[cover letter] Dear Nike campaign activist, We are happy to be sending our special action packet to help you in organizing an event in your community for the October 17 Nike Mobilization. Please take a few minutes to read through this cover letter, which explains the rationale for making the focus of this mobilization the demand that Nike pay its workers a living wage for a regular work week. This is an important time to maintain the pressure on Nike. The company has just announced that its first quarter profits declined by 35 percent and it is laying off another 300 of its direct employees. This follows a layoff of 1600 in the spring. These numbers, of course, don't begin to tell the story. In addition to its "real" employees, Nike had a half million production workers, mostly in its Asian shoe factories. Untold thousands of these sweatshop workers are now bearing the brunt of Nike's downturn, especially in Indonesia. A year and a half ago, many or most of Nike's Indonesian workers were making the minimum wage in their country - the equivalent of $2.46 cents a day. Due to the currency crash, the workers who have not been laid off are now making the equivalent of less than 75 cents a day, or less than 10 cents an hour. Before the currency crisis, it already was hard enough for Nike workers to try to live on $2.46 a day. The Nike factories are in urban areas. Prices for basics such as food and shelter run much higher than in rural parts of Indonesia. Previously, Nike shoe workers had to work outrageous hours of overtime, often putting in more than 12 hours a day. As hard as those hours were, Nike workers counted on their overtime pay, in order to eke out a living. With the crisis in Asia and with the downturn in Nike's own fortunes, the workers have been hit with a triple whammy: * Tens of thousands have been laid off. * Those who are still working have found their base rate of earnings devalued to the equivalent of less than 75 cents a day. * With production drastically reduced, there is little or no need to put workers on overtime. Saying that Nike's earnings are down does not mean that the company is not making a profit - just less of a profit. Some of that profit is coming from the backs of Nike workers in Indonesia. Because of the currency devaluation in Asia, Nike now has to pay less in U.S. dollars to buy the same amount of labor power. Nike's Indonesian workers receive less than 75 cents a day. Nike pockets the difference. Why did this downturn occur? Is Nike the victim of circumstances? No, in a very real sense, Nike helped bring on these troubles: THE ASIAN ECONOMIC CRISIS: When the economies of much of Asia crashed, Nike lost an essential part of its global market. Prior to the crash, Nike was claiming credit for the success of the so-called "miracle economies" of Indonesia, South Korea, Taiwan and Japan. The miracles, it turned out, were phonies. Uncontrolled speculative investment, unregulated banking systems, corrupt and repressive governments, sweatshop economies - all of these had made parts of Asia a paradise for greedy companies like Nike. And now Nike workers are paying the price for the kind of global economy that Nike and its friends promoted. CHANGES IN FASHION: Industry analysts make much of the consumer trend away from sneakers and into brown hiking boots. Suddenly, where everyone had to be seen in Nikes, sneakers no longer are as cool. Fashion is built on images and Nike was a champion of imagery. Consumers were manipulated into believing that paying $140 for a checkmark on their shoes would buy them women's empowerment, victory in athletics, fame and wealth. But even the best-told lies wear thin. And now buying overpriced shoes and clothing just to be a walking Swoosh billboard looks kind of stupid. SWEATSHOP ABUSES: In growing numbers, consumers are disgusted with Nike. Every six months or so, the company comes out with some bold new initiative to straighten out its labor practices and, meanwhile, Nike shoe workers slide deeper and deeper into poverty, now making less than 10 cents an hour. A few years ago, the American Pork Council paid for a TV ad campaign featuring the slogan, "Pork: the clean food!" - a slogan guaranteed to make you nervous about dirt and disease. So it is each time Philip Knight, CEO of Nike, schedules a new press conference. In May of last year, a woman named Cicih Sukaesih toured the United States and Canada, speaking about Nike sweatshop practices. She had worked at a Nike factory in Indonesia until she and 22 others were fired for taking part in a brief walk-out to protest being cheated out of the minimum wage. [Nike has never lifted a finger on behalf of those fired workers.] At every stop, someone in the audience would ask, "I believe what you say about Nike, but how can you hope to win against such a huge company?" No one asks that question anymore. With stunning dispatch, the arrogant Nike has fallen low. We in the movement to end sweatshop abuses cannot operate like the fashion industry, changing campaigns with each season as if these campaigns were merely models of clothing. Behind the changes of fashion are the very real people who make that clothing and who assemble those shoes. The Nike campaign already has lasted years and could drag on for several more years. Because we have staying power, the international Nike campaign has made its presence felt with this multi-billion dollar company. Justice for Nike production workers will not come easily. Those workers are counting on local activists like you to maintain and strengthen this effort, which already is the highest profile anti-sweatshop effort in the world. In this Nike Mobilization (the third we have organized in the space of a year and a half), the rallying cry is: A LIVING WAGE BASED ON A NORMAL WORK WEEK! The Asian economic crisis makes this theme especially timely. The demand that Nike pay a living wage always has been central to this campaign. Now more than ever, when the real wages of Nike workers actually are falling, we need to give this issue new emphasis. The Nike campaign has been joined by an important new ally. In July, a Living Wage Summit brought together many organizations involved in garment and shoe sweatshop issues, as well as representatives of labor organizations from several other countries. The gathering in San Francisco selected Nike as the first focus of its efforts to win a living wage in the global apparel industry. With this infusion of new energy, we move forward into the third Nike Mobilization...and beyond. As during the previous Nike mobilization, we are asking local activists to focus on Foot Locker outlets where that choice meets your organizing needs. An article reprinted in this packet shows how the fortunes of Foot Locker are declining with those of Nike. If it is impossible or impractical to try to leaflet at a Foot Locker store, then any other store selling Nike products in your community would