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Nike CEO: 'I can' change
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May 12, 1998: 5:22 p.m. ET
Sneaker maker's Knight unveils new plan amid criticism of labor practices
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NEW YORK (CNNfn) - Amid widespread criticism of its child labor practices, Nike Inc. Tuesday said it would raise the minimum ages for workers in its Asian plants and improve factory working conditions.
"The thing that I'm going to focus on today is essentially the cloud that has been over Nike's head over the last couple years," Nike Chief Executive Phil Knight said during a speech at the National Press Club in Washington.
Knight, who has been characterized as "corporate crook" and "corporate villain," certainly has his share of critics. Nike has been the focus of negative publicity from Walt Disney Co.'s ESPN Sports Network to renegade filmmaker Michael Moore -- which recently lashed out at Knight and Nike's labor practices in his new feature-length movie, "The Big One."
"I think it's a partial victory," Moore told CNNfn during a telephone interview.
"I'm happy that he's taken the steps that I, and others, have pushed for. The biggest change is for them to say they will employ no one under the age of 18. I've been pushing for that for over a year now, so I'm very happy that he's come this far, this fast. I honestly didn't think that five weeks after the movie came out they would do this."
Still Knight refused to return manufacturing to the United States. Nike hasn't made shoes in America since 1984.
Quoting Nike's own research, he contended U.S. manufacturing would increase the cost of a pair of sneakers by $100 apiece unless tariffs were imposed.
Nike now will increase outside monitoring of its plants, increase the minimum age of its shoe factory workers to 18 and the minimum age of apparel manufacturing workers to 16.
The Beaverton, Ore.-based company said the new standards will not affect current workers. The national minimum age requirement in Indonesia is 14.
"At 18, the worker is generally more mature, has more work experience, is easier to train in health and safety issues, and therefore better suited to work in a footwear factory," he said. "Nike has zero tolerance for underage labor."
Nike also will apply abroad U.S. standards for indoor air quality and boost educational programs for its workers. The company has also expand its loan programs in Vietnam for workers' families in Indonesia, Thailand and Pakistan.
"We are committed to improving working conditions for the 500,000 people who make our products," Knight said
Nike has seen its image tarnished by repeated criticism from human rights groups and others -- including the popular "Doonesbury" comic strip -- that the company takes advantage of its workers in developing countries by paying them low wages under poor working conditions.
"It is simply unconscionable for a huge company like Nike to go to Third World countries -- about 97 percent of their workers are in poor, Third World countries, many of them are women -- and ruthlessly exploit these people, paying them 15 or 20 cents an hour," Rep. Bernie Sanders, an Independent congressman from Vermont, said.
In March, Nike, whose products are worn by some of the world's top athletes, including basketball's Michael Jordan, track and field's Michael Johnson and golf's Tiger Woods, reported a 69 percent drop in third-quarter earnings, reflecting troubles in the Asia-Pacific region and an oversupply in America.
Knight said the controversy surrounding its Asian factories has had not a material adverse financial impact on the company.
As for the abusive labor issue, Knight said it appeared to him to be more based on anecdotes than anything else.
"Essentially any kind of anecdotes or stories are a little hard to check out and prove," he said. "I think you have a lot of misinformation and a lot of misunderstanding.
"We don't have abusive labor conditions in our factories and really never have," he added.
-- from staff and wire reports
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