Swoosh Wars

The campus radicals met their shadow from Nike in Chicago. It was day six of a barnstorming summer "Truth Tour," accusing Niketown megastores of selling sneakers and clothes made in sweatshops. Starting out from New York, the 10 college activists had planned excitedly for a daily Webcast of their coming adventure, modeled on MTV's "Road Rules." But as they motored west in a big recreational vehicle, they grew increasingly bewildered that Nike managed to call out the local police to foil their every rally. Finally, banished to the street outside Niketown Chicago, Carrie Brunk spotted a lean man with salt-and-pepper hair who stood out in a motley crowd chanting anti-Nike slogans. "He was wearing the Nike corporate-casual line--you know, with the swoosh on the collar. Real sharp," says Brunk. "Frankly, we were amazed they would send this bigwig from the corporate headquarters to follow 10 kids in an RV."

The elegant gentleman introduced himself as Vada Manager, Nike director of global issues management, but the students still had no idea what they were up against. Over the course of the 13-day tour, a NEWSWEEK reporter interviewed dozens of students, fellow activists and company officials, assembling an inside look at one battle in the running war between anti-globalization protesters and one of their favorite targets, the world's largest shoe and apparel company. While rivals lie low, Nike has launched a counteroffensive true to its "in your face" culture. A longtime Washington operative, Manager says he was hired by Nike in 1997 to provide "political insight and strategy." Using the "permanent campaign" of the Clinton White House as a model, Manager now answers every attack, no matter how small, from unions and activists to the United Students Against Sweatshops, who organized the summer Truth Tour. Behind the scenes, Manager taps a network of campus allies for "direct intelligence" on the student movement. Tipped off in advance, he dispatched teams of senior sales and security executives to head off the Truth Tour at every store on its route. He alerted police to the identity of the students and to be ready for violence, and took some satisfaction when the tour fell apart before reaching its final target: Nike headquarters in Beaverton, Oregon. "When the students saw the growing security and police presence, it had a deterrent effect, and I think it went very smoothly," says Manager. "Nike approaches this as it approaches everything--as competition. And we aim to win."

Inside the Nike campus, set on 174 verdant acres behind a high earthen wall, executives described the students as tools of far more powerful forces. Exposes about long hours, child labor and toxic glues at factories used by Nike first linked it to the "sweatshop" charge in 1992. Nike quickly became what Manager calls "the poster corporation" of the emerging anti-globalization movement, targeted for its size, fame and worldwide reach. By 1998 the sweatshop cause had taken hold on U.S. campuses, mingling on occasion with union protests at Niketowns. By the time black-suited anarchists stormed Niketown Seattle during the World Trade Organization summit in December 1999, Manager was waiting inside with extra security, escape routes at the ready and a sense that students, anarchists and unions were now part of one broad anti-Nike front. "It saddens me," says Nike VP for corporate responsibility Dusty Kidd. "I think one day the students will wake up and realize they've been used by their mentors in the union movement."

The counteroffensive came straight from the top. In an office overlooking Lake Nike at the heart of his campus, founder and chairman Phil Knight says he decided in late 1997 to seize "the initiative" against protesters out to trash the brand he once called "my novel, my painting." It was a dark time for Nike. After tripling in the 1990s to more than $9 billion, Nike sales had hit a plateau. Shares were falling, morale was tanking and sweatshop activists were at the gate with a 40-foot cutout of Knight, "corporate villain." Debate erupted inside Nike over whether to abandon collegiate apparel, rather than risk further controversy in a niche that provides only about 1 percent of Nike sales. Rival brands were lying low or pulling out of the college market--an option Knight rejected. "The students are just one of the weird anti-globalization bedfellows who have made Nike their main target from the beginning, and they're not going away," says Knight. "This is going to be a long fight, but I'm confident the truth will win in the end."

The risks seemed obvious. "It's interesting Nike has chosen to take on these students, who represent their core young customers," says Atlanta brand consultant Alicia Reiss. "In the long run, they risk alienating youth, subtly eroding the brand." Interesting, but no surprise. Nike had revolutionized the $2.5 billion college-apparel market by signing multimillion-dollar marketing deals that allowed it to place its trademark swoosh on the uniforms and stadiums of nearly all the top collegiate sports teams in America. For Nike, retreat would have been high-profile humiliation. "Nike had a choice, fight back or sit back and take it," says Mike Pallerino, editor of Sports Trend Info. "And remember, this is Nike. They don't f--k around."

