Organization Woman

Since 2000, about 240,000 private companies have been started in Vietnam. But the government has decreed that that number should grow to 500,000 by 2010. (Vietnam may have Louis Vuitton and KFC, but it's still run by a socialist regime.) These aggressive plans raise a question: Where does a young (40 percent of the population is under 30) and inexperienced (the free market has been in vogue here for only about 20 years) country find the managers to run these companies?

We met one of Vietnam's cadre of rising executives on the outskirts of Hanoi at a factory of the apparel-manufacturing company Garco 10, a 61-year-old firm in which the government has a 51 percent stake. As we sat through an interview with General Director Nguyen Thi Thanh Hu, I wished New York Times columnist Tom Friedman was joining us—and not just because he could have used his massive pile of air miles to upgrade us all to business class. Rather, Friedman would have enjoyed finding further proof of his The World is Flat thesis. Madame Nguyen's rap is remarkably similar to that of a Fortune 500 executive in Cincinnati.

Vietnam is one of the top 10 garment exporters in the world. And Garco 10 is a significant company: 8,000 employees, 14 factories, annual production of about 12 million pieces (shirts, suits, pants), annual sales of about $85 million. Its customers include J.C. Penney, the Gap, Tommy Hilfiger, Target, Van Heusen, Perry Ellis, Old Navy, Bill Blass. You may be wearing one of their products right now. (I am—each visitor received a button-down cotton shirt.)

As she was interviewed, Madame Nguyen revealed that the U.S. Congress topped her list of pains in the rear. The Vietnamese garment business has been buffeted by the "unreasonable" monitoring regime created at the behest of Sens. Lindsey Graham and Elizabeth Dole that threatens anti-dumping tariffs against Vietnamese-made apparel. Decisions made by the Vietnamese government are wreaking even greater havoc. Although the state owns a majority and has three representatives on the board of directors, it doesn't help. "We have been poured into the lake to swim by ourselves," said Madame Nguyen, who resembles Edna E. Mode from The Incredibles. A new law stipulates that the monthly minimum wage—870,000 dong (about $56) for foreign companies operating in Ho Chi Minh City and Hanoi, and about 450,000 dong ($30) for domestic companies—will rise sharply on Jan. 1, 2008, with the minimum for domestic workers rising 37.7 percent. Madame Nguyen said her employees earn more than that—about $120 to $150 per month—but that mandated increases in labor costs are adding to inflationary pressures. "All our operating costs are growing, from wages to energy," said the 24-year veteran of the garment industry. "There's pressure on the wages we can pay, and pressure to keep profit high, especially when the board of directors meeting is coming soon."

Madame Nguyen also provided (Ben Bernanke, I hope you're reading) a sounding on how damaging the U.S. weak-dollar policy is to the greenback's status as a reserve currency. While Garco 10 derives about 45 percent of its sales from the United States, all its exports are denominated in dollars. Which means the company is getting paid in a debased currency. (You and me both, sister.) "If this situation continues, we might shift to another currency, like the euro," she said.

Of course, one way to insulate yourself from a punk dollar is to increase the proportion of sales denominated in domestic currency. And as Vietnam starts to stand up, an urban consumer class is growing. "The domestic market is increasingly important," she said. About 20 percent of this year's production will be channeled into the 104 Vietnamese outlets that carry the company's wares. How much do these togs cost? She pointed to some sporty striped button-down shirts in a catalog, which retail for about 400,000 to 500,000 dong ($25-$30).