NIKfaqECONDev

I copied this file from Nike Inc. web site. The file is dated Friday, June 19, 1998 5:38:15 PM and was last modified Saturday, February 14, 1998 3:08:42 PM - D. Boje NIKfaqECONDev

Q. "How do NIKE subcontractors promote economic

development?"

Light manufacturing (starting usually with a flannel

short factory and then a T-shirt factory and finally a

jeans factory), leads to moderately technical light

manufacturing (outerwear and performance sportswear,

sports shoes), and then to light technical consumer

products manufacturing (radio's, calculators,

wristwatches), and finally to technical durables

(automobiles, computers). Sometimes these occur in

tandem (Korea), sometimes in sequence (Taiwan), and

sometimes the country graduates without the final

stages and heads directly into the post-industrial

service economy (Singapore, Hong Kong).

NIKE has been and continues to be a driver of the

first two steps. It is doubtful that any other light

manufactured brand is responsible for a comparable

record of jobs creation NIKE has built over the past

25 years. At present there are nearly 500,000+ jobs

directly engaged in manufacturing our products; to

date Korea alone has exported well over 500 million

pairs of NIKE shoes; to date NIKE accounts, after just

two years, for 5% of all of Vietnam's export earnings.

These are undisputed facts that demonstrate the

economic good this company creates when it works with

partners around Asia and around the world.

"Don’t you just move your production from country to

country, searching for the cheapest labor?"

For years, critics have tried to contend that NIKE

fled "high-cost, unionized" Korea and Taiwan for

"low-cost, repressive" Vietnam, China and Indonesia.

Over those years, NIKE has repeatedly pointed out that

we remain in Korea and Taiwan as a buyer, despite

higher wages and labor rights. NIKE is in fact the

only branded athletic footwear company still making

shoes in Taiwan and South Korea.

In the last three years we have expanded our footwear

sourcing country list to include three countries:

Vietnam, Italy and the Philippines. Two of the three,

Italy and the Philippines, are vibrant democracies.

The third, Vietnam, has a recent record of promoting

workers rights through government labor bureaus.

Incidentally, Italy has the highest wage base of any

NIKE footwear sourcing country, and the Philippines

has a minimum wage that is twice that of Indonesia,

and three times that of China and Vietnam.

"Why doesn’t NIKE contribute more to communities where

they sell their products?"

NIKE is actively involved in communities worldwide,

from getting kids to play sports and supporting

mentoring programs to building sport courts in

under-served areas and training volunteer coaches.

In 1994 NIKE launched P.L.A.Y. (Participate in the

Lives of All Youth) to provide kids access to

inspirational coaches, organized activities and safe

places to play.

NIKE has made a $5 million commitment to the Boys &

Girls Club of America to train 40,000 volunteer

coaches, triple girls participation in Club activities

and increase overall youth participation in Boys &

Girls Clubs by two million kids.

In the Asia-Pacific region, NIKE is beginning a

micro-loan program for women workers in Vietnam to

help economic development in areas where factories

make NIKE products and to empower Vietnamese women.

Each year, NIKE recycles over two million athletic

shoes into sport courts such as basketball, tennis and

playground surfaces for under-served neighborhoods.

We’ve built over 50 courts worldwide, 30 in the United

States alone.

"Does free trade promote human rights?"

Absolutely. Taiwan and Korea are prime examples, and

NIKE has been working in those countries for more than

two decades. Indeed, though some would say the

development of those rights has taken place quite

apart from our participation in business, in fact the

creation of jobs and the promotion of a climate where

workers are treated with dignity and respect in the

factories cannot help but have a positive impact on

values in the community at large.

The classic issue here is the glass half-empty or half

full perspective. Does NIKE by its presence foster

higher levels of respect for rights -- at least in the

factories? Or does our presence foster repression in

countries where governments do not recognize some of

the rights we in western democracies hold dear? NIKE

firmly believes -- and the record supports -- the

concept that our presence helps.