Pou Chen Adidas, and Nike
... Timberlands, Converse, Reebok, Polo, Champion, Lockport, Columbia, and Winson
Pou Chen Corporation is the world's largest shoe manufacturer (Bernstein, 2000: 86). Pou Chen is owned by Taiwanese entrepreneur David Tsai and his four brothers and employs over 150,000 workers.
"Pou Chen Corp. of Taiwan, the company behind the new (Huyen Binh Chanh mega-factory) plant, is the largest of the Asian suppliers at the center of the controversy over how workers who make Nike products are treated" (Manning, 1998, addition mine). The largest footwear factory on the planet will employ 65,000 workers. In just one Pou Chen factory in Indonesia, 23,000 workers make 10 million pairs of Nike shoes for export each year. Pou Chen Corporation opened the factory in 1993 at a cost of $100 million and produces more than a million shoes a month there exclusively for Nike. Pou Chen's Yue Yuen shoe factory complex in Dongguan in China employs more than 40,000 workers.
Who owns factories? Four of Nike's five largest footwear suppliers are owned by ethnic Chinese who fled China for Taiwan and other Asian countries.
The Pou Chen factories in Thailand - "Pou Chen early July this year after finishing his contact, helped to link us with many of his friends who returned to Thailand during the same period.
"There are nine factories in the same area in Chang Hua, which produces almost every shoes' brand name like Nike, Adidas, Timberlands, Converse, Reebok, Polo, Champion, Lockport, Columbia, and Winson. I was in the factory number 9 called AA2 which produces sample shoes. From what I can recall the first factory produced Timberlands, NDC factory produces Nike. BB1 produces Adidas, The sixth factory produces Converse, Champion and Reebok, the AA1 produces Nike, EE1 produces Columbia and Lockport, EE2 and factory number eight producesNike again." (CCC).
Who is in charge of the Supply Chain? "When the giant lurches, the Lilliputian subcontractors are sent sprawling" (Manning, 1998). Some subcontracts such as Feng Tay, Nike's second-largest supplier, sells 100 percent of its production to the Beaverton company. However others are able to resist. Estimates are that Pou Chen relies on Nike for 53 percent of its sales. Yet, Pou Chen is not without its own power to resist Nike. Pou Chen also produces shoes for Adidas AG, Reebok International Ltd. and virtually all the other major Western brands. Nike spreads its contracts around.Nike gets 15 percent of its footwear from Pou Chen, 10 percent from Feng Tay (Manning, 1998).
What are the working conditions?
Many miles from the nearest big city, the factory provides housing for 12,000 workers. A walk through its vast open production rooms, with hundreds of workers bent over sewing machines, makes depressingly clear how much manual labor still goes into shoemaking, even though there are also sophisticated presses to mold shoe soles and a few computerized sewing machines. Some of the work seems dangerous: Young women wielding brushes work over open bowls of strong-smelling glue with no masks or ventilation (though Enderle said Nike had plans to shift to water-based glues). The Nikomas factory is more attractive than the typical needle-trade sweatshop found throughout the world, including the United States. NikeTown seems to have gotten rid of the physical sweatshop, while leaving the particulars of sweatshop labor - low wages, unceasing work intensity, and discipline without meaningful worker representation - entirely in place.
Until recently, not all workers even earned the legal minimum - $2.50 a day, which worker advocates contend falls a dollar short of being minimally adequate. Last year, for example, Pou Chen successfully petitioned the government to be excused from a new increase, and it requested a further exemption from this year’s hike. It won its reprieve but agreed to pay the minimum anyway - a prudent decision. Half of the 10,000 employees of another Nike contractor plant near Jakarta walked out in late April over the contractor’s refusal to pay the new minimum. Nike tried to play it both ways - insisting in interviews that contractors should pay the mini mum, but refusing to pay more for the shoes. At the same time, a Nike spokesman ominously wondered out loud "whether or not Indonesia could be reaching a point where it’s pricing itself out of the market." Over lunch at the factory, Nike representatives and Pou Chen Indonesia’s vice president, Eric Chi, who ran a shoe factory in Los Angeles in the late 1970s, reiterated their insistence that, as Chi said, "if we treat people with respect and dignity, that will come back to us." Benson and Enderle talked about the training Nike offered, its plans for an AIDS-awareness campaign, the "fair price" store on the factory grounds and other worthy projects.
