Nike: Most Reviled Company

For many of America's Fortune 500 CEOs, Oct. 16 was big business as usual.Bill Gates was working on a proposal to invest $1 billion in cable giant TCI.Intel's Andrew Grove was on the phone with competitor Digital Equipment Corp., discussing an $800 million settlement with the Boston semiconductor company.MCI's Bill Roberts was scrutinizing a $30 billion offer from GTE chairman Charles Lee.In Beaverton, however, Nike chief Phil Knight was tending to his company's bad reputation. Knight was logged on to Nike's internal chat room, SwooshNet, fielding questions from employees across the globe about the company's labor practices in Asia. He was trying to fortify company morale in the face of the next round of allegations, which came on Oct. 18.That Saturday, dubbed Anti-Nike Day, protesters demonstrated in 13 countries, 25 states and 50 communities across the United States. In downtown Portland, 75 demonstrators picketed Nike Town. In Manhattan -- at the Nike complex on 57th and Madison Avenue -- radio personality and activist Jim Hightower introduced a new word into the English language: Swooshtika."Nike is the perfect corporate villain for these times," Hightower said, "an example of the new global corporate hegemony."Wait a minute. What about the days when the bad guys were napalm and weapon-producing cogs in the Military Industrial Complex, like Dow Chemical and General Electric? What happened to baby killers like Nestle or environmental outlaws like Exxon?Why is Nike, a sneaker company that promotes health and fitness, the "perfect corporate villain"?"For an accumulation of reasons," says Harvard Business School professor Joe Badaracco, "Nike has been asking for this."Most Portlanders are familiar with the charges against Nike's overseas contractors: failing to pay livable wages, forcing factory employees to work illegal overtime hours, hiring child labor, inflicting corporal punishment.What readers may not know is that the charges have sparked an anti-Nike movement that is taking on historic dimensions."Nike has been singled out in a way that others have not," says Aaron Cramer of Business for Social Responsibility, a San Francisco firm that advises companies on social issues. "I don't know that another company has been the focus of such targeted efforts. You'd have to go back 20 or 25 years to Nestle, they are the only one I can think of, and they were accused of killing babies." (A consumer boycott of Nestle in the late '70s forced that company to stop marketing baby formula in Third World nations after women became dependent on the milk substitute but couldn't afford to continue using it.)All over the country, knocking Nike has gone mainstream.At Florida State University, in Tallahassee, the most famous student protest movement until this year involved drunken demands from frat boys that the administration build a statue honoring the late rock singer Jim Morrison."FSU is like the University of Michigan without the academics," says Ed Dandrow, former president of the student senate. "People drink and watch football [the team is ranked third in the nation] and drink some more."This year, an agitprop protest group called Coalition for a Corporate Free Campus descended on FSU, which was voted the "No. 1 Party School" in America last year by the Princeton Review.On Oct. 25, at the FSU-Georgia Tech football game, student protesters entered the president's box to hand him an anti-Nike flyer. At halftime, the activists paraded banners along the top aisle of the 80,000-seat football stadium, reading, "No Nike at FSU!"The activists are demanding that the administration cancel the FSU athletic program's five-year, $3.5 million contract with Nike. The school, they say, shouldn't be doing business with a company that is exploiting Third World workers.The FSU dissidents are among several student groups across the country, including "Nike Workers Before Nike Profits" at Penn State University, "Students Against Sweat Shops" at Duke and the "Nike Awareness Campaign" at the University of North Carolina, Michael Jordan's alma mater. The group at UNC, as reported by the Associated Presslast week, forced a meeting with legendary basketball coach Dean Smith, who is under contract with the Swoosh.It's not just those wacky college kids.Doonsebury cartoonist Garry Trudeau has been satirizing Nike for months.New York Times columnist Bob Herbert has written several tirades against Nike. "The systematic denial of worker rights," Herbert wrote in June, "is precisely what companies like Nike are seeking when they set