounded by miles of jungle. They make charcoal, mine for gold, log mahogany and clear trees for cattle pastures.

Slavery is being defended by force.
On Jan. 28, 2003, gunmen shot and killed three labor ministry inspectors and their driver execution style at a farm near Unai, Brazil. ``You can't underestimate what's at stake here,'' Silva says. ``People are willing to defend slavery by force.''

Labor prosecutor Lopes concludes that Cosipar is responsible for conditions at Transcameta. On the fourth day of the inspection, a representative of Cosipar and the camp's owner sign an agreement with the prosecutor. Cosipar, without admitting it was the formal employer of the workers, agrees to pay back wages and damages and to improve bathrooms and barracks at the camp.

Dos Reis was paid $2,253 (4,920.94 reais) for back wages and damages, according to the labor ministry. The agreement, dated Sept. 5, says there are ``absolutely degrading conditions'' at the camp, with ``total violation of minimum principles of human dignity for the workers.''

There are over 1 million slaves in Brazil today.

More than a century after Brazil became the last country in the Americas to abolish slavery, in 1888, nearly 1 million men and women work for little or no wages as forced laborers in Latin America, according to the Geneva-based International Labor Organization (ILO), a United Nations agency that tries to improve working conditions.

The products of Latin American slave labor end up in cars and trucks made in the United States by Ford Motor Co., General Motors Corp., Nissan Motor Co. and Toyota Motor Corp. Pig iron that goes into steel used by Whirlpool Corp., the world's largest appliance maker, and is used in foundries at Kohler Co., which makes sinks and bathtubs, can be traced back to slaves in Brazil.

Ford Stops Buying

Nucor Corp., the second-largest U.S. steel company, buys pig iron made with charcoal produced by slaves. In Peru, slaves mine gold that ends up at the world's biggest banks. Other Peruvian slaves log mahogany that's been used in Andersen Corp. windows and C.F. Martin & Co. guitars.

Three companies -- Ford, General Motors and Kohler -- say they didn't know that steel they were using was made from material produced with the help of slaves. Ford and Kohler have bought pig iron from importer National Material Trading Co., which is supplied by a charcoal camp that Brazilian officials say uses slaves.

Dearborn, Michigan-based Ford, the world's third-largest automaker, and Kohler, Wisconsin-based Kohler say they stopped buying pig iron from National Material Trading immediately after being asked by Bloomberg News about the Brazilian findings.

``We wanted to suspend the shipments until we understand exactly what is going on and if in fact this material is making its way into our supply chain,'' says Tony Brown, Ford's senior vice president for global purchasing. ``We take this matter very seriously.''

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