Working from a "war room" in Beaverton, a team of Nike executives came up with a plan. They would set the "industry standard" for sweatshop reform, and promote it with Nike's famous attitude. On May 8, 1998, Knight delivered his first speech in Washington, introducing himself sarcastically to the National Press Club as "the great Satan." Knight acknowledged past problems in Nike's network of 700 contract factories overseas, and unveiled a package of reform, including a minimum working age of 16, maximum weekly hours of 50 and inspectors to police the new rules. Inside Nike, the speech was a "watershed event" that required "a sea change in the company culture," says Knight.

In short, a company that still thinks of itself as an Oregon maverick entered politics. The war-room team became a standing operation and beefed up its Washington lobby. Manager has broad power to assemble "virtual teams" of executives and outside consultants to respond to any challenge. He hired pollsters to study the sweatshop controversy, and says the results so far show that while "many" consumers do associate Nike with sweatshops, a "negligible" few care enough to stop buying Nikes. In a series of ads in major college newspapers, Nike invited students on Truth Tours to see Nike factories for themselves, and spoofed anyone who would get facts from "the guy carrying a poster and chanting, 'Nike sucks'." "This is out of the Clinton playbook: leave no charge unanswered, control the agenda," says Manager, 39 and a veteran of four Democratic presidential campaigns.

Meanwhile, Nike threw its weight behind White House plans for a watchdog group to certify clothes made in "clean factories." Knight and other industry leaders created the Fair Labor Association in a Rose Garden ceremony with Bill Clinton in February 1999, and the response was swift. Dismissing the White House plan as "PR cover for Nike," the United Students Against Sweatshops mobilized to demand that schools give workers and students power to inspect factories making collegiate apparel for Nike and other brands. They built a shantytown at Yale, occupied administration buildings at Michigan and Wisconsin, chained themselves together by the neck in a boardroom at Kentucky. As the protests swelled into the biggest campus uprising since the early 1980s, Nike was the only manufac-turer to answer in public. When the University of Oregon said it would agree to the USAS inspection plan, Knight withdrew a $30 million personal gift and lashed out at the school--his alma mater--for "meddling in the world economy where I make my living."

Realizing they could get a rise out of Knight and angered by his "condescension and arrogance," the USAS decided to launch its own Truth Tour against Nike. Things got ugly on day one, Aug. 3, in New York. The students pulled up outside Niketown on 57th Street in an RV rented and driven by members of the needleworkers union. Before they could drop a single banner, dozens of burly Nike security officers swooped in, setting off a melee that spilled over five floors of the megastore and left one needleworkers organizer, Jim Grogan, with a cracked rib.

Manager got advance notice of the tour through a network of paid student sales reps and friendly administrators at more than 200 universities with Nike apparel deals. He monitors college papers and anti-sweatshop Web sites, and describes listening on the phone while administrators report on anti-Nike protests outside their windows. "I've never called Nike in alarm, but we do watch," says Mike Low, licensing director at the University of Arizona, a major Nike school. In talks with Nike, Low says, he has broken down the student movement into three strains: "good-hearted liberals," "hateful radicals" and "anarchists who just want to destroy things."

That last group worries Nike most. Since 1997 there have been 40 to 50 protests at Niketowns. Last year anarchists lit firecrackers, smashed pumpkins and tossed clothes racks inside an Oregon store. In fact, such "in-store actions" have grown so common, says Manager, that "we have pretty good relations with police desk officers in all the cities where there are Niketowns."

It was easy to prepare an intimidating welcome for the Truth Tour. The Nike team took videotape of the New York fracas and relayed it, along with bios of the RV activists (downloaded from the Truth Tour Web site), to police all along the route. In Chicago, Nike hired off-duty police to beef up security, and they greeted several startled Truth Tour protesters by name before hustling them out. "They were like, 'Hello, Carrie, you're not welcome in the store today'," says Carrie Brunk.

The tour sputtered to a stop at a USAS organizing conference in Eugene, Oregon, where leaders of the movement predicted Nike's "crackdown" would only inspire wider protests this spring. A day later, five Truth Tour stragglers arrived on the Nike campus for a final showdown. They drew shocked stares in their black anti-sweatshop T shirts and immediately asked the war-room team to "just sit and listen." They demanded, among other things, that Nike "stop criminalizing student activists." Steaming, the Nike executives demanded "some respect" and a chance to defend their factory record. Kidd offered to work "as partners" against sweatshops. With an incredulous wave at the coffee and cookies, Brunk snapped, "You try to make it all cozy here, but you just had police follow and harass us across the country!"

Nike won't back off. "It's just not in the culture here to retreat, or to keep your mouth shut," says war-room team member Amanda Tucker. Manager says his political polling and intelligence tell him the students are a "marginal" group who arouse little sympathy from peers or consumers. And he fully expects further clashes. As Manager escorted the protesters to the front gate, he muttered, almost to himself, "Well, I'm sure we'll be talking again. Just mix it up."