ACADEMICS STUDYING NIKE & REEBOK - VIETNAM SUBCONTRACT FACTORIES (Nguyen Lap Story).
|Note: Nike does not release location of factory locations in Vietnam.|
the non-disclosed locations of Nike and Reebok
factories. Where are the secret
factories? As soon as we
systematically identify where they are, we can monitor
what they are doing.
NEW We also want to find comparable factories where working conditions are better. For example, What are the condition of factories where New Mexico State University Campus Story buys its garments with our logo on them?
Contact email@example.com at Academics Studying Nike, if you know where they are.
El Salvador, Guatemala
QUICK WAY TO MOVE ABOUT THIS SITE Pull Down Choice and Go
Nov 13 2015
(a couple of years old -- forgotten in my "Drafts" folder- relevant now w/ TTP)
why can (billionaire) Jim Davis do this (keep some mfrg in US & UK)? closely-held biz - not mentioned in article -- jdb
New Balance fights to keep its jobs in U.S.
BYLINE: Peter Whoriskey
SECTION: AAA; Pg. 14
DATELINE: IN NORRIDGEWOCK, MAINE
At the factory here owned by New Balance, the last major athletic shoe brand to manufacture footwear in the United States, even workers on the shop floor recognize that in purely economic terms, the operation doesn't make sense.
The company could make far more money if, like Nike and Adidas, it shifted virtually all of these jobs to low-wage countries.
So employees try working each shift to make it up. Conversations on the shop floor are sparse at best, and the tasks at each work station have been stripped of waste and precisely timed. Workers cut leather for a pair of shoes in 88 seconds, handle precise stitching in 37 seconds and glue soles to uppers even faster.
"The company already could make more money by going overseas, and they know it," said Scott Boulette, 35, a burly team leader who has his son's name tattooed in Gothic letters down his left forearm. "So we hustle."
Now, however, comes what may be an insurmountable challenge.
The Obama administration is negotiating a free-trade agreement with Vietnam and seven other countries, and it is unclear whether the plant can stand up to a flood of shoes from that country, already one of the leading exporters of footwear to the United States.
"We are deeply concerned by the inclusion of Vietnam in a potential free-trade agreement," said Rob DeMartini, president and chief executive of New Balance.
The workers' predicament highlights the difficulty facing the Obama administration as it seeks free-trade agreements as a potential remedy for U.S. unemployment, now at 9.2 percent.
Backed by many economists, the administration says the agreement with Vietnam and the other countries, the Trans-Pacific Partnership, would create U.S. jobs by opening up Asian countries to U.S. exports such as computers from California and paper products from Maine.
"This agreement will create a potential platform for economic integration across the Asia-Pacific region, a means to advance U.S. economic interests with the fastest-growing economies in the world," U.S. Trade Representative Ron Kirk told Congress in late 2009 in announcing that negotiations were about to begin.
Moreover, importing shoes from Vietnam at lower costs would benefit some in the United States, either by reducing prices for consumers or raising profits for manufacturers that have their operations overseas.
But the example of New Balance, which has long resisted the exodus of American footwear manufacturers, highlights the fact that despite the benefits of free trade, it can also destroy some U.S. jobs, and those losses are felt more acutely in a time of high unemployment.
'I'd like to keep my job'
"We want to fight really hard to keep this business in Maine," said Lori Cook, 28, a single mom with two kids. "I'd like to keep my job."
The company's primary concern is that any free-trade agreement with Vietnam would probably eliminate the steep tariff on footwear imported from that country, making Vietnamese sneakers even cheaper than they already are.
New Balance officials said removing the tariff would also undermine years of efforts at the company's five New England factories to compete against cheap foreign labor. The plants employ 1,000 workers.
Those employees earn upward of $10 an hour, plus benefits, while labor costs in China are about $1.50 an hour, and even less in Vietnam.
With the support of some New England legislators, the company is hoping that an unusual exemption can be created in any agreement with Vietnam to maintain the tariff on the shoes New Balance makes in the United States.
"Making footwear in the U.S. isn't as easy or as profitable as making them overseas. If it were, every company would still be doing it," DeMartini said. "We will continue to ask our negotiators to embrace President Obama's manufacturing agenda and to save what is left of our nation's once-vibrant shoemaking economy."
For decades, shoes coming in from China and Vietnam, the largest sources of imported footwear, have been hit with tariffs of as much as 20 percent or more.
