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Nike breaks with 4 firms abroad

Says labor standards not met

PORTLAND -- Nike announced it is cutting ties with four Indonesian companieson Monday, saying they refused to comply with its standards for wage levelsand working conditions.

The announcement at its annual shareholders meeting came amid ongoingclaims that the Beaverton-based athletic shoe and sports apparel giant keepsmany of the 500,000 workers who assemble Nike products in Asia in sweatshopconditions.

The company said it is the first time it has cut a relationship witha contractor following a review of compliance with its code of conduct.

Good shoes are made in good factories. Good factories have goodlabor relations, Nike Chairman Phil Knight said.

He said factory conditions have improved dramatically since Nike beganas a small maker of athletic shoes 25 years ago.

Workers in Asian shoe factories a decade ago who had gone to sleep andawakened today would have thought he or she had died and gone to heaven,Knight said.

Violations of working conditions and wage levels are exceptions, Knightsaid.

Nike identified only one of the companies, Seyon, which manufacturesspecialty sports gloves.

Nike said Seyon refused to meet a 10.7 percent increase in the monthlyminimum wage, to $72.30, declared by the Indonesian government in April.

In an earlier news conference, San Francisco-based Global Exchange repeatedaccusations that Nike contractors operate factories similar to prison camps,paying below the minimum wage, hiring workers as young as 13 and violatingits own code of conduct.

Spokeswoman Medea Benjamin said conditions at two Chinese factories thatproduce for Nike violate both Chinese law and Nike work codes and that employeesover the age of 25 are fired.

Nike contends it pays well over the minimum wage in China.

Dusty Kidd, director of labor practices for Nike, said 998 women overthe age of 25 are working at its Wellco plant in China, one of those citedby Global Exchange.

If (firing employes aged over 25) is a policy, they're not doinga very good job of it, he said.

Knight called Global Exchange an irresponsible fringe group.

Earlier this year, Nike hired former United Nations Ambassador AndrewYoung to visit contracted plants in Asia and investigate working conditionsthere.

Young said he saw some worker abuse but nothing like what he had beenled to expect.

Some called the tour a sham.

Shareholders got a generally rosy financial picture of the company withNike president Tom Clarke noting that its stock is worth 30 times what itwas 10 years ago.

First quarter revenues were $2.77 billion, up 21 percent from the samequarter last year. First-quarter revenues from markets outside the UnitedStates topped $1 billion for the first time.

Clarke said Nike will be emphasizing apparel lines and sportswear designedfor women in coming years.

Clarke said the company's benchmark USA Footwear division doubled salesin three years but had only a 5 percent increase in the past quarter.

He said Nike also will pay more attention to sports more prominent abroadthan in the United States, such as rugby and cricket, to make its productsthe local sports brand of choice around the world.

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