up shop in countries like Indonesia, China and Vietnam." With the exception of the Gap, Herbert says, he can't recall using his column to criticize any other corporations.Major media have jumped aboard the bandwagon. As CBS news cameras panned over Ho Chi Minh City late last year, a grim voice narrated, "The signs are everywhere of an American invasion in search of cheap labor. This is Nike Town."Even the U.S. Congress is weighing in. Two weeks ago, a letter signed by 41 members of the House showed up on Phil Knight's desk."We are ... embarrassed that a company like Nike, headquartered in the United States, could be so directly involved in the ruthless exploitation of hundreds of thousands of desperate Third World workers," the letter states. "It is not acceptable to us."Rep. Bernie Sanders of Vermont, who co-wrote the Knight letter, told Willamette Week that it is "rare" for him to send a letter to the CEO of an American company.The same week that the letter to Knight began circulating in Congress, novelist Alice Walker and a coalition of women's organizations including NOW, the Ms. Foundation and the Feminist Majority held a press conference a few blocks away from the Capitol, denouncing Nike's treatment of female workers in Asia. The press conference was packed with news cameras and generated stories by The New York Times, National Public Radio and Reuters news service.Nike's status as the favorite corporate bull's-eye is puzzling. Especially considering, in the corporate community, Nike is hardly the worst company on the block.In the summer of 1996, a factory worker in Haiti told a visiting Long Island Newsday reporter, "Working in this factory is like disguised unemployment because you don't see your money. You end up paying back [the] food vendors and interest on loans you need to survive. It's like you spill your blood for nothing."Another worker at the same factory said, "I bring home so little money for so much work, I am so depressed at times I want to die."The company that contracts with the factory has also been charged with forcing young Vietnamese girls to work 10 hours a day for less than 20 cents an hour; paying young workers in Indonesia less than the minimum wage; and paying Chinese employees such pitiful wages that 16 workers must share a room in order to afford the rent.Ready to set up a picket line at Nike Town?Try Disneyland.For several years Disney has been targeted by the New York City-based National Labor Committee. But the campaign hasn't received much attention in the mainstream media, hasn't stirred public opinion and certainly hasn't found its way onto the editorial pages of Florida State University's campus paper.Disney's treatment of overseas workers has been spotlighted in the pages of Multinational Monitor, a little-known magazine founded by consumer crusader Ralph Nader. Every year, the Monitor lists the 10 worst corporations. In December 1996, Disney was joined by the following:* Archer Daniels Midland. The Federal Trade Commission found the huge agribusiness company guilty of bilking American consumers out of hundreds of millions of dollars. The Illinois-based giant was fined a record $100 million by the feds in 1996 for fixing artificially high prices between 1992 and '95 on a range of additives that affect the soft drink, livestock, processed food, detergent, pharmaceutical and cosmetic markets. To make matters worse, a huge amount of ADM's business is subsidized by U.S. taxpayers.* Caterpillar. The heavy-equipment manufacturer has drawn a record 300 unfair-labor-practice charges in the company's continuing dispute with the United Auto Workers. Meanwhile, the Occupational Safety and Health Administration fined Caterpillar in 1996 for alleged safety violations involved in the death of a 36-year-old employee.* Mitsubishi. The Japanese conglomerate invests millions of dollars in the military dictatorship in Burma, which is accused of enforcing slave labor.* Daiwa. The Osaka, Japan-based financial institution, one of the largest consumer banks in the world, was barred from doing business in the United States after federal regulators fined it $340 million for stealing from customers' securities investments.* Freeport. The U.S. mining company is accused of dumping poisonous metal tailings into the rivers of Indonesia.* Daishowa. This Japanese multinational was listed for clear-cutting Canadian forests.* Gerber. The baby-food manufacturer is accused of doing exactly what Nestle did 20 years ago in Africa: marketing breast-milk substitute to Third World countries.