Labor Alerts: a service of Campaign for Labor Rights
UPDATE ON NIKE
March 16, 1998
- Special action packet now available for April 18 international
Nike mobilization
- A first!!! Nike backs out of offer in Ottawa after
storm of protest.
- Sales crashing. Nike lays off workers
The second International Nike Mobilization takes place on and around
April 18. For this event, Campaign for Labor Rights has joined forces
with a coalition organizing opposition to trade bills such as the Free
Trade Area of the Americas and other aspect of the corporate "free trade"
agenda. We have prepared a special packet just for the Days of Action.
It includes several very informative fact sheets, sample press releases,
a flier master for promoting your events and a two-sided leaflet master
for use at events - and more!
We are asking recipients to donate $5.00 toward printing and postage
costs. Information on where to send money is in the cover letter. Payment
is strictly voluntary. Cost should not be a barrier to receiving this
packet. We are eager for all organizers of local events for April 18
to have the packet.
This packet is in HARD COPY ONLY - SEND YOUR POSTAL ADDRESS.
To receive the packet, call (202) 232-5002 or send an email to clr@clrlabor.org
Please let us know about your plans for April 18.
Nike spends multi-millions on marketing thinly veiled as charity.
Increasingly, local citizens are questioning whether they want their
local government and school systems to receive what they consider to
be blood money from a corporation synonymous with sweatshop abuses.
Until now, Nike has never withdrawn any of its offered "donations" in
the face of criticism. Its actions in Ottawa represent a sea change
for the company - and for the international movement seeking justice
for Nike's production workers. The change of strategy by Nike probably
represents two key factors: the rising storm of protest of the company's
labor practices and Nike's increasing financial problems (see item #3
in this alert).
[ The following report is based on information provided by Aaron
Freeman of Ottawa, Ontario: freeman@essential.org
All facts and quotations are from his account of the proceedings.
]
Nike had proposed a sponsorship deal with the City of Ottawa to build
a $50,000 rubberized gym floor for a local community center. After a
public hearing on March 11 which lasted until at least !:45 AM, the
deal was off. Nike announced that it would instead build a floor for
the Ottawa Boys and Girls Club in another part of the city.
Ottawa passed a policy last year stating that all its sponsorship
arrangements "will reflect its recognition of, belief in, and commitment
to human rights and each person's right to be treated with fairness,
respect and dignity." Last week, Councillor Richard Cannings revealed
that the City's Community and Social Services Committee was considering
the Nike sponsorship. Referring to the sponsorship deal as "blood money,"
Cannings argued that, given Nike's treatment of workers abroad, the
deal breached the City's human rights policy.
"In a way I'm happy [ Nike rescinded the Ottawa offer ] because
it was dirty money," said Carl Hetu, of the Montreal-based Development
& Peace, which conducted a time-limited two-year campaign seeking to
pressure Nike into improving its human rights practices.
Some at the public hearing criticized Nike's abrupt pull-out so quickly
after the company's labor practices were raised. Councillor Diane Deans
was "appalled" by what she termed "a pre-emptive strike" by the company.
"Nike is sending a strong message saying 'How dare you question our
company.'" Duff Conacher, Coordinator of the Ottawa-based corporate
accountability watchdog Democracy Watch, agreed, suggesting that the
company's move was "an effort to pit the Councillors against the kids"
in an attempt to divert attention from the human rights issue.
Karen Howard represents the ward where the gym floor was to be built.
When Mike Desautels, a presenter at the meeting from the Canadian Labour
Congress raised criticisms about Nike such as the lack of systematic
monitoring and enforcement of the company's code of conduct, she asked
him dismissively, "Who do you care more about, workers in Asia or children
in our community?" "It's not an answerable question," he responded,
characterizing her question as asking, "Who do you care more about,
your children or your neighbour's children?"
Reuters/Washington Post | Monday, March 16, 1998
BEAVERTON, Ore. March 15
Nike Inc., the world's biggest sports shoe manufacturer, said today
it would cut about 450 jobs from its U.S. work force and carry out layoffs
at overseas plants.
The layoffs are partly attributable to the financial crisis in Asia,
where demand for Nike products has dropped sharply in recent months.
The company, which has been facing declining U.S. demand, will cut about
250 jobs at its Oregon headquarters and 200 jobs in other parts of the
country, spokesman Lee Weinstein said.
Nike, which last month said third-quarter earnings would fall below
Wall Street expectations, will make further unspecified job cuts outside
the United States. The layoffs were related to a third-quarter charge
and further details would be released Wednesday, along with the company's
quarterly earnings report.
The Asian financial crisis has cut into Nike's profit and battered
its stock while an inventory glut has prompted the company to slash
retail prices worldwide.
Last month Nike said it was experiencing higher-than-expected order
cancellations in the Asia-Pacific region and that aggressive pricing
of close-out inventories, particularly in Japan, had hurt revenue and
gross profit margins.
In the United States, higher levels of close-out sales have continued
to reduce profit margins. In December, Nike said orders for goods to
be delivered through April had dropped 1 percent because of the Asian
slowdown. The company said at the time that the region's crisis would
hurt sales this year.
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