The shoe tariff, by pushing up the cost of importing shoes, means a pair of athletic shoes made in the Norridgewock factory or anywhere else in the United States is more competitive than it otherwise would be, and partially offsets the costs of higher wages paid here. On a pair of shoes that comes into the country valued at $30, for example, a typical 20 percent duty amounts to $6. (In many cases, the markup amounts to 100 percent, meaning those shoes would sell to consumers for $72.)
Relics of industrial era
As workers in New England look around at the shuttered textile and shoe mills that still dot many towns, relics of the industrial era, some see the shoe tariff as the least the United States could do for what's left of the battered industry. In their view, removing the tariff only rewards those companies such as Nike and Adidas that have shut U.S. factories and concentrated their operations elsewhere.
Adidas's last plant was in Kutztown, Pa. Joanne Twomey, 65, worked at the Nike factory in Saco, Maine, until it closed in the mid-'80s, the last significant Nike shoe plant in the United States.
"I have not bought one thing from Nike ever since," said Twomey, now the mayor of nearby Biddeford, Maine. "I tell my children and grandchildren not to buy it either. They owed it to the people who got them to the top - the workers in the U.S. - to stay."
About 25 percent of the shoes New Balance sells in North America are either manufactured or assembled at one of the five New England factories, despite the likelihood that owner Jim Davis could improve profits by joining other shoemakers overseas.
But while the tariff may be protecting New Balance's 1, 000 U.S. workers, it appears to have done little to protect the rest of the U.S. shoe industry, which employed as many as 250,000 people in the '50s but fewer than 15,000 people today.
A labor-intensive process
"The production of footwear is still very much a labor-intensive process," said Erin Dobson, Nike spokeswoman. "This, combined with the cost of labor in the U.S., makes it cost-prohibitive based on the way product in our industry is manufactured today."
She noted that while the company has no shoe manufacturing in the United States, it directly employs 22,000 in the country.
Since about 99 percent of shoes sold in the United States are imported, removal of tariffs probably would save consumers money and help improve profits for retailers and companies that do their manufacturing overseas. Those companies have banded together in recent years to lobby against what they call "the shoe tax."
"If you are buying shoes, you're paying a shoe tax," said Nate Herman of the American Apparel and Footwear Association, which has led the fight against the shoe tariff and supports the Trans-Pacific Partnership. "For products that are no longer produced here and haven't been produced here for decades, there's no sense for consumers to be paying it."
The employees at the factory here shrug off the cost to consumers, and question how it is that a move to save jobs could be considered bad economic policy, as economists often say, when jobs are so hard to come by and they have tried so hard to compete.
Since 2004, the 350 workers at the plant have increased daily production by nearly 9 percent while significantly reducing errors, plant manager Raye Wentworth said. The Maine unemployment rate is nearly 8 percent.
Some like Michelle Witham, 40, count three generations involved with footwear manufacturing. She works at the New Balance factory here, as did her parents. Her grandparents worked in the same building, too, years ago, when it was a shoe factory for another company.
"When I started, people would say, 'Oh, you don't want to work there. They're not going to be around for long. They ain't got a chance,' " Witham said. "But I've been here 20-something years now."
"If customers pay a few more dollars for a pair of shoes, then so be it," said Sheri Fuller, 54, who has worked at the factory for 24 years. "If you take jobs away from people, the hit is going to be a lot bigger."
12 strikes in Vietnam in 35 Nike-producing factories since 2006. The implication from Jeff Ballinger: "Larger, longer-term suppliers have WORSE records, according to Locke."
Here is an excerpt from the study"
"Findings help Nike, Inc. to evolve its compliance strategy
Cambridge, Mass. — Global brands are more likely to influence the improvement of working conditions in their suppliers' factories in developing countries by providing technical assistance to suppliers and empowering employees on shop floors. New research by an MIT Sloan School of Management professor found this approach to be more effective than monitoring codes of conduct, which is currently the leading way that global brands and labor rights organizations address poor working conditions.
Richard Locke, the Alvin J. Siteman Professor of Entrepreneurship at MIT Sloan, and his former student Monica Romis, compared working conditions in two Mexican garment factories that supply athletic footwear and apparel giant Nike, Inc. Although they both passed compliance with Nike's code of conduct, only one factory earned high scores in overall employee satisfaction with workplace conditions.