* Seagrams. In June 1996, the liquor company broke the 48-year voluntary industry ban on broadcasting advertising of hard alcohol.* Texaco. In August 1996, former Texaco executive Richard Lundwall released tapes that exposed Texaco top management as racist.Nike is nowhere to be found on the Multinational Monitor's list. The magazine's editors haven't decided whether the shoe company will show up next time around.Multinational Monitor aside, none of these companies is feeling the heat like Nike is. Even The New York Times' Herbert acknowledges that Nike may be unfairly singled out. "Nike is not the only offender," the columnist told Willamette Week. "And I'm not even contending that they're the worst offender."A Nike marketing director who asked to remain anonymous says she's been at footwear focus groups -- sitting behind a one-way glass partition -- and heard high-school boys describe Nike as a "big, huge company that owns everybody and is everywhere."Such comments help explain why tossing tomatoes at the Swoosh has become so fashionable: The anti-Nike backlash is not just about the company's labor record. It's also a reaction to the global reach of the Nike brand, the wall-to-wall ubiquity of its corporate moniker. (The company spends an estimated $1 billion on advertising annually and was named "Marketer of the Year" last year by Advertising Age.)Specifically, Nike has pushed the limits of commercialism. It's one thing to tie up half the NBA with endorsement contracts, but it's quite another to penetrate high schools."Nike has certainly been a leading perpetrator in bringing corporate imagery into places where it's never been before," says Newsweek senior business reporter Jolie Solomon. "Where do you draw the line? I haven't seen any line being drawn."UNC junior and anti-Nike coordinator Marion Traub-Werner (the woman who got Dean Smith's attention last week) says that although her anti-Nike campaign was originally about workers' rights, the campaign has become "twofold.""Obviously," she says, "there's the labor issue. But we're also concerned about Nike's intrusion into our campus culture."In July, Nike renewed its contract to outfit the school's athletic teams for $7.1 million.Traub-Werner says her campaign to focus attention on Nike's labor practices in Asia has caught on at UNC because it touched a deeper nerve about resentment of Nike's commercialism."The Swoosh is everywhere," she says. "In addition to all the uniforms, it's on the game schedules, it's on all the posters and it dominates the clothing section in the campus store.""I get sympathy from students who wouldn't otherwise be interested in Third World workers," Traub-Werner concludes."For young people," says Mark Crispin Miller, professor of media studies at Johns Hopkins University, "it makes perfect sense to target Nike. It offers a way to make an issue out of commercial culture."Adam Black, a 20-year-old anti-Nike crusader at Penn State University, has caught onto the sentiment."Every Penn State athlete has Swooshes all over," Black says. "It's the Nike uniform. It's on the coach's outfit, hats, T-shirts, sweat pants. Everywhere there's a Nittany Lion, there's a Swoosh. The university has sold its soul to Nike."Is there a Nike section in the campus store?"Yeah," he says cynically, "it's called the clothing department."It's not just Nike's aggressive commercialism that makes the company such a susceptible target. It's also the unique tone of the company's marketing.Many large companies use image advertising to associate their product with larger themes. A recent Mazda campaign, for example, used pagan symbols and devil imagery to promote its car to Gen-Xers as mysterious and cool. But few companies have been able to connect their products with an entire value system the way Nike has.According to Alice Cuneo, a senior editor with Advertising Age who covers Nike's ad agency, Wieden & Kennedy, Nike's advertising makes the company seem "holier than thou."Cuneo says the recent "If You Let Me Play" ad campaign about little girls promotes feminism.She also cites Nike's Tiger Woods ads as promoting civil rights. (The TV ads -- accompanied by a Swoosh -- claim that some golf courses still exclude blacks.)Another example of this sort of advertising is Nike's series of "Peace" TV commercials, in which pro athletes preach against inner-city violence."This is cause marketing," says Oakland, Calif., media critic Makani Themba.But Nike has a different approach than most companies, says Kate Fitzgerald, a reporter at Advertising Age. "Companies generally prop up their social-cause images