Labor Alerts: a service of Campaign for Labor Rights

NIKE CAMPAIGN STRATEGY, PART 1:

Overview of Developments

NOTE: The second international Nike mobilization will take place on Saturday, April 18. This is the first of a series of strategy papers to help local activists prepare for that mobilization. The other strategy papers will be posted, one at a time, during the next few weeks. At the completion of the series, Campaign for Labor Rights will prepare a new Nike action packet, including a new leaflet master. We will make these materials available both in hard copy and electronically.

OVERVIEW:

• The first international Nike mobilization, which took place on October 18, demonstrated that there is a growing global consensus that Nike is guilty of serious, systematic sweatshop abuses. The scope of this protest most certainly got the attention of Nike management, who sent public relations teams racing back and forth across the United States, trying to put out the fires. There were protest events in more than 85 cities in some 13 countries around the world. In the United States, human rights advocates in more than 50 cities in at least 29 states participated in events.
• Campus activism proliferated in response to the October mobilization and it has not gone away since then. The strongest activity has taken place on campuses where the athletic department has multi-million dollar contracts with Nike. These contracts, which are a centerpiece of Nike marketing, have now turned into a public relations nightmare for the company. Nike's aggressive campus marketing has now been forced into a defensive posture.
• Nike sales and stock value are plummeting. At the Nike annual stockholders' meeting in September, CEO Phil Knight announced that the company was severing relations with four of its Indonesian clothing contractors. In the absence of independent monitoring, there was no way to verify the company's claims that these contractors were being dropped because of their failure to comply with the Nike code of conduct. However, subsequent events seem to confirm what most of us suspected at the time: Nike was letting go of contractors due to a downturn in orders. Since September, declining sales (including a 20% drop in the second quarter as compared with last year) have led to several other downsizings. Nike stock value has dropped as much as 48% from its high. Although we are in no position to quantify the reasons behind this freefall, anecdotal reports from retailers strongly suggest that awareness of sweatshop abuses is turning consumers away from Nike.
• The entire brand-name sneaker industry appears to be taking a hit. Certainly, some of this is attributable to the vagaries of fashion. Another variable in the equation is that Nike's in-your-face attitude in dealing with the sweatshop issue has poisoned the entire athletic shoe market. Images of spoiled athletes, dissembling shoe executives and exploited workers have caused overpriced shoes to lose their luster.
• The "Asian miracle" becomes the "Asian contagion." For years, Nike made outrageous claims that its sweatshops had prepared the way for development in Taiwan and South Korea and were poised to do the same for Indonesia, Vietnam and China. As the International Monetary Fund frantically tries to prop up the falling currencies of the region, Nike no longer has anything to gain from linking itself to economic events in Asia. The company has lost an important rationale for its sweatshop practices. Although currency devaluations in Asia will save Nike a bundle in labor costs, the weakness of Asian currencies means that Nike can no longer count on increased Asian markets to offset the slippage in domestic sales.
• Public awareness sharpens. The much-touted Dartmouth report, which Nike hoped would serve as a major vindication, proved to be a non-event. Most people simply ignored it. Others quickly understood that the report was nothing more than a student project emanating from what is arguably the most politically conservative campus in the country. As job anxiety grows in the developed world and as the Asian crisis spreads, the public is increasingly aware that something is rotten in many more places than Denmark. In the United States a year or two ago, only a small activist core thought or talked much about the International Monetary Fund. Now, mainstream media stories raise doubts about this phenomenally important international financial institution. Sweatshop activists have a tremendous opening to educate our base about the issues underlying the sweatshop practices of Nike and other companies.

REASONS FOR HOPE:

NEXT STRATEGY PAPER:

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