The key difference, according to Locke, is that the factory with the higher satisfaction scores implemented ‘lean manufacturing processes’ — a term referring to manufacturing methods based on maximizing value and minimizing waste in the manufacturing process — that resulted in employees having greater autonomy and power to make day-to-day decisions on the shop floor." Read More
For a copy of “Beyond Corporate Codes of Conduct: Work Organization and Labor Standards in Two Mexican Garment Factories,” please contact the MIT Sloan Office of Media Relations: firstname.lastname@example.org
Nike started its Vietnam operations in 1995.
About 37,000 Vietnamese workers at five shoe factories produced 22 million pairs last year, or about 10 percent to 12 percent of Nike's worldwide shoe production accounted for US$500 million, or 4 percent, of
Vietnam's total exports last year, and its subcontractors constituted the country's largest private employer.Vietnamese factories run by Nike's Taiwanese and South Korean subcontractors employ about 46,000 workers.About 37,000 Vietnamese workers at five shoe factoriesproduced 22 million pairs last year, or about 10 percent to 12 percent of Nike'sworldwide shoe production, Helzer said, adding that another 9,000 Vietnamese workers made Nike garments.
On June 27, 1997 Hsu Jiu Yen, a supervisor at the Pou Chen Vietnam Enterprise Limited factory, which makes sports shoes for Nike, was sentenced to six months' imprisonment for forcing 56 women workers to run a 4 km circuit around the factory in the full heat of the sun for failing to wear regulation footwear. Eight of the women workers lost consciousness and had to be taken to hospital (source).
EXHIBIT A - Ernst & Young 1997 Audit Report released to NY Times - Greenhouse NY Times article (Source, Corporate Watch).
EXHIBIT B - Kahle et al (2000) Sports Marketing Study - This study endorses the Andrew Young study of 1997. They visited the Chanshin factory in Ho Chi Minh City, Vietnam.
EXHIBIT C - "Green Wash Accounting: Ernst & Young Audit of Nike Corporate Plant in Vietnam Prompts Positive Steps from Green Wash to Green Initiatives" by David M. Boje 23 October, 1999, Last Revision Dec. 8, 1999
EXHIBIT D- Ms. Lap Nguyen was forced out of her Nike factory job in Vietnam following her interview with the ESPN program that was televised. She was also interviewed in the 1996 60 Minutes expose on Nike in Vietnam. The point is that being interviewed can have disciplinary results. http://www.web.net/~msn/3nike14.htm (Source NikeWatch Campaign of Australia).
For more information on Lap Nguyen, see:
- Boje, D. M. 1998e How Critical Theory and Critical Pedagogy can Unmask Nike's Labor Practices presented to the Critical Theory pre-conference of the Academy of Management meetings, San Diego, CA, August 8.
- Boje, D. M. 1998f Nike, Greek Goddess of Victory or Cruelty? Women's Stories of Asian Factory Life Journal of Organizational Change Management. Vol. 11(6): 461-480. There is an interesting story behind this one.
Also See Joseph Ha's Letters to Vietnam Officials:
EXHIBIT E - Global Alliance - Does Empirical Research for Multinational Corporations to verify their Working Conditions. The problem his is that the research is not independent of corporate influence. Maria Eitel, Vice President Corporate Responsibility, Nike, Inc., United States is on the Board of Global Alliance.
Jeff Ballinger describes Global Alliance as a PR firm for Nike that ""Public Relations firm responsible for this has also done work for NikeTown, (Michael) Jordan brand, Disney, Hasbro..." (email September 16, 2000). The approach is to conduct focus groups and surveys with workers and managers. The results of the work produce positive reports about working conditions in Nike factories. http://www.theglobalalliance.com/content/about.cfm Global Alliance is part of Nike's "Transparency 101" program.
