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Six years ago, LVMH’s billionaire CEO Bernard Arnault and President Donald Trump cut the blue ribbon on a factory in rural Texas that would make designer handbags for Louis Vuitton, one of the worlds best-known luxury brands. But since the high-profile opening, the factory has faced a host of problems limiting production, 11 former Louis Vuitton employees told Reuters. The site has consistently ranked among the worst-performing for Louis Vuitton globally, significantly underperforming other facilities, according to three former Louis Vuitton workers and a senior industry source, who cited internal rankings shared with staff. The plants problemswhich havent previously been reportedhighlight the challenges for LVMH as it attempts to build its production footprint in the U.S. to avoid Trumps threatened tariffs on European-made goods. The ramp-up was harder than we thought it would be, thats true, Ludovic Pauchard, Louis Vuittons industrial director, said in an interview on Friday in response to detailed questions about Reuters findings. The Texas site, situated on a 250-acre ranch, has struggled due to a lack of skilled leather workers able to produce at the brands quality standards, the three former workers told Reuters. It took them years to start making the simple pockets of the Neverfull handbag, one source familiar with operations at the plant said, referring to the classic Louis Vuitton shoulder tote bag. Errors made during the cutting, preparation and assembly process led to the waste of as many as 40% of the leather hides, said one former employee with detailed knowledge of the factorys performance. Industry-wide, typical waste rates for leather goods are generally 20%, a senior industry source said. Several former employees who spoke to Reuters described a high pressure environment. To boost production numbers, supervisors routinely turned a blind eye toward methods to conceal defects, and in some cases encouraged them, four former employees told Reuters. Pauchard acknowledged there had been such cases in the past, but said the issue had been resolved. This dates back to 2018 and one particular manager who isnt part of the company anymore, he said. Poorly crafted handbags deemed unfit for sale are shredded on-site and carted away in trucks for incineration, two of the sources with knowledge of the firms supply chain said. A former production supervisor who often travelled to the site, said Louis Vuitton mostly used the Texas plant for less sophisticated handbag models, producing its most expensive products elsewhere. Pauchard, Louis Vuitton’s industrial director, said the company was being patient with a young factory. Any bag that goes out of it must be a Louis Vuitton bag, we make sure it meets exactly the same quality, he said. I am not aware of any kinds of issues suggesting the quality coming from Texas is any different from that coming from Europe. Made in USA Perched behind a hill, the handbag maker’s two production facilities were built on grounds near grazing cattle and a gas well. Louis Vuitton named the site Rochambeau in tribute to a French general who fought in the Revolutionary War. Workers at the site make components and entire models of Louis Vuitton handbags like Felice pochettes and Metis bagswith “Made in USA” tags inside. The items sell for around $1,500 and $3,000 at high-end boutiques. LVMH declined to comment when asked which handbag models are fully or partially made in Texas but former workers interviewed by Reuters mentioned the Carryall, Keepall, Metis, Felice, and Neverfull handbag lines among the plant’s products. In its marketing material, Louis Vuitton says its handbagstypically made at French, Spanish or Italian leather ateliers by artisans known as “petites mainsare assembled using a process that it has perfected since the mid 19th century. After cutting canvas and leather using hand tools and laser-cutting machines, they stitch pieces together using industrial sewing machines. Workers at the Texas facility, which includes dedicated floors for cutting and for assembly as well as a warehouse, were initially paid $13 per hour. As of 2024, base pay for a leather worker position at the plant was $17 per hour, according to two people who recently applied for positions. The minimum wage in Texas is $7.25 an hour. A former leather worker who arrived as a migrant in the U.S. some years before, said she felt proud when she was hired by the prestigious French brand, but said some workers struggled to meet the brands quality standards and production targets. “We were under a lot of pressure to make the daily goals,” said the former worker, who left the factory at the end of 2019. Another person who worked at the facility until 2023 said she cut corners, like using a hot pin to melt canvas and leather to conceal imperfections in a particularly difficult piece called the Vendome Opera Bag. Another former leather worker said theyd seen people melt material to hide