Market Scene : Firm Loses Its Shirt in Anti-Apartheid Market : Cashing in on the legalization of the African National Congress isn’t as simple as it seems. South Africa’s police may want your garments--and not to wear--or racial violence may put a crimp in your sales.

Mixing business and politics doesn’t always make for good business or even good politics. But it sure can make for a wild ride in the South African marketplace.

Consider the case of Zenzeleni Clothing, an unusual enterprise founded by a politically active black trade union, staffed with laid-off union workers and chasing a piece of the anti-apartheid T-shirt market.

Back in January, Zenzeleni’s chief executive, Glen Cormack, received a telephone order for 1,000 T-shirts with the emblem of the African National Congress and the words: “ANC Lives. ANC Leads.”

Such a T-shirt was, strictly speaking, promoting an illegal organization. But Cormack decided to go ahead anyway. “It was a calculated risk,” he says.

The day the customer was supposed to pick up the shirts, the police arrived instead. They confiscated the T-shirts and began investigating charges against Cormack and his struggling young company.

A few weeks later, though, the firm’s fortunes began to look up when President Frederik W. de Klerk legalized the ANC and freed its leader Nelson Mandela, touching off a flurry of rallies and celebrations.

The police returned the confiscated shirts just as millions of young activists, eager to fly their new colors, were making anti-apartheid T-shirts their uniform.

Zenzeleni’s two-story factory on the steamy Durban waterfront hummed with the sound of sewing machines as 300 black workers cranked up the assembly line. By April, Zenzeleni was selling 3,000 T-shirts a day, from the Communist Party hammer and sickle to the words of the ANC’s unofficial anthem, Nkosi Sikelel’ iAfrika (God Bless, Africa).

“We’d put a design together and ask the workers what they thought,” Cormack remembers. “A few shouts of ‘Viva!’ and we’d print it.”

But the euphoria didn’t last long.

First, competitors from the Far East came in, selling products like the “Official Welcome Home Nelson Mandela T-Shirt” for less than it cost Zenzeleni to buy material.

And then there was a factor nobody had foreseen--ANC supporters who were wearing the T-shirts began getting attacked in their homes near Durban. The region already had been the scene of nearly 4,000 deaths in a three-year war between supporters of Mangosuthu Gatsha Buthelezi’s Inkatha movement and Mandela’s ANC. And Zenzeleni’s T-shirts helped identify the targets.

Looking back now, Cormack admits, “We overlooked the whole question of violence.”

The company quickly learned that the principles of free-market economics have a unique South African corollary, which Cormack puts this way: “It doesn’t matter what price you’re charging, if the wearer is going to get attacked he’s not going to buy it.”

Today, with the market virtually saturated, Zenzeleni sells only about 30 T-shirts a day. Boxes of unsold shirts are stacked high in its dispatch room, and the company is moving into the safer world of work wear.

“We live hand-to-mouth,” Cormack said the other day. “Where we get the money for wages is an issue every week. And every day we wonder where our next order is coming from.”

Despite being burned by the T-shirt market, Zenzeleni itself remains a rare and promising attempt by organized labor to solve one of South Africa’s most pressing problems--a black unemployment rate as high as 50%.

The clothing business has been hit hard by cheap imports and mismanagement; 25 clothing companies in South Africa and its nominally independent “homelands” shut their doors in the first four months of this year.

The South African Clothing and Textile Workers’ Union, SACTWU, seeing massive layoffs among its 200,000 members, decided to start its own cooperative factory as a pilot project designed to put people back to work.

It won the promise of financing in layoff negotiations with a textile company, and, 18 months ago, started Zenzeleni Clothing. The name, chosen by the employees, is Zulu for “do it yourself.”

The union approached Cormack, who is white, to be the cooperative’s managing director--an offer that should have been easy to refuse.

At the time, Cormack was personnel director for Tiger Oats, South Africa’s largest food company with 24,000 employees and more than 200 factories. He had a big salary with a company Mercedes-Benz and a grand office overlooking a duck pond. And he’d just returned from a yachting vacation in the Greek isles.

But Cormack was intrigued. As an industrial relations expert, he had for years negotiated with South Africa’s black unions. And although he spoke for management, he had earned a reputation among those on the other side of the table for his creative solutions to union-company disagreements.

Cormack, now 39, says he was also “carrying personal guilt about not doing anything” to improve the plight of the black majority in his country.

So he took the job, the $32,000 pay cut and the small office with bars on the window. These days he drives the company delivery truck home at night, when it’s available.

The job is a lot more difficult than his last one, Cormack says. But what he savors is the opportunity to make decisions about the company’s future jointly with his employees.

“It’s really humbling and quite satisfying,” he said. “I now see the value of human beings who I used to just look past.”

At Zenzeleni, worker representatives participate in all major disciplinary and business decisions. The senior shop steward must co-sign Cormack’s checks. And even the music piped over the loudspeakers is chosen by the workers.

“This is a nice place to work because it’s our factory. We own it,” said Makhosi Zulu, a 35-year-old mother of two who was sewing necks on an order of T-shirts, sans slogans, for a department store.

But, Zulu added, the $50 she is paid for a 42-hour week--the factory average--”is not a living wage.”

What to pay people at Zenzeleni was a sensitive issue for the union owners. Although the union supports the Congress of South African Trade Unions campaign for higher wages, it cannot pay Zenzeleni workers more without angering union members at other factories.

So Zenzeleni tries to make up for that in other ways.

No one disciplines factory workers here for being absent from work, for example, as they do at other factories. (Workers absent without a doctor’s certificate forfeit that day’s pay at all factories.)

“We just accept that they had a good reason,” Cormack said. And the absentee rate at Zenzeleni is less than 1%, compared to a 6% industry average.

Although it still produces some political T-shirts, Zenzeleni is moving out of that volatile market.

Cormack recently signed a contract with Anglo-American Corp. to produce 40,000 work outfits a year for gold miners. Each of those garments will carry the legend: “Made for the Worker by the Worker.”

Because the factory is a job creation enterprise, it eschews high-technology machinery that would replace workers.

And while its union owners want Zenzeleni to make a profit and finance more such ventures, they don’t want it to drown the competition and cause more layoffs in the industry.

So far there’s no danger of that, though. The factory, which is operating well below capacity, still needs many more orders to survive, Cormack says.