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UPDATE ON NIKE: March 16, 1998

1) Special action packet now available for April 18 international Nike mobilization
2) A first!!! Nike backs out of offer in Ottawa after storm of protest
3) Sales crashing. Nike lays off workers.

1) PACKET READY FOR NIKE MOBILIZATION

The second International Nike Mobilization takes place on and around April 18. For this event, Campaign for Labor Rights has joined forces with a coalition organizing opposition to trade bills such as the Free Trade Area of the Americas and other aspect of the corporate "free trade" agenda. We have prepared a special packet just for the Days of Action. It includes several very informative fact sheets, sample press releases, a flier master for promoting your events and a two-sided leaflet master for use at events - and more! We are asking recipients to donate $5.00 toward printing and postage costs. Information on where to send money is in the cover letter. Payment is strictly voluntary. Cost should not be a barrier to receiving this packet. We are eager for all organizers of local events for April 18 to have the packet. This packet is in HARD COPY ONLY - SEND YOUR POSTAL ADDRESS. To receive the packet, call (541) 344-5410 or send an email to [email protected] Please let us know about your plans for April 18.

2) NIKE BACKS OUT IN OTTAWA

Nike spends multi-millions on marketing thinly veiled as charity. Increasingly, local citizens are questioning whether they want their local government and school systems to receive what they consider to be blood money from a corporation synonymous with sweatshop abuses. Until now, Nike has never withdrawn any of its offered "donations" in the face of criticism. Its actions in Ottawa represent a sea change for the company - and for the international movement seeking justice for Nike's production workers. The change of strategy by Nike probably represents two key factors: the rising storm of protest of the company's labor practices and Nike's increasing financial problems (see item #3 in this alert). [The following report is based on information provided by Aaron Freeman of Ottawa, Ontario: [email protected] All facts and quotations are from his account of the proceedings.] Nike had proposed a sponsorship deal with the City of Ottawa to build a $50,000 rubberized gym floor for a local community center. After a public hearing on March 11 which lasted until at least !:45 AM, the deal was off. Nike announced that it would instead build a floor for the Ottawa Boys and Girls Club in another part of the city. Ottawa passed a policy last year stating that all its sponsorship arrangements "will reflect its recognition of, belief in, and commitment to human rights and each person's right to be treated with fairness, respect and dignity." Last week, Councillor Richard Cannings revealed that the City's Community and Social Services Committee was considering the Nike sponsorship. Referring to the sponsorship deal as "blood money," Cannings argued that, given Nike's treatment of workers abroad, the deal breached the City's human rights policy. "In a way I'm happy [Nike rescinded the Ottawa offer] because it was dirty money," said Carl Hetu, of the Montreal-based Development & Peace, which conducted a time-limited two-year campaign seeking to pressure Nike into improving its human rights practices.

Some at the public hearing criticized Nike's abrupt pull-out so quickly after the company's labor practices were raised. Councillor Diane Deans was "appalled" by what she termed "a pre-emptive strike" by the company. "Nike is sending a strong message saying 'How dare you question our company.'" Duff Conacher, Coordinator of the Ottawa-based corporate accountability watchdog Democracy Watch, agreed, suggesting that the company's move was "aneffort to pit the Councillors against the kids" in an attempt to divert attention from the human rights issue.

Karen Howard represents the ward where the gym floor was to be built. When Mike Desautels, a presenter at the meeting from the Canadian Labour Congress raised criticisms about Nike such as the lack of systematic monitoring and enforcement of the company's code of conduct, she asked him dismissively, "Who do you care more about, workers in Asia or children in our community?" "It's not an answerable question," he responded, characterizing her question as asking, "Who do you care more about, your children or your neighbour's children?"

3) NIKE TO CUT JOBS AS SALES SLIP IN ASIA, U.S.

Reuters/Washington Post Monday, March 16, 1998 BEAVERTON, Ore. March 15—Nike Inc., the world's biggest sports shoe manufacturer, said today it would cut about 450 jobs from its U.S. work force and carry out layoffs at overseas plants.

The layoffs are partly attributable to the financial crisis in Asia, where demand for Nike products has dropped sharply in recent months. The company, which has been facing declining U.S. demand, will cut about 250 jobs at its Oregon headquarters and 200 jobs in other parts of the country, spokesman Lee Weinstein said.

Nike, which last month said third-quarter earnings would fall below Wall Street expectations, will make further unspecified job cuts outside the United States. The layoffs were related to a third-quarter charge and further details would be released Wednesday, along with the company's quarterly earnings report.

The Asian financial crisis has cut into Nike's profit and battered its stock while an inventory glut has prompted the company to slash retail prices worldwide.

Last month Nike said it was experiencing higher-than-expected order cancellations in the Asia-Pacific region and that aggressive pricing of close-out inventories, particularly in Japan, had hurt revenue and gross profit margins.

In the United States, higher levels of close-out sales have continued to reduce profit margins. In December, Nike said orders for goods to be delivered through April had dropped 1 percent because of the Asian slowdown. The company said at the time that the region's crisis would hurt sales this year.