In what took many labor advocates by surprise, Nike Inc. put out a statement on Friday saying it intended to accelerate investment in “advanced footwear manufacturing” in the U.S., if a Trans-Pacific Partnership (TPP) is passed and finalized.
The statement came hours before President Barack Obama was to speak at the company’s Beaverton, OR headquarters on the topic.
Nike said the advanced manufacturing model is expected to lead to the creation of up to 10,000 manufacturing and engineering jobs in addition to thousands of construction jobs and up to 40,000 indirect supply chain and service jobs in the U.S. over the next decade. Nike didn't say how many of the 10,000 manufacturing and engineering jobs would be created by the company versus its partners.
Currently, the wide majority of Nike's footwear and apparel is produced in overseas factories with footwear production concentrated in Vietnam, China and Indonesia.
The TPP would open trade among 12 countries, including the U.S., Japan, Vietnam, Australia, New Zealand and Chile. Vietnam, where Nike produces a large percentage of its shoes, is pushing the U.S. to lower import tariffs on footwear that can reach 20 percent of their value at the border. But Nike said an approved and ratified TPP could alter its production model.
“We believe agreements that encourage free and fair trade allow Nike to do what we do best: innovate, expand our businesses and drive economic growth,” said Mark Parker, president and CEO. “Nike has always led the way in product innovation, and now we will be able to accelerate our investments to continue to drive manufacturing innovation.”
U.S. manufacturing would allow Nike to deliver product faster to market, create innovative performance footwear, provide customized solutions for consumers, and advance sustainability goals.
“We commend President Obama for his strong leadership to advance these important trade initiatives,” said Parker. “Our employees and our business depend on free trade and the ability to reach athletes and consumers around the world.”
Nike employs 26,000 people in the U.S., including more than 8,500 in Oregon, and does business in 190 countries around the world. The company contributes an annual economic impact to Oregon of more than $2.5 billion.
Nike currently has a manufacturing footprint in the U.S. that includes footwear air sole manufacturing in Oregon and Missouri and relationships with manufacturing partners across the United States that employ thousands of Americans. Nike’s contract factories overseas employ about one million people, roughly a third of them in Vietnam.
While free trade is being touted as a way to lower prices for consumers, Obama’s team also argues that it could foster more U.S. manufacturing jobs by reduce other countries’ tariffs and thereby supporting U.S. exports.
The talks to conclude the Trans-Pacific Partnership are opposed by U.S. labor groups, most Democratic lawmakers and the U.S. operations of rival shoe maker New Balance, which has production in Maine and Massachusetts that is protected by the tariff.
