The rise (and fall?) of Adidas

by Ashok Kumar

Ceasefire (UK) July 16, 2012

http://ceasefiremagazine.co.uk/rise-and-fall-adidas/

Multinational apparel company Adidas has turned itself
into a global branding juggernaut whilst simultaneously
avoiding any public scrutiny over the working
conditions of its factory workers. Ashok Kumar explores
the development of the global anti-sweatshop movement
and shows how two decades of activism have culminated
in a new multi-nation campaign against the company.

In September of 2000, as activists laid siege to the
IMF and World Bank summit in Prague, South African
finance minister Trevor Manual pondered the relevance
of protesting a system that felt so inevitable, "I know
what they are against but have no sense of what they
are for."

Unlike the perceived ambiguity of much of the
anti-capitalist movement at the time, the
anti-sweatshop movement has always remained steadfast
in its demands. Issues such as dignity at work, freedom
of association and livable wages remained at the
forefront. The problem wasn't that workers and
activists didn't know what they were for - it was how
to get it.

The rise of Adidas

One of the more pressing issues of subcontracted labour
is the non-payment of a legally mandated terminal
compensation (`severance'). In 2011, the PT Kizone
factory in Indonesia was forced to close and 2,700
workers were left immediately without jobs. The factory
produced for Nike, Adidas and the Dallas Cowboys. As
indicated in a report by the Workers Rights Consortium
(WRC), Nike and the Cowboys immediately agreed to pay
their share of what was owed, #1m and #33k
respectively.

However, Adidas, which owes #1.2m, continues to refuse,
claiming `no business relationship at the time of
closure', a fact that the WRC report states is "without
any basis", since Adidas continued orders a full two
months after the violations began. Adidas recently
offered a #20 food voucher to Alfamart, the retail
price of an Adidas football, as a substitute for what
is owed.  The workers flatly rejected the offer. 
Adidas' position is consistent with their
well-documented record on workers' rights abuse.

The Adidas Group has risen to become one of the largest
and most profitable brands in the world. It towers
above any other Olympic sponsor, enjoying a `big lead'
in public perception according to the YouGov 2012
BranIndex, and has successfully implanted itself into
every section of the market and every genre of social
and cultural life in a way unmatched by any other
brand.

Adidas' profits have climbed dramatically and it is now
seen as a `recession-proof' brand.  In 2005, the
company acquired its rival, Reebok, as part of an
aggressive new strategy to dominate the global
sportswear apparel market. Adidas has witnessed an 18%
spike in sales in the past twelve months alone,
bringing its annual profits to $13.3 billion in 2011
(#8.6b) and is expected to gain an additional 12-17% in
2012.

These profits come aloft an aggressive marketing
strategy to carve out a major share in every major
sporting event, from an 11-year $400m (#260m) deal as
official clothing provider for the NBA to its $100m
(#65m) sponsorship of the 2012 Olympics, Adidas'
profits are expected only to rise.

Despite this success, Adidas remains an industry leader
in violations to its more than 1 million workers,
labouring away in 1,236 supplier factories in 63
countries. Adidas retains a `zero tolerance' policy
towards workers organising or trade union activity in
any of its subcontracted factories.

Indonesia remains a major supplier country, where
Adidas full time workers bring home less than $2 (#1.3)
a day, and some of whom have reported how, "everyday
someone in the factory passes out because of
exhaustion." In 2005, dozens of union leaders at
Indonesia's PT Panarub factory were dismissed and
blacklisted for participating in a legal strike. The
factory is one of the world's largest suppliers of
footwear and cleats for Adidas. By 2006, Adidas had
reduced its orders to the factory leading to 1,000
lay-offs.

Around the same time, El Salvador's Hermosa factory was
forced to close down after workers formed a union and
Adidas abruptly halted its orders to the factory. 260
workers were laid off with #535,000 unