Nike Not Fazed By Mounting Criticism

Despite the hostility, Nike executives remain confident the company is as popular as ever, and say profits have not been hurt by the wave of protests, including a series of demonstrations by labour rights groups last Saturday.

"Our business is still up by about 42 percent last year, and our business projections are good for this year," says Nike spokesman Vada Manager. But he admits that "from a long-term, brand-name standpoint," the company is concerned that what he calls "misrepresentations of (Nike) practices" could hurt its corporate image -- and therefore sales -- down the line.

'Doonesbury,' the popular U.S. newspaper cartoon strip drawn by Garry Trudeau, has been mocking Nike sponsorship of college football teams by showing athletes deciding to play naked rather than wear the logo of a company which exploits workers. In one strip, a football player evaded being tackled after he took off all the Nike-marked clothing that had served as his uniform -- prompting an onlooker to comment that he was "doing well by doing good."

Similarly, film maker Michael Moore, in his 1996 book 'Downsize This!' lists Nike Chief Executive Officer Phil Knight as one of the top "corporate criminals" for paying substandard wages to workers in Indonesia, China and Vietnam, where 80 percent of the company's shoes are assembled. Now Moore intends to make a humourous film satirising Nike's corporate record in the United States and abroad.

Despite such public criticism, Ballinger admits that so far, Nike hasn't felt the pinch from criticism of its record. "Their main target, 11-to-16-year-olds, are not really affected by articles in The New York Times or in television newscasts," he concedes. Still, he adds, the growing debate about Nike sponsorship of college football teams, and the perception in that debate that "Nike money is tainted," is helping to keep the pressure on the firm.

"This will not affect their sales so much as their prestige," Ballinger says of the negative information broadcast by demonstrators.

Certainly the bottom line for Nike, which reported 1996 revenues of 6.5 billion dollars and profits of more than 550 million dollars, remains high. But the company has had to go to increasing lengths to keep its corporate image afloat following accusations that it pays as much for one celebrity sponsor, basketball star

Michael Jordan, as it does for all the mainly young and female workforce in Indonesia who make its shoes.

The 120,000 workers who assemble shoes for Nike subcontractors in Indonesia have also seen their wages crumble following the recent collapse of the Indonesian currency, the rupiah. Their pay, Ballinger explains, is pegged to Indonesia's minimum wage, which was worth some $2.50 a day prior to the rupiah's collapse during Asia's recent currency-speculation woes.

Now, he adds, the minimum wage is worth only $1.70 a day. That amount is too low in a country where, according to some experts who have analysed the price of an average basket of goods, the average worker would need to earn four dollars a day to survive, Ballinger argues.

That is an argument Nike does not accept. Knight has argued that Nike is capable of raising developing nations' economies by providing work, even if it does so at initially low wages. "Whether you like Nike or don't like Nike, good corporations are the ones that lead these countries out of poverty," Knight said in an invterview last year. "We watched it happen all over again in Taiwan and (South) Korea, and now it's going on in Southeast Asia."

"We are really providing good, decent wages," Manager argues. "We have provided some 500,000 jobs (worldwide)," he says, and adds that recent surveys by former U.S. diplomat and Atlanta mayor Andrew Young and by a research team from Dartmouth University gave Nike high marks for its wages and working conditions in Indonesia.

The surveys and claims of high wages have been derided as public relations ploys by critics, however. The New Republic, delivered a lengthy critique of Young's methodology, saying that the former U.N. ambassador relied on Nike interpreters for his interviews and failed to talk to legitimate union representatives during his visit to the Indonesia factories.

Young's report, says Ballinger, was "almost a perfect example" of the need for independent monitoring of overseas factories, completely separate from company-paid efforts, since it resulted in "a docile, very shallow walk-around of a few factories." Ballinger says that, notwithstanding the studies by Dartmouth and by Young's GoodWorks International teams, "we need a good study by Oxfam, Doctors Without Borders," or similarly independent rights group.

Nike defends the validity of the outside studies of its performance, Manager counters, calling Young an "unimpeachable" monitor following his lengthy civil-rights and diplomatic work. "We knew that Ambassador Young would do a credible job in looking at the factory and that he would not hold his tongue" if he saw poor conditions or abuses, he says of Young's largely laudatory report.