Nike Says Still Committed to Indonesia

JAKARTA ~ Nike will seek to grow its production base in Indonesia despite the shoe giant halting orders from two factories amid quality concerns, a spokeswoman said this week, as workers protested the decision.

The company told the subcontracting factories early this month that it would not be renewing orders after they failed to meet its standards, but would shift the work to other factories within Indonesia, spokeswoman Erin Dobson said.

“We’ve attempted to work with them over the past several years to remedy (the problems) with no success. So in March we cut our production there by 50 percent, to give them the opportunity to improve the quality and performance issues,” she said.

“They were unable to do so, so back at headquarters they determined they would exit those two factories,” she said, as more than 1,000 of the some 14,000 likely to be affected by the decision held a street protest.

“Nike Go to Hell” read one of the posters carried by the demonstrators, while others carried the national flag flown at half mast as speakers demanded through megaphones that Nike reverse its decision, disputing that quality was too low.

A letter submitted by the protestors would be sent back to Nike headquarters for review, she said.

Dobson said US-headquartered Nike has been working in Indonesia for 18 years, including with these two factories, which are both owned by Central Cipta Murdaya.

Nike’s footwear production has increased by about 18 percent since 2004 in Indonesia and “the plan is to continue to grow production here,” she said, noting that a new factory producing Converse shoes and employing some 4,000 workers was due to open here in October.

“So our commitment to Indonesia is strong and we have told the government that our long term goal is to grow our manufacturing sourcing base here and we hope that this in no way impacts on that long term growth,” she said.

Dobson added that this was a “test case for everybody” in terms of workers being laid off.

“It is clear under Indonesian law that the factories are responsible for severance … so the Indonesian government reinforcing that is very important to us,” she said.

More than 115,000 workers are currently employed by contract factories manufacturing Nike products. In 2006, more than 50 million pairs of Nike shoes were made here.

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