The Nike Story

For the past 25 years, Nike has provided good jobs,
improved labor practices and raised standards of living
wherever we operate.

-- Phil Knight, Nike CEO³⁵

For the fiscal year ending May 31, 1997, Nike had annual revenues of $9.2 billion.³⁶ During that same period, it spent almost $1 billion promoting and advertising its athletic products. Well over 200 of 324 NBA players wore Nike shoes, as did 275 pro football players and 290 Major League Baseball players. All that money, product placement, and hard-earned goodwill were put in jeopardy when Marc Kasky’s headline-grabbing complaint maligned the Nike name.

Any bad news that is fit to print can slay a corporate giant. The folks at Nike knew that, their stockholders knew it, their public relations department knew it, and their lawyers knew it. How should the company respond to the New York Times columns and stories?³⁷ To the 48 Hours exposé aired in October 1996?³⁸ To the 1997 Vietnam Labor Watch report on the distressing conditions in its factories?³⁹ And to all those nasty “gotcha” articles in the USA Today, Los Angeles Times, New York Times, San Francisco Examiner, Chicago Tribune and so many others?⁴⁰ Then there was columnist Bob Herbert, who seemed relentless in his syndicated campaign to “nail” Nike for its labor practices abroad.⁴¹

Nike countered, forcefully and impressively. Among its many PR tactics, Nike tapped the Michael Jordan persona to act as one of its spokespersons.⁴² It joined President Clinton’s task force, the Apparel Industry Partnership, and signed on to its Workplace Code of Conduct to ameliorate substandard conditions in foreign factories.⁴³ It held press conferences by telephone with eighteen college newspaper staffs and sent letters to the presidents and athletic directors of colleges that purchased its products, in order to assure them that Nike was a brand that their sports teams could still wear proudly.⁴⁴ And it hired the revered Andrew Young, civil rights leader and former U.N. ambassador, to investigate working conditions in Nike’s Asian factories.⁴⁵ After visiting some factories, Young issued a report that said in part: “’It is my sincere belief that Nike is doing a good job . . . but [that] Nike can and should do better.’”⁴⁶ Nike ran with the “news,” taking out full-page ads in the nation’s major newspapers.⁴⁷ But Bob Herbert was not satisfied: “Oh brother. The kindest thing that can be said at this point is that Mr. Young was naïve . . . [for he says nothing about] wretchedly low wages, enforced overtime, harsh and sometimes brutal discipline, and corporal punishment.”⁴⁸

As if this were not enough, Marc Kasky, Alan Caplan, and their publicity-grabbing lawsuit were looming. Raising the ante still higher, they vowed to go to Asia, conduct their own investigation, and compare their findings with Nike’s self-exonerating claims. How could Nike make all of this disappear, and quickly?