Ever wonder where the air in Nike’s really comes from?
Maybe it’s these guys’ salaries that has led to the non-payment of more than $2 million in severance pay to 1,800 Honduran workers when Nike closed two factories there, which led to the University of Wisconsin discontinuing its licensing agreement with the company.
Nike says the decision is due to the fact that it only subcontracted apparel production from the factories, but that line can be fuzzy and it is definitely important to keep a mindful eye on your partners. However U of W Chancellor Biddy Martin in December gave Nike 120 days to rectify the situation involving the layoff of 1,800 employees at the factories, Hugger and Vision Tex, in January 2009. On Friday, she concluded that Nike hadn’t done enough.
Wisconsin’s code of conduct requires the 500 companies that make products bearing its name or logos to take responsibility for the subcontractors’ actions according to Sportsonesource. Martin said, “We remain hopeful that Nike – which has had a positive impact on working conditions in the industry overall over the past several years – will ultimately decide that it is in everyone’s best interest to ensure that the workers receive severance or to establish a meaningful alternative plan.”
In response, Nike said that while it regretted UW’s decision, it sees the factory’s owners, Anvil and New Holland, as responsible for the compensation.
“It remains Nike’s position that factories which directly employ workers are responsible for ensuring that their employees receive their correct entitlements and, as such, Nike will not be paying severance to workers that were employed by Hugger and Vision Tex,” said Nike in a statement. “Hugger and Vision Tex were subcontracted factories to two factories, Anvil and New Holland, that took orders from Nike. Nike paid in full for all products ordered from Anvil and New Holland and we understand that those factories, in turn, paid in full to Vision Tex and Hugger.”