Nike pulls out of colleges

May 26, 2000

Nike has withdrawn millions of dollars of financial support, free athletic equipment, advertising and other benefits from any US university demanding higher pay and living standards for overseas workers who produce the brand's footwear and clothing.

The sports and fitness company refused to renew an agreement with the University of Michigan, but it is extending the contract long enough to provide Michigan with uniforms for next year.

It also parted company with Brown University after being asked to add human-rights provisions to its contract.

Nike's billionaire chairman has also said he would no longer contribute financially to his alma mater, the University of Oregon, because it had joined the Workers Rights Consortium.

Nike chairman Phil Knight said: "Ask University of Oregon president Dave Frohnmayer one question: will he sign a pledge that all contractors and sub-contractors of the University of Oregon as well as the university itself meet the WRC's living-wage provision? No university, including the University of Oregon, can meet the WRC living wage and other code standards for food service employees, groundskeepers, clerical personnel or teaching assistants."

Mr Knight said the consortium unfairly excludes representatives from industry. It was mainly a tool of labour unions that he said "misguidedly" hoped to bring manufacturing jobs back to the United States.

Nike has also said it is already making dramatic improvements in factories that manufacture its products and complained that the universities had singled out Nike over other suppliers because of the publicity value.

Nike has ended talks with the University of Michigan to renew a contract under which the company provided sporting goods, advertising and other benefits.

The company said Michigan, which is a member of the Workers Rights Consortium, had made unreasonable demands far beyond the bounds of typical arrangements between private industry and universities.

The company also cancelled its contract to supply equipment to the Brown University men's and women's hockey teams after the university demanded that it add a human-rights pledge.

The universities' positions, often pressed on them by student activists, have proven far more costly than they probably anticipated. Mr Knight has given $50 million to the University of Oregon and had been expected to contribute $30 million more towards the $80 million renovation and expansion of its athletic stadium. The project is now likely to be postponed, officials said.

At the University of Michigan, the cancelled deal with Nike would have been worth an estimated $26 million, the largest single athletic sponsorship deal in the US. The athletics director said that the workers' rights issue had turned out to be "one hell of an expensive stand".

Nike has equipment agreements with more than 100 other universities and colleges. Its actions at Oregon, Michigan and Brown caused some of the rest to consider backing away from the Workers Rights Consortium.

The associate chancellor of the University of Illinois said clothing producers such as Nike should be represented on the organisation's board. At Oregon, Mr Frohnmayer promised a year-long review of the university's membership in the WRC.

Nike has said it is already doing much to safeguard the workers around the world who produce its goods - raising minimum age requirements to 18, increasing wages and providing loans and education to employees.

"This is not about Nike having something to hide," said Kit Morris, director of college sports marketing. "We are committed to improving the work experience for all 500,000 people who make our products in the US and abroad, and being open in the process."

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