Economically Impressive History, Nike Has Proven Both

¶ … economically impressive history, Nike has proven both the potential enormity of the athletic apparel industry and the effectiveness of a good logo. That, and an empire of merchandise, celebrity endorsement and university and sports organization contracts have made CEO Phil Knight's shoe manufacturing conglomerate the top producer and retailer of athletic wear. And while the increasingly disseminated effects of economic globalization have made Nike a consumer entity in some one-hundred and fifty countries, the prickliness of the issues inherent therein have been a considerable nettle in Nike's insole these most recent years. Allegations of Nike's illicit labor and production processes abroad have been a considerable help to the shoe company's closest competitors, and Nike continues to take a public beating over the issue even now.

In 1998, as human rights activists and anti-globalization protestors took hold of the Nike issue, Knight's perennial industry frontrunner became the leading target in efforts to expose practices of child labor, proportionally low wages, unsafe working conditions and physical and psychological abuse of laborers amongst sportswear manufacturers. As a result of these allegations, that centered specifically around Nike's sweatshop factories in poorer nations like Indonesia, China and Mexico, 1998 was the first year that Nike declared a loss in thirteen years.

Nike has since recaptured its competitive edge and continues to be the leader in the industry, amid consistent runner-ups Reebok, Adidas and New Balance. But a most recent decision by a California court that has deemed Nike's business practices as unfair competition threatens that title. The legal move represents a new phase in the activist attack on Nike, which continues to bear the brunt of the most publicly hurled epithets toward consumer industry globalization. Nike's response to most of the previous allegations were embodied in its drive to spare its public image. Advertisements for the corporation abroad spoke of good factory conditions and ethical business practices. This has been deemed by a recent California Supreme Court decision as misleading use of ad space by a margin of 4-3.

This action, which imperils Nike's far lower production costs abroad, has the capacity to serve as a great boost to number's two and tree, in Reebok and Adidas respectively. However, it bears noting, Reebok has been guilty of very similar practices, as annual Reebok Human Rights award ceremonies, featuring activists and celebrities alike, have been employed extensively to obscure violent suppression of worker rebellions and sustenance of sweatshop conditions in Chinese factories. Adidas and New Balance as well, have relocated labor and production facilities from American and European bases to far-more cost-effective Chinese establishments, where production funds are as comparatively low as worker rights.