The shoe and apparel giant's new plans show how difficult it would be to see a major rise in factory employment.
Nike is a major Pacific Northwest headquarters company, with about 12,000 employees in and near its base in suburban Portland. It does some manufacturing in the United States, including through contract partners: around 6,200 workers at 42 sites. But long ago, Nike just did it and joined the 10,000-mile-supply chain. Its factories, with more than 1 million workers, are in 42 countries.
Now, under pressure from shareholders over slowing sales and with growing competition from rival Adidas, Nike CEO Mark Parker (the Pacific Northwest’s best-paid CEO last year) said the company is refocusing on faster product development, e-commerce, and “near-shoring” of manufacturing. (The story was reported by Quartz).
Yes, that’s corporate-speak for new factories closer to the lucrative American market, but not actually in the United States. Think Latin America. And even these plants will be heavily automated, in partnership with Flex, a manufacturing concern that began in Silicon Valley but is now headquartered in Singapore.
Nike’s implied ambition to add 10,000 U.S. jobs if the Trans-Pacific Partnership had gone through is apparently dead. And even with TPP, the reality of Nike’s direction shows how the world actually works now, with global supply chains and emphasis on cost cutting. Meanwhile, like other companies, automation is taking the place of work that humans would have done.
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The Trump administration could put a dent in this by rolling out heavy tariffs. But that would cost American customers more and would risk a trade war. The administration could also go after the overemphasis on rewarding shareholders at the expense of investing in hiring domestic workers. But, no — rich investors are to be rewarded.
When America was “great” in the minds of the president’s populist supporters, people didn’t expect cheap fashion from Bangladesh. But expecting “great again” while shopping at Wal-Mart and running down unions is a cognitive dissonance the Trumpistas live with.
Today’s Econ Haiku:
T-Mobile as bait
Wish they could just run the firm
But that’s my hangup