So why not pay double the minimum wage? After all, by Chi’s rough calculations, the direct labor cost in a typical $60 shoe is all of $1.20. The Canadian firm BATA manages to pay its workers, who produce cheap shoes for the Indonesian market, double what export-shoe workers earn. Analysts say Nike annually spends $650 million on marketing, nearly 10 times what it would cost the company to double the wages of all its Indonesian workers. Which is not to say that all the money goes to the corporate coffers of Nike and its contractors. A sizable chunk goes to payoffs for Indonesian generals, government officials and cronies - according to the ECONIT Advisory Group, a Jakarta-based consulting firm, it comes to about 30 percent of total business costs, more than double Pou Chen’s factory-labor bill. (Source, Labor Alert, 21 July, 1997).
- 1993 - 1995 - Strikes at Pou Chen factory in Indonesia (Nikomas). PT Nikomas Gemilang produces for both Nike and Adidas. The 1995 Strike leads to dismissal of 13 workers at Pou Chen factory (Bama Athreya -- finishing field research for dissertation).
- 1996 - Vietnam - Nike contractor, the Taiwanese firm Pou Chen
Vietnam Enterprise, a floor manager forced 56 women to run around the plant in the hot sun as punishment for wearing non-regulation shoes, Nguyen said. Twelve fainted and were taken to the hospital, he said (Global Exchange; See Vietnam Labor Watch Report). That incident occurred on March 8, International Women's Day.- 1997 On June 27, 1997 Hsu Jiu Yen, a supervisor at the Pou Chen Vietnam Enterprise Limited factory, which makes sports shoes for Nike, was sentenced to six months' imprisonment for forcing 56 women workers to run a 4 km circuit around the factory in the full heat of the sun for failing to wear regulation footwear. Eight of the women workers lost consciousness and had to be taken to hospital (source).
- 1998 - Manager at Pou Chen factory in Viet Nam pours paint on the head of a worker for making a mistake. She is paid $15 compensation (Chronology).
- 1999 - Workers' real wages have fallen there by 30% in just the last two years; Pou Chen and Nike are said to have saved $16 million during that time on labor costs. And the virulently anti-union Indonesian military is always ready to accommodate Nike. Last week, for example, the military deployed soldiers at the Pou Chen plant just as the workers' union labor agreement
expired" (September 10, 1999, Global Sweatshop Coalition).- 2000 - "One former Pou Chen worker told Thai Labor Campaign organizer, Junya (Lek) Yimprasert: "I was so much in pain and suffered from kidney infection because I always suppress my urination. [Due to company regulations limiting visits to toilet.] I requested the supervisor to send me to the hospital, but I have to wait for nearly one hour until there were two more sick workers to fill the car before it can take off to the hospital" (Source).
November 16, 2000 - " There is a strong and violent strategy being used to stop workers from organizing. In some cases, workers were laid off from the factory and the work was subcontracted to factories where workers receive lower wages and have no legal protection. From the interview with Thai workers that worked for Pou Chen in Taiwan (that produce Nike shoes) they said that " We can tolerate the hardship, but we cannot stand the behavior of supervisors that are very cruel and like to yell and scold at us unreasonably" (Source).
Many women workers also facing with urination pain “I was so much in pain and suffered from kidney infection because I always suppress my urination. I requested the supervisor to send me to the hospital, but I have to wait for nearly one hour until there were two more sick workers to fill the car before it can take off to the hospital. I have to stay in the hospital for six days without any visit from the company management. During my sick leave, the company paid only 50% of my wages. As soon as I returned to work the company forced me to work over-time until 11 PM or midnight every night, although I tried explaining to the supervisor that I need to rest but, however, the supervisor forced me to work and I had to work.”
"At Nike's urging, Nikomas set a higher wage scale for senior workers and ousted managers who had yelled abuses at workers. The factory also improved safety and food in company dorms, which house 13,000 workers" (Bernstein, 2000).
"Pou Chen Chief Operating Officer Eric Chi says Nikomas is building a shopping mall, hospital, cinema, and a day-care center, which is needed because 85% of workers are female. ``We've heard about all this coming, and we hope conditions here will be better next year,'' says Yune, a woman in her early 20s who has worked and lived at Nikomas for five years." (Bernstein, 2000: 52).Links
Ballinger, Jeff (2000) "How the Military Enforces Global Capitalism Nike’s Armies"
Bernstein, Aaron with Michael Shari in Jakarta, and Elisabeth Malkin "A World of Sweatshops" Business Week, New York; November 6, 2000, Iss. 3706; Industrial/technology edition; p. 52, 84.Manning, Jeff (1998) "Nike Tracks Across the Globe" Oregonian On Line.
Clean Clothes Campaign "What Nike Claims is Untrue about Web Reports"
Clean Clothes Campaign Adidas and Pou Chen.