NIKE - Just Do It The renowned worldwide sportswear brand, Nike, was founded in 1964 by Philip Knight
NIKE – Just Do It
The renowned worldwide sportswear brand, Nike, was founded in 1964 by Philip Knight. The company was established with the idea of importing running shoes from Japan. The sole aim of the business was to compete with German brands such as Adidas and Puma. Japanese shoes were cheaper because labour in those days were cheaper in Japan. Initially, the Nike production began in Japan even though the Head Office is situated in the United States. It is in the Nike World Campus at Beaverton, Oregon where all product design is carried out. By 1977, Nike production had extended to South Korea and Taiwan. Once again it was the cheap labour that attracted Nike. However Nike did not own its own production plants, instead it contracted it out to local companies. The production handover to Taiwanese investors in the 1980s saw Nike move into mainland China. The reason being, once again, the cheap labour. In the late 1980s, Nike moved south to Thailand and Indonesia. In February 2001, the Mexican production plant at the Kukdong factory was attacked by riot police after protests over the sacking of five workers who had campaigned for higher wages. Currently, in Vietnam, Nike training shoes are made by employees who are paid US$10 for working 65 hours a week. The movement of Nike production from Japan, Taiwan and Korea towards other LEDCs (Less Economically Developed Countries) was solely due to the cheaper operation costs. Furthermore, Japan, Korea and Taiwan are far more developed countries and of more power and equality than in the past therefore the opportunities of exploiting for Nike are far less in scale than in the current LEDCs which Nike operates. However, Nike may have also moved as of to keep up with the growing production demand. The LEDCs offer very efficient and economic production and thus may have attracted Nike’s production operations.
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The Nike training shoes ‘Air Pegasus’ costs US$70 to the consumer. It costs $20 for Nike to produce a pair of these trainers. This includes all costs involved, including payment to the trainer producer who makes a profit of $1.75. Nike sells the pair of trainers to the retailer at a cost of $35.50 and makes a profit of $6.25. The retailer sells it to the consumer at a price of $70 and makes a profit of $9. In conclusion, it is the retailer who makes the most profit from a pair of Nike ‘Air Pegasus’ training shoes.
Nike’s production of training shoes in the LEDCs has been attacked by numerous organisations that campaign for human rights. The main agenda has always been the working conditions of the employees – which have been described as shocking. In Indonesia, many workers are paid low wages, as little as $1 a day. Another heavily criticised sector of Nike is about child labour. Extracts from an interview with a child aged 15 years old at the Nike factory in Kukdong, Mexico throws light into many unknown factors which undergo at Nike production plants. The child mentions that he/she works 10 hours a day and makes 352 pesos a week (approximately 50 pence an hour). He/she further mentions that even though he/she has not been abused, he/she has seen how aggressively the Korean managers yell at the other workers. The interview also mentions many health and safety hazards such as having to be seated straight all the time without even being allowed to bend down and more atrociously the subject of lunch. The child relates that they are only provided with ‘rancid food’ of which ‘the meat is bad’ and ‘the food… tasteless’. “There are no more than three water fountains (for over 800 workers). Sometimes there is no water in these fountains. If we are thirsty, our mouths get dried up.” This mentions how serious and neglected are the conditions at Nike production plants.
In the contrary, Nike has helped many people by providing a steady stream of work and wages. In the LEDCs the Nike wages are usually considered reasonable even though it may seem appalling in comparison to countries such as the UK and the United States. Nike production plants have helped to eliminate unemployment in a fair amount of local areas in the LEDCs and somewhat reduce poverty and death. Nike also belongs to many organisations which strive to protect rights of workers and improve their lives. Furthermore, Nike has created after-hours free education programmes for workers and has established a scheme with Vietnam Women’s Union to provide money to help rural women start up new businesses. In this view the Nike operations in the LEDCs have been of help and sustenance.
Waves of criticism have pounded Nike since the knowledge that ‘unfair’ working practices have been taking place at Nike production plants. Many organisations have campaigned and protested against Nike in bids to put an end to breaches of Human Rights. A few to mention are the Just Stop It! campaign (which campaigns to persuade Nike to improve their labour practices), the Clean Clothes Campaign (which is an international organisation that strives to improve working conditions in the worldwide garment industry) and the campaign website Just Do It! Boycott Nike. The main objective of many of these campaigns has been either to persuade Nike to stop the unfair working practices or to boycott Nike products altogether so that their message is received.
People who support Nike and Nike itself have lashed out at these anti-Nike campaigns by stating that: “We don’t pay anybody at the factories and we don’t set policy within the factories; it is their business to run”. Nike also says that although the wages maybe low in comparison to the developed countries but they are fair and linked to each country’s cost of living and the people want the jobs. They also say that they are against child labour and sweat-shop conditions and furthermore that working conditions are far worse in most other companies that their own factories. Nike anchors their defence by referring to their Code of Conduct which has high standards and that they have worked with several organisations to improve work environments and lifestyles of employees.