by donating money directly to causes," she says, pointing to the Ronald McDonald House as an example.With the exception of MCI's ad campaign to promote voter turnout in 1992, however, Fitzgerald couldn't think of another major company that had tied a value system directly to its product. "You can't compare anyone to Nike," she said. "Nike has its own way of communicating 'cause' image advertising."The problem, as Advertising Age's Jeff Jensen puts it, is that "Nike has put itself in a position to be bashed.""If you put yourself in that holier-than-thou role, you're asking for it," Jensen says. "People want to put you in your place whether you deserve it or not.""You have to be careful of pontificating," Cuneo warns. "And some people would say that Nike is pontificating."You have to be particularly careful when it appears you don't practice what you preach."Nike sees themselves as saintly," says Hightower. "They run those ads with preachy slogans and sports stars. They set themselves up as righteous with Tiger Woods against racist America. Well, they shouldn't be surprised that people are angry about their treatment of women in Asia.""One thing big advertisers and big companies have always wanted to avoid," says Johns Hopkins professor Miller, "is a contrast between appearance and reality. Now, you don't need to be sophisticated to understand that the discrepancy between Nike's feminist pitch and the way it treats the women in its factories is explosive.""I think people feel uneasy about the repackaging of social justice images as commercials from the start," says Themba, "but they're not sure why. Then you hear these charges and you're ready to pounce on Nike as hypocritical."Nike is aware that it has come under harsh scrutiny.But the company discounts the attention, claiming it's the result of strategic maneuvers by so-called anti-free-trade activists. Nike says the activists are trying to get press by attacking a high-profile company."The basic question," says Nike spokesman Vada Manager, "is, 'Would you care about this if it was Converse?' You can't draw attention to your cause unless you target a company like Nike."It's true that activists are thinking strategically about Nike. Manager, however, is missing the bigger picture.Deservedly or not, Nike has become nothing less than the poster child of corporate villainy. And judging from the venom and persistence of the bashing, it's clear that critics are peeved about something more than the specific charges of labor exploitation in Asia. Ultimately, the charges, serious as they are in their own right, have tapped into a more complex resentment of the Beaverton company -- ironically, based on its successful marketing.In a sense, Americans were waiting to pounce on Nike. The charges of labor abuses have given them an excuse.Sidebar One"It's fashionable on campus," says Harvard business professor Joe Badaracco, "to be anti-Nike."There's no evidence to show that Nike's sales have been affected by the consumer backlash. "It will be interesting to see what shows up in the sales numbers in a year and a half," says Advertising Age reporter Jeff Jensen.New York Times anti-Nike crusader Bob Herbert, who is black, told Willamette Week, "I wrote about Nike because I happen to think they exploit their inner-city customers in the USA.Ê I see some serious hypocrisy there."Portland's Nike Town has become a favorite protest site."The funny thing is that Nike is surprised about the criticisms," Newsweek's senior business reporter, Jolie Solomon, says. "When you ask the public to be wrapped up in your image, you have to expect the public to have opinions."When civil rights activist Andrew Young gave Nike a clean bill of health, the decidedly conservative, pro-global economy New Republic said: "The world's largest sneaker company did what it does best: it purchased Êa celebrity endorsement."America's worst corporate villain may be hospital chain Columbia HCA, which defrauded Medicare, cut staff to dangerously low levels and turned away dying patients. "I committed felonies every day," a former Columbia manager told The Wall Street Journal.Nike sponsors 10 NBA teams, eight NFL teams and 25 university athletic departments. Spokesmen would not say how many high-school programs the company sponsors.Sports Marketing News editor John Horansays Nike has definitely "overexposed itself in the market." He says Nike is moving to ease the problem by marketing sub brands, sans Swoosh -- for example, Michael Jordan's and Tiger Woods' own brands.


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