NIKE'S PLAN TO TERMINATE CONTRACTS CREATES PROBLEMS

By Andi Abdussalam

Jakarta, July 20 (ANTARA) - Like a husband who somehow has become tired of being married to his wife of many years, and has therefore decided to divorce her, American apparel and sports equipment company Nike Inc. is to terminate its contracts with PT Hardaya Aneka Shoes Industry (HASI) and PT Nagasaki Paramashoes Industry (NASA) which have been supplying it with shoes for about 20 years.

        Nike Inc. decided to end its long-standing cooperation with the two Indonesian shoe manufacturers after the latter had rejected Nike's new price offer of US$11 per pair of shoes which was so much less than the US$15 per pair it had offered 18 years ago.

        The American company's decision to cut its relationship with PT HASI and PT NASA upset not only the managements of the two Indonesian firms but also their 14,000 workers who fear a stoppage in Nike orders will eventually cause them to be laid off.

        President Director of PT HASI and PT NASA, Hartati Murdaya said her companies could not accept Nike's new price offer because the wages of their workers who had been working with them for over 15 years had reached over Rp1 million plus over-time payment of more than Rp2 million per person.

        "The price offered by Nike is US$11 for the manufacture of a pair of shoes. This is lower than the US$15 price for a pair of shoes it offered 15-18 years ago. Now it is trying to find new factories which could supply it with shoes for US$10 or even US$7 a pair," she said.

        Newly established factories could offer a lower price as their workers' salaries are still below one million rupiah, she added.

        Hartati Murdaya said she had asked Nike Inc not to stop placing orders with her two companies at the same time because they were employing a total of 14,000 workers.

        "We hope Nike will extend its work contract with PT HASI for 18 more months before terminating it. For PT NASA we have asked a 30-month work contract extension," she said.

        She said the two companies had been receiving orders for 20 years from Nike Inc. But Nike unilaterally decided to terminate its work contracts for the production of Nike shoes with the two companies.

        "I have to be resigned to this fate and will accept whatever best decision is to be taken, but to me, workers' lay-offs are not a way out because their severance payments could be invested in another form of business that could reemploy them," she said.

        With Nike Inc's plan to terminate its work contracts, about 14,000 workers of PT NASI and PT HASI are facing the prospect of being laid off.

        On Monday this week, thousands of workers from the two companies held a rally outside the Nike office in Jakarta calling on the American company to continue its work contracts with their companies so that they would not lose their jobs.

        They said if Nike Inc pushed through its plan to end its work contracts, they would boycott the American company's sports shoe products.

        "The workers are making all-out efforts to have Nike Inc continue its cooperation with their companies," Sumardi, chairman of the Apparel and Shoes Unit of the All Indonesian Workers Union (SPSI) at PT NASA, said.

        In response to the problem being faced by the workers at the two companies, President Susilo Bambang Yudhoyono called for an immediate solution to their fate.

        The president said the problem of thousands of factory workers facing the loss of their jobs must be solved soon and in the best possible way.

        "The president has asked that data on the matter be collected and the problem be solved as soon as possible," Industry Minister Fahmi Idris said.

        Fahmi Idris said he had met with Trade Minister Mari Pangestu, Manpower and Transmigration Minister Erman Suparno, Investment Coordinating Board Chairman M Lutfi and the owner of PT Nasa and PT Hasi, Hartati Murdaya.

        BKPM chief Muhammad Lutfi will also meet with Nike Inc.'s management, to get information on its decision to terminate its work contracts with PT Nasa and PT Hasi. After necessary data are collected the government will come up with a formulation for the solution to the problem.

        Now, the government has set up a crisis center with members from the ministries of manpower, trade and industry to mediate in the dispute between Nike Inc and PT HASI and PT NASA.

        Speaking to reporters after receiving representatives of the Confederation of Indonesian Workers' Unions (KSPSI) and the National Workers Union (SPN), Manpower Minister Erman Suparno said as an initial step the ministers concerned would be notified about it.

        Discussions would later be held to determine steps to be taken and the time needed to settle the case. In line with the president's order, the problem between Nike and the two shoe manufacturers will hopefully be immediately settled.

        "We will take steps for its settlement and facilitate a meeting between Nike, NASA and HASI," the minister said.

        At the meeting with the minister, the workers' unions only conveyed a demand for the continued employment of the 14,000 workers in the two companies. Time and conducive situation would be needed for the process to move and in view of that the minister called on workers and activists to cool down so that a good settlement could be reached soon.

        (A014/A/HAJM/13:10/A018) (T.A014/D/A014/A018) 20-07-2007