holes or other imperfections in stitching. Damien Verbrigghe, Louis Vuittons international manufacturing director, conceded some at the Texas plant had chosen to change jobs or leave because of its stringent quality requirements. There are artisans that we hire, who we train and who, after several weeks, or months, realize in light of the expectations, the level of detail that is required, they would rather work in other fields like logistics, he said. Some people chose to leave us, because its true that its a job that requires a lot of savoir faire. Three former workers at the plant said they received between two and five weeks of training. A current Louis Vuitton employee in France said receiving just a few weeks of training wasn’t unusual as most learning happens on the production line supervised by more experienced craftspeople. “Knowledge of sewing on leather/canvas is a plus, but not required. We offer comprehensive training, the company said in a job posting for artisan positions in Alvarado published on its website in January. Verbrigghe said training in Texas is exactly the same program that we have in all our workshops, that is, six weeks on the training line, where new artisans do nothing but learn basic operations and skills before going on to train on the assembly line. There, he said, they are accompanied and continuously mentored by trainers. Tax breaks LVMH got a host of tax breaks and incentives from Johnson County, including a 10-year, 75% property tax cut, promising the company an estimated $29 million in savings. We look forward to serving this exceptional company, wrote the countys top executive, Roger Harmon, in 2017 correspondence seen by Reuters. In its 2017 application letter for the tax abatement, obtained by Reuters through records request, LVMH said it was aiming to hire 500 people within the first five years of the plan. At the ribbon-cutting ceremony in 2019, Arnault said, We will create approximately 1,000 high-skilled jobs here at Rochambeau over the next five years. Three former staffers, however, said headcount stood at just under 300 workers in February 2025, a figure Verbrigghe confirmed. The White House did not respond to a Reuters request for comment. Pauchard said initial recruitment difficulties wre largely due to the COVID-19 pandemic and the lockdown that followed, adding that a decline in local demand also played a role. Despite the problems, LVMH is planning to move even more jobs to Texas. LVMH said in its 2017 filing that its first Texas production facility would cost around $30 million. A second filing from 2022 to local authorities put the cost of its second workshop, completed last year, at $23.5 million. At a town hall last fall, workers at one of two California production sites were told that it would close 2028 and they could move to Texas or quit, according to a former employee who was present. Pauchard confirmed the town hall and said Louis Vuitton intended to streamline its California operations and transfer more skilled artisans to Texaswith so far limited success. Its executives, he said, underestimated the fact that Texas is far away from California. Tassilo Hummel and Waylon Cunningham, Reuters
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E-Commerce
As the Trump administration intensifies efforts to acquire Greenland from Denmarkor take it by forcesome Silicon Valley tech investors are promoting the frozen island as a site for a so-called freedom city, a libertarian utopia with minimal corporate regulation, three people familiar with the matter told Reuters. The discussions are in early stages, but the idea has been taken seriously by Trump’s pick for Denmark ambassador, Ken Howery, who is expected to be confirmed by Congress in the coming months and lead Greenland-acquisition negotiations, the people said. Howery, whose involvement with the idea hasn’t been previously reported, once co-founded a venture-capital firm with tech billionaire Peter Thiel, a leading advocate for such low-regulation cities. Howery is also a longtime friend of Elon Musk, a top Trump adviser. Howery declined to comment. The White House did not respond to requests for comment. Sources who spoke to Reuters requested anonymity to discuss private conversations. The vision for Greenland, one of the people said, could include a hub for artificial intelligence, autonomous vehicles, space launches, micro nuclear reactors and high-speed rail. The discussions reflect a longstanding Silicon Valley movement to establish low-regulation cities globally, including in the United States, which Trump himself promised to do in a 2023 campaign video. Proponents use different names for variations on the idea, including startup cities or charter cities, with the common goal of spurring innovation through sweeping regulatory exemptions. The administrations consideration of such a quixotic quest underscores the growing clout of tech magnates and Trumps increasingly expansionist foreign policy. After campaigning on a largely