Thousands of workers may lose jobs as Nike scales back

Thousands of workers may lose jobs as Nike scales back

Multa Fidrus
The Jakarta Post
Tangerang

Thousands of workers at PT Delton Indonesia, a sub-contracting
factory of shoe giant Nike Inc. of the United States, will very
likely lose their jobs as the U.S. firm will stop its shoe orders
from some areas of Indonesia in November.

Due to the halted orders, PT Delton Indonesia, which is
located on Jl. Raya Legok, Tangerang, has planned a massive
layoff, some workers told The Jakarta Post here last Saturday.

They said that they realized the company's plan to dismiss
workers on a massive scale after seeing a letter signed by the
Nike's General Manager in Indonesia Jeff Du Mont last Monday,
stating that Nike would halt its orders starting from November.

In the letter, Du Mont made it clear that it was a business
decision that had prompted Nike to stop its shoe orders from the
country. The letter stated that the decision was made after
considering a number of factors regarding the state of the
economy here and the "capability and performance" of the
factories.

In recent years a number of companies, especially shoe
manufacturers have found the overall business climate here less
competitive in relation to other countries such as Vietnam and
China, where government regulations, human resources and legal
certainty all favor investors.

However, many workers said that their fate was still unclear
as the dismissal plan was just a rumor.

As of Friday, the factory workers were still working as usual.
But during a lunch break, they staged a rally on the factory
compound, urging the company management to pay serious attention
to their fate.

Sabarrudin, one of the workers, told The Jakarta Post last
Saturday that Nike's orders from the company in January and
February, decreased precipitously.

Within the last four months, Nike's orders to fulfill its
markets in several countries such as Britain, Korea, U.S., Japan
and the Philippines had again dropped drastically each month, he
told the Post.

Another worker Tasimin also admitted the company saw its
output decreasing due to the continuous decline in orders from
Nike. "Only a few of the factory's machines have been in
operation due to the decrease of orders," he said, adding, "We
have heard that there will be a massive layoff. It is likely to
happen should Nike continue to reduce its orders."

Tasimin said that he and fellow workers had planned rallies
at the U.S. embassy on Jl. Medan Merdeka Selatan, Central Jakarta
if Nike did not pay attention to workers.

"We have obtained permits to stage a rally from the police. As
of today, we are still waiting for certainty on our destiny even
though there had been talks between worker representatives and
the company management about a severance payment," said an eight-
year veteran of the company.

"We appreciate the company management for its attempts to
negotiate with Nike Inc. If the negotiations come to a deadlock,
workers will stage demonstrations at the U.S. embassy," another
worker Syaiful Bahri added.

Syaiful said if there was a massive lay off, at least 3,000
workers would lose jobs. The remaining 3,000 others would likely
be retained due to the company's financial difficulty with
severance payments.

The planned massive dismissal has apparently also worried some
200 vendors selling various goods and food near the factory.

"If they (workers) are dismissed, we vendors for sure will
also see our business drastically drop. I will likely lose my
customers," said Bewok, a food stall owner.

Neither the factory production managers or human resource
managers could be reached for comment.