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.