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NIKE LAYOFFS HIT 480 IN ASIA; VIETNAM FACTORIES PROFILED
Published March 23, 1998
Nike said Friday that it will cut 480 jobs in Asia, accounting for about 30% of its global reductions, according to Didi Tatlow of the AP. Nike spokesperson Martha Benson said that Asia's economic troubles have "hurt sales" in the region. Benson: "The cost of a shoe suddenly grows quite significant when your currency drops in half." Nike's 22,000 person global work force will be cut by 7%, accounting for $30M-$45M of an estimated $175M in restructuring costs. Benson did not give details as to where the Asian job cuts would occur (AP, 3/21). An OREGONIAN editorial Friday addressed Nike's Asian layoffs: "[M]aybe there's one bright side to this story. Maybe now the U.S. labor activists who have made such a stink about the 'exploitative' manufacturing jobs in Nike's Asian subcontractors will lay off for a bit" (OREGONIAN, 3/20). OR, THEN AGAIN, MAYBE THEY WON'T: In its "occasional series on chasing cheap sweatshop labor," the PHILADELPHIA INQUIRER examines Nike's contracting out to Vietnamese factories under the header, "Vietnam Gives Nike A Run For Its Money." In a front-page piece, Jennifer Lin writes that Nike's foray into Vietnam "has been anything but business as usual for Nike in its constant global search for cheap labor." Although the company "found the eager, low-wage workforce it covets, it did not bargain on such a rude welcome from this Communist nation, where more than lip service is paid to workers' rights. Nor did it anticipate hostile local press coverage in a nation with no free press." For Nike, one out of every ten pairs of its shoes now comes from Vietnamese subcontractors, and Lin writes that CEO Phil Knight will have to convince critics that "$1.84 a day is a fair wage for Vietnamese workers" (PHILADELPHIA INQUIRER, 3/23). In a related piece, PA State Rep. Robert Belfanti has proposed a resolution that would "force" Penn State Univ. to sever its ties with Nike because of the company's "reported mistreatment of Asian workers." Penn State recently extended its original deal which was signed in '94 worth $2.6M over three years (INQUIRER, 3/23).