make an appropriate site. In this, as in all of the national action days which we promote, if the suggested date does not work for your organization or your community, then feel free to pick some other date in the same general time frame. We will of course count your event as part of the mobilization. Please let us know ahead of time as you are planning your event and then please send a brief report after the event to us at <[EMAIL PROTECTED] or (541) 344-5410. Thank you for your work in organizing an event in your community as part of this mobilization. It is local activists like you who make this campaign live. In solidarity, Trim Bissell, national coordinator Campaign for Labor Rights <><><> [two recent media stories about Nike] Nike rejects proposal to link executive pay to factory wages By William Mccall, Associated Press Writer (September 23, 1998) - Nike shareholders have rejected a proposal to tie executive compensation more closely to the wages that are paid at the company's contract factories in Asia. Chairman Phil Knight, who made $1.7 million in salary alone last year, promised more improvements and independent monitoring of conditions at its Asian factories, where some workers make $20 month. "I think what is happening is that Nike has been made the poster boy of the global economy," Knight told shareholders at the company's annual meeting in Memphis, Tenn., on Wednesday. Earlier at the meeting, a shareholder today asked Nike to boost its wages in Asia to improve the shoe giant's image and maintain its stock value. "Across the United States these days there are a lot of children who are not looking on Nike in a favorable fashion," John Harrington, a California investment manager, said at the shareholder's meeting. Harrington introduced the proposal on behalf of Jeanne Henry, a Portland, Ore., shareholder, who last year told Knight that her 12-year-old daughter was boycotting the company because of its labor practices at contractor factories in southeast Asia. Nike has been repeatedly criticized for the low wages and working conditions in its Asian factories, which the company has taken steps to improve. Harrington said that Knight earned 5,273 times the annual pay of the average worker in Nike shoe factories last year. Average executive pay in Japan is about 16 times the average worker's, and in Germany it's about 21 times as large, he said. Harrington cited a survey that indicated the survival wage in Indonesia for a single female workers is $35 per month. The average Nike worker is paid 80 cents a day, or $20 per month. The shareholder proposal calls for Nike to more closely link executive pay to financial performance. It notes that the company already links pay to performance, and that Nike has constantly improved labor practices. <><><> The Oregonian newspaper (published in Portland, Oregon) Friday, September 18 1998 Asian slump pummels Nike By Jeff Manning of the Oregonian staff Nike Inc.'s season of discontent continued through the summer, with the company's first quarter earnings falling 35 percent and global sales declining more than 9 percent. The company's prospects are particularly bleak in recession-torn Asia. Nike announced that it will eliminate another 300 positions from its Asia Pacific operation. The company laid off about 1,600 permanent and temporary employees in the spring. The grim numbers add ammunition to critics' arguments that Nike is overexposed, tired and destined to fade from dominance. Yet, Nike officials and Wall Street analysts agree there are rea sons for optimism. Thanks to stringent cost control, the company made more money than expected. Nike earned $163.3 million, or 56 cents a share in the quarter ended Aug. 31, a far cry from the $253.1 million, 85 cents a share, it earned in the same period last year. Still, it beat the consensus of 43 cents a share forecast by bearish analysts. The company also reported significant progress on eliminating a glut of surplus sneakers. Nike's close-out footwear in the United States has declined more than 17 percent since May 31 to 1.3 million pairs, said Bob Harold, interim chief financial officer. The company considers U.S. sneaker inventory of 1 million pairs satisfactory. At the low point, Nike was swimming in more than 3 million pairs of close-out shoes. "There are signs of life," said Margaret Mager, an analyst with Goldman Sachs in New York. "The building blocks are falling into place. The, first block is inventory." Because the massive oversupply problem seems to be easing, Nike officials reported that they've scaled back plans to build still more outlet stores. Instead of 12 new stores the company intends to erect five. There are concerns that via its prolonged fire sale, Nike has simply shifted the inventory problem from its own books to that of its retail customers. The unprecedented discounting of new products by important retailers such as Foot Locker and The Finish Line this--summer seems to back that up. Nike executives admitted some concern about the retail environment, particularly the health of the largest retailer, Foot Locker, and its parent company, Venator. "Venator, with their various formats, has good long-term plans," Nike President Tom Clarke said. "But this quarter was tough. The discounting of new goods is certainly not in their best interests in the long term." There are also concerns aplenty on the sales front. Apparel, which accounts for about a third of Nike's sales, is showing definite slowing. Apparel close-outs are increasing, which will pinch profit margins in coming months, Harold said. Nike reported futures orders (for product to be delivered from September to January 1999) of $3.2 billion, compared to $3.9 billion in the same period a year ago. U.S. futures declined 7 percent, Europe is down 1 percent, Asia-Pacific plummeted 56 percent, and Nike's Americas region, Latin America and Canada, declined 9 percent. Nike executives said they see little chance of any near-term improvement in Asia. "There's not a lot of daylight in the Asian economic crisis," said Phil Knight, Nike chairman and chief executive officer. Even here, though, Nike and analysts see a silver lining. Although futures through January are down, the scale of the decline seems to be steadily growing smaller. In other words, the trend line looks positive. "The futures were definitely at the low end of Wall Street's expectations," said Faye Landes, an analyst with Salomon Smith Barney in New York. "But they do show some improvement over the course of the period." Clarke once again voiced optimism that a strong spring 1999 product line will get the company back into the growth mode. Knight, too, said that there are encouraging trends. Nike's co-founder laughed off one query about the fate of his Swoosh tattoo in light of recent false reports that Nike is scrapping its Swoosh logo. "The Swoosh stays on my ankle," he said defiantly. "It'll be there when they bury me." --
