It wasn’t that long ago that Nike was being shamed in
public for its labor practices to the point where it badly tarnished the
company’s image and hurt sales.
The recent factory collapse in Bangladesh was a
reminder that even though Nike managed to turn around its image, large parts of
the industry still haven’t changed much at all.
Nike was an early target for the very reason it’s
been so successful. Its business model was based on outsourcing its
manufacturing, using the money it saved on aggressive marketing campaigns.
Nike has managed to turn its
image around. Nike hasn’t been completely successful in bringing factories into
line, but there’s no denying that the company has executed one of the greatest
image turnarounds in recent decades.
Here’s the timeline of how Nike became a global
symbol of abusive labor practices, then managed to turn things around:
After prices rose and labor organized in Korea and
Taiwan, Nike begins to urge contractors to move to Indonesia, China, and
Vietnam.
1991: Problems start in 1991 when activist Jeff
Ballinger publishes a report documenting low wages and poor working conditions
in Indonesia.
Nike first formally responds to complaints with a
factory code of conduct.
1992: Ballinger publishes an exposé of Nike. His Harper’s
article highlights an Indonesian worker who worked for a Nike subcontractor for
14 cents an hour, less than Indonesia’s minimum wage, and documented other
abuses.
1992-1993: Protests at the Barcelona Olympics in
1992, CBS’ 1993 interview of Nike factory workers, and Ballinger’s NGO “Press
For Change” provokes a wave of mainstream media attention.
1996: Kathy Lee Gifford’s clothing line is shown to
be made by children in poor labor conditions. Her teary apology and activism
makes it a national issue.
1996: Nike establishes a department tasked with
working to improve the lives of factory laborers.
1997: Efforts at promotion become occasions for
public outrage. The company expands its “Niketown” retail stores, only to see
increasing protests. Sports media begin challenging spokespeople like Michael
Jordan.
Abuses continue to emerge, like a report that
alleging that a Vietnamese sub-contractor ran women outside until they
collapsed for failing to wear regulation shoes.
Nike tasks diplomat and activist Andrew Young with
examining its labor practices abroad. His report is criticized for being soft
on Nike. Critics object to the fact that he didn’t address low wages, used Nike
interpreters to translate, and was accompanied by Nike officials on factory
visits. Since Young’s report was largely favorable, Nike is quick to publicize
it, which increases backlash.
1997: College students around the country began
protesting the company.
1998: Nike faces weak demand and unrelenting
criticism. It has to lay off workers, and begins to realize it needs to change.
The real shift begins with a May 1998 speech by
then-CEO Phil Knight. “The Nike product has become synonymous with slave wages,
forced overtime, and arbitrary abuse,” Knight said. “I truly believe the
American consumer doesn’t want to buy products made under abusive conditions.”
At that speech, he announces Nike will raise the
minimum age of workers; significantly increase monitoring; and will adapt U.S.
OSHA clean air standards in all factories.
1999: Nike begins creating the Fair Labor
Association, a non-profit group that combines companies, and human rights and
labor representatives to establish independent monitoring and a code of
conduct, including a minimum age and a 60-hour work week, and pushes other
brands to join.
2002-2004: The company performs some 600 factory
audits between 2002 and 2004, including repeat visits to problematic factories.
2004: Human rights activists acknowledge that
increased monitoring efforts at least deal with some of the worst problems,
like locked factory doors and unsafe chemicals, but issues still remain.
2005: Nike becomes the first in its industry to
publish a complete list of the factories it contracts with.
2005: Nike publishes a detailed 108-page report
revealing conditions and pay in its factories and acknowledging widespread
issues, particularly in its south Asian factories.
2005-Present: The company continues to post its
commitments, standards, and audit data as part of its corporate social
responsibility reports.
Nike wasn’t the only or worst
company to use sweatshops. But it was the one everybody knew.
Transparency doesn’t change ongoing reports of
abuses, still-low wages, or tragedies like the one in Bangladesh.
But by becoming a leader
instead of denying every allegation, Nike has mostly managed to put the most
difficult chapter in it’s history behind it and other companies who outsource
could stand to learn a few things from Nike’s turnaround.
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