Amid big doubts by business, small successes

It's generally not a crime to run a rival out of business or take someone else's job.

But when the winners are government-supported convicts, it sure seems criminal to Jim Hodo.

Mr. Hodo is vice president of American Apparel Inc., a Selma, Ala.-based maker of military uniforms. The company last year closed a plant in Brantley, Ala., laying off 150 workers. This year it might have to shutter its Selma plant and fire another 350 employees, says Hodo.

American Apparel is shrinking, he says, because Federal Prison Industries (FPI), the government manager of inmate labor, is expanding its production of military uniforms.

"FPI could put us out of business completely," says Hodo.

American Apparel is not alone.

Indeed, US business is one of the most outspoken foes of enlarging behind-bars enterprises. From Michigan auto-parts makers to Texas construction contractors, businesses are trying to keep more jobs and revenues out of prison.

Unions are cool to prison industry, noting they require strict oversight. Moreover, opponents say that, if prison industry had to pay a competitive market wage, they would not turn a profit.

So prison industries squeeze taxpayers in more than one way, requiring them to subsidize prison workshops and pay for government aid to laid-off, law-abiding workers, critics say.

Yet apparently not all prison factories are money holes. Virginia Correctional Enterprises (VCE), which manages inmates in private-sector contracts, says it has yielded profits up to 18 percent.

There's also evidence private prison industry can work despite claims by some experts that low productivity and high turnover hinder profit.

A contract between VCE and Ariens Company of Brillion, Wis. to manufacture barbecue grills proved "marginally profitable," says Daniel Ariens, company president. The quality was good, he says, and "if we can train these people to become good solid citizens and good employees, that's great."