isolationist platform, Trump has since his November election suggested taking back the Panama Canal, annexing Canada and redeveloping the war-torn Gaza Strip after seizing the beachfront land from displaced Palestinians. Greenland is about three times the size of Texas with a population of only 57,000. But the island is strategically important to the U.S. military, which has a base there, and contains substantial deposits of minerals, including rare-earths. Trump has refused to rule out taking Greenland by military force if Denmark wont sell it. We have to have Greenland, Trump said late last month as his Vice President, J.D. Vance, visited a U.S. military base on the island. Vance toured Greenland with his wife Usha Vance, a visit that ignited protests from Greenlanders, who overwhelmingly oppose becoming part of America, polls show. The island is owned by Denmark but governs itself. Greenland’s new prime minister, Jens-Frederik Nielsen, said the U.S. visit signalled a “lack of respect.” Speaking to troops at the U.S. military base, Vance accused Denmark of failing to protect Greenland from very aggressive incursions from Russia, and from China and other nations, without detailing the alleged aggression. The government of Denmark declined to comment on the idea of U.S. tech investors founding a city there. Greenland didn’t respond. NEW MANIFEST DESTINY The freedom-city movement reflects a fascination with settling new American frontiers, rooted in nostalgia for the nations 1800s western expansion. Expanding to Greenland can be the dawn of a new Manifest Destiny, said tech investor Shervin Pishevar, referring to the 19th-century philosophy that America was an exceptional nation with a God-given mission to conquer territory. Thiel, a libertarian and early Trump supporter, wrote in 2009 that he no longer considered democracy compatible with freedom and has advocated escaping politics by colonizing outer space or seasteadingbuilding communities in ungoverned oceans. Fellow venture capitalist Marc Andreessen, an informal adviser to Musks Department of Government Efficiency (DOGE), is part of a tech-investor consortium seeking to build a city on grazing land outside San Francisco. Another venture capitalist and informal DOGE adviser, Joe Lonsdale, also promotes low-regulation cities. In a statement to Reuters, Lonsdale celebrated expanding our country to Greenland but did not comment on plans for a city there. Thiel and Andreessen, leading proponents and financiers of the startup-city movement, are among those supportive of a Greenland outpost, two of the sources said. Reuters could not determine whether the two billionaires are actively lobbying the Trump administration for a Greenland city. Andreessen declined to comment. Thiel spokesman Jeremiah Hall said: Peter isnt involved in any plans or discussions regarding Greenland.” Musk did not respond to comment requests. Thiel has invested along with Andreessen and Pishevar in Pronomos Capital, a venture-capital firm that has launched a half dozen charter-city projects globally, according to Pronomos founder Patri Friedman, the grandson of famous free-market economist Milton Friedman. Most Pronomos projects are in development and negotiations with various governments, Friedman said, but it has helped finance one existing startup community in Honduras called Próspera. Pronomos also invested in Praxis, a city-building venture that in October announced $525 million in financing for a new city. Praxis’ investors include Lonsdale, a fund launched by OpenAI CEO Sam Altman and his brothers, and Pishevar, who co-founded Hyperloop One, a defunct venture once championed by Musk. Praxis cofounder Dryden Brown told Reuters other companies have approached Praxis about helping to establish a Greenland city. Brown flew to Greenland last year. He advocates for building a city there in part because its harsh environment could provide a test site for colonizing Marsone of Musks highest ambitions. “We must build a prototype of Terminus on Earth before departing for Mars, Brown posted on X in November, using Musks term for a red-planet settlement. I believe Greenland is the place, @elonmusk. Rachael Levy and Alexandra Ulmer, Reuters
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E-Commerce