According to Thuyen Nguyen -- Vietnam Labor Watch, "Basically,
[Global Alliance] provides the empirical research for Nike to backup
Nike's views of the workers at Nike factories. Quite an expensive
venture for some basic research." (email September 16,
September 6, 2000, Wednesday http://www.prnewswire.com/home.shtml
with copy at http://www.theglobalalliance.com/content/press2.cfm
SECTION: INTERNATIONAL NEWS
Reveals First-Ever Look Inside Factories From
A picture of these workers' current concerns and
hopes for the
The Alliance is currently conducting an assessment
in 17 factories representing approximately 60,000
In Vietnam, from October 1999 to May 2000, the
Center for Economic and Social Applications (CESAIS --
now known as Troung Doan) undertook an in-depth
assessment of the needs, assets and future aspirations
of factory workers in seven footwear and apparel
factories in Vietnam for the Global Alliance. During
this period, 2,220 of a total of 40,737 workers were
interviewed. In addition, more than 470 workers
participated in focus group discussions and 14 key
informant interviews were conducted. All told, the
team put in approximately 3,300 hours of research in
the factories. "This is a long-term initiative,
but we have made significant strides toward
establishing a process that can be used in other
countries to let workers speak out about the best way
that factories can enhance their lives," said
Rick R. Little, president and CEO of the International
Brad Ferris, 202-261-2883, for the Global Alliance for Workers and Communities
To: David Boje
Sent: Wednesday, January 03, 2001 11:12 AM
Transcript off-air from the ESPN's Monthly Outside the
Lines 10th Anniversary show which aired in December, 2000.
LEY (voice-over): In February of 1998, OUTSIDE THE LINES visited Vietnam for several weeks investigating labor practices and working conditions in factories where American sneakers were manufactured. Working under the press restrictions of a communist government, we nonetheless encountered a warm people eager to embrace Americans and most anxious for foreign investment.
In the factory that produced Nike and Reebok shoes, we found
questions of environmental dangers and salaries for workers, whose pay was reduced by their employers using outdated currency exchange rates.
In the nearly three years since our visit, much has happened.
Nguyen Thi Lieu was a 22-year-old worker in Reebok's Powyen (Pou Chen?) factory. She lived in an eight-by-twelve-foot room with a tin roof and dirt floor, commuting six days a week by bicycle to her job, where she applied glue.
NGUYEN THI LIEU, FORMER REEBOK FACTORY WORKER (through translator):
We are sick all the time from inhaling the poison from the glue. There are many other workers that suffer from pain in their noses just like me.
LEY: After our report aired, Lieu's contract was terminated by
Reebok. ESPN brought the matter to the attention of Reebok's Massachusetts headquarters, and Lieu was rehired and assigned a better job, one that she liked.
Last spring, Lieu was let go again with 3,000 other workers when their contracts expired so they could be replaced by minimum wage workers, a common practice. In August, we found Lieu had moved to an even smaller rented room and now makes her living selling lottery tickets in a Ho Chi Minh City marketplace.
When OUTSIDE THE LINES met Nguyen Thi Lap, she was a senior worker with an exemplary history at Nike's Samyang plant in Ku Chi (ph). Once we left the country, Lap's life spiraled downhill.
Nike said Lap's poor job performance was to blame. Lap disagreed.
UNIDENTIFIED FEMALE: You said that you were forced to do this after you came back from the interview?
NGUYEN THI LAP, FORMER NIKE FACTORY WORKER (through translator):
When I found the team, I went to the interview. When I went to the interview, the Korean manager kept suggesting to me that as an employee of the company I always had to speak well for the company and say that the company was having difficulty.
LEY: Those so-called problems included the media scrutiny of
overseas labor practices of American shoe companies. Nike Chairman Phil Knight alluded to the negative reports at an address at the National Press Club in Washington, DC.
Knight spoke in May of 1998, one month after our program aired.
PHIL KNIGHT, CEO, NIKE: One columnist said, "Nike represents not only everything that's wrong with sports, but everything that's wrong with the world." So I figured that I'd just come out and let you journalists have a look at the great Satan up close and personal.
LAP (through translator): Let me tell you, I was a section leader overseeing 50 workers. They forced me to quit if I didn't agree to be switched around between menial jobs.
My hands were often swollen up so painful. Because they abused me too much, I brought this to the union to be solved for me.
LEY: Following our visit, Lap was demoted several times. When she fell ill, she says she was denied medical leave, eventually forced to quit her job, and then diagnosed with tuberculosis. Lap is currently unemployed.
As for Nike's view of those who criticize its labor policies, early
in 1999, a senior Nike figure in a letter to Vietnam's top labor official said that Nike believed human rights activists were trying to indirectly overthrow the communist government of Vietnam.
A survey by Washington D.C.'s Global Alliance for Workers and Communities of 3,800 workers in factories run by Nike subcontractors in Vietnam and Thailand found most were satisfied with workplace conditions, although some expressed concern about health and safety problems at the factories, including fatigue and poor ventilation.
|Vietnam - REEBOK - Shoe
Pou Yuen Vietnam Enterprise
National Highway 1, Xa Tan Tao
Binh Chanh, Ho Chi Minh City