Global Network Demands Specialized Pay El Salvador Workers Robbed of Wages and Severance
This week’s Taipei Cycle Show will feature Specialized Bicycle Components’ Executive Vice President Bob Margevicius as a speaker on sustainability. However, even as Specialized’s Vice President discusses sustainability, the irony is that the brand still owes a significant amount of wages and severance to a group of workers in El Salvador, leaving the workers in economic hardship.
In 2022, the APS factory in El Salvador shut down and terminated the employment of 831 workers. When the workers started work on the morning of 30 August 2022, security guards employed by the industrial park where the factory was located began evicting the workers, on account that the factory owner failed to pay rent. Due to the sudden termination, the workers were owed unpaid wages, severance, and terminal benefits of approximately US$2 million. The supplier codes of conduct of brands buying from the factory require that workers receive their legally required wages and benefits. As a result of engagement by the Worker Rights Consortium (WRC), several buyers from the APS factory, Gildan, Kellwood, and Alwants, paid US$1.34 million, or 67% of the compensation. However, Specialized is the one buyer that did not pay anything at all. Instead, in 2024, Specialized announced on its website that it would pay US$44,000, but the workers never even received this money which is but a fraction of the outstanding compensation they are still owed.
Under El Salvador’s Labour Code, when a worker is terminated without fault of their own, their employer is obligated to pay them severance, in the amount of 30 days’ base wages for each year of service plus compensation for all unused vacation days and the legally required year-end bonus, prorated based on the day of the year when the termination occurs. The Salvadoran Ministry of Labour calculated that the total amount that is legally owed to these workers for unpaid wages, severance, and terminal benefits was approximately US$2 million. Since the factory owner is insolvent, the responsibility is on buyers from the factory to pay the workers.
Clean Clothes Campaign (CCC), Green America, a nonprofit organization that promotes ethical consumerism, and others have tried to engage with Specialized, but the response from Specialized was minimal. Specialized even blocked the email domains of several CCC organizations which have attempted to contact them.
Specialized’s Code of Conduct claims that its suppliers should pay legally mandated benefits, which in this case entails payment of the unpaid wages, severance, and terminal benefits calculated by the Salvadoran Ministry of Labour as owed to the former APS workers. Specialized’s failure to secure full compensation for APS workers has thus violated its own code of conduct.
Mr. Margevicius will be returning to the Taipei Cycle Show this year to speak on behalf of Specialized. Ray Cheng, Clean Clothes Campaign’s East Asian Coalition Board Member, said: “To rub salt to the wound, Mr. Margevicius will be speaking at an event pertaining to the cycling industry’s role for a sustainable future, under advocacy for political and cultural change, even as Specialized has not abided by its own code of conduct for sustainability, and is non-compliant with the local laws of El Salvador to pay former APS workers the wages, severance, and terminal benefits legally owed to them.”
Mr. Margevicius is also the Vice-President of the World Bicycle Industrial Association (WBIA), which launched the Sustainable Supply Chain (SSC) Project at the end of last year. At the project’s launch, Mr. Margevicius said that the SSC operating model is “designed and implemented to globally align the cycling industry with key sustainability principles, aiming to reduce environmental impact, enhance social responsibility, and ensure long-term economic resilience.” In 2019, Mr. Margevicius was also awarded an honorary city citizenship by the Taichung City Government, which he views as his second home. Director of the Economic Development Bureau Hank Kao at the Taichung City Government also said that Mr. Margevicius has become a great friend of Taiwan’s bicycle industry over the past 40 years.
Roy Ngerng, Regional Urgent Appeal Coordinator at the Clean Clothes Campaign, said: “Mr. Margevicius should put his money where his mouth is, and ensure that Specialized abide by its social responsibility to the APS workers in its supply chain.”
Soon after the APS factory closed, the workers testified that they were unable to pay rent, utility bills, and their children’s school fees, and many of them were not even able to pay for medical care or buy enough food to eat for their families. Ana Cecilia, a former APS worker had said: “My kids and I are only able to eat rice, beans, and eggs. That is all we can afford without work and without money.”
Additionally, CCC points out that Taiwan bicycle manufacturer Merida holds 35% of Specialized’s shares and is a very important shareholder. At the upcoming Taipei Cycle Show 2025, the Bicycling Alliance for Sustainability (BAS), which was jointly established between Merida and Giant, will be releasing a ‘Human Rights Code of Conduct’, which is intended to “protect labour rights in the industry”, as well as to ensure that all workers are “treated fairly, equally, and with dignity.”
“As such, we demand that Specialized take corporate responsibility to pay the APS workers their legally-mandated compensation, and for Merida to urge Specialized to abide by its social and corporate responsibility to the workers,” said Cheng.