A new executive order from President Donald Trump that’s part of his effort to invigorate energy production raises the possibility that his Department of Justice will go to court against state climate change laws aimed at slashing planet-warming greenhouse gas pollution from fossil fuels.Trump’s order, signed Tuesday, comes as U.S. electricity demand ramps up to meet the growth of artificial intelligence and cloud computing applications, as well as federal efforts to expand high-tech manufacturing. It also coincides with “climate superfund” legislation gaining traction in various states.Trump has declared a “national energy emergency” and ordered his attorney general to take action against states that may be illegally overreaching their authority in how they regulate energy development.“American energy dominance is threatened when State and local governments seek to regulate energy beyond their constitutional or statutory authorities,” Trump said in the order.He said the attorney general should focus on state laws targeting climate change, a broad order that unmistakably puts liberal states in the crosshairs of Trump’s Department of Justice.Michael Gerrard, director of the Columbia University’s Sabin Center for Climate Change Law, said it would be an “extraordinarily bold move” for the federal government to go to court to try to overturn a state climate law.Gerrard said the quickest path for Trump’s Department of Justice is to try to join ongoing lawsuits where courts are deciding whether states or cities are exceeding their authority by trying to force the fossil fuel industry to pay for the cost of damages from climate change. Democrats say they won’t back down Democratic governors vowed to keep fighting climate change.California Gov. Gavin Newsom accused Trump of “turning back the clock” on the climate and said his state’s efforts to reduce pollution “won’t be derailed by a glorified press release masquerading as an executive order.”New York Gov. Kathy Hochul and New Mexico Gov. Michelle Lujan Grisham, cochairs of the U.S. Climate Alliance, which includes 22 governors, said they “will keep advancing solutions to the climate crisis.” Climate superfund laws are gaining traction Vermont and New York are currently fighting challenges in federal courts to climate superfund laws passed last year. Trump suggested the laws “extort” payments from energy companies and “threaten American energy dominance and our economic and national security.”Both are modeled on the 45-year-old federal superfund law, which taxed petroleum and chemical companies to pay to clean up of sites polluted by toxic waste. In similar fashion, the state climate laws are designed to force major fossil fuel companies to pay into state-based funds based on their past greenhouse gas emissions.Several other Democratic-controlled states, including New Jersey, Massachusetts, Oregon, and California, are considering similar measures.The American Petroleum Institute, which represents the oil and natural gas industries, applauded Trump’s order that it said would “protect American energy from so-called ‘climate superfunds.'”“Directing the Department of Justice to address this state overreach will help restore the rule of law and ensure activist-driven campaigns do not stand in the way of ensuring the nation has access to an affordable and reliable energy supply,” it said. Court battles are already ongoing The American Petroleum Institute, along with the U.S. Chamber of Commerce, filed the lawsuit against Vermont. The lawsuit against New York was filed by West Virginia, along with several coal, gas and oil interests and 21 other mostly Republican-led states, including Texas, Ohio, and Georgia.Make Polluters Pay, a coalition of consumer and anti-fossil fuel groups, vowed to fight Trump’s order and accused fossil fuel billionaires of convincing Trump to launch an assault on states.The order, it said, demonstrates the “corporate capture of government” and “weaponizes the Justice Department against states that dare to make polluters pay for climate damage.”Separately, the Department of Justice could join lawsuits in defense of fossil fuel industries being sued, Gerrard said.Those lawsuits include ones filed by Honolulu, Hawaii, and dozens of cities and states seeking billions of dollars in damages from things like wildfires, rising sea levels and severe storms.In the last three months, the U.S. Supreme Court has declined to get involved in a couple climate-themed lawsuits.One was brought by oil and gas companies asking it to block Honolulu’s lawsuit. Another was brought by Alabama and Republican attorneys general in 18 other states aimed at blocking lawsuits against the oil and gas industry from Democratic-led states, including California, Connecticut, Minnesota, New Jersey, and Rhode Island. Trump’s order set off talk in state Capitols around the U.S. That includes Pennsylvania, where the governor is contesting a court challenge to a regulation that would make it the first major fossil fuel-producing state to force power plant owners pay for greenhouse gas emissions.John Quigley, a former Pennsylvania environmental protection secretary and a senior fellow at the University of Pennsylvania’s Kleinman Center for Energy Policy, wondered if the Department of Justice would begin challenging all sorts of state water and air pollution laws.“This kind of an order knows no bounds,” Quigley said. “It’s hard to say where this could end up.” Associated Press reporter Sophie Austin in Sacramento, California, contributed to this report. Follow Marc Levy on X at: https://x.com/timelywriter Marc Levy, Associated Press
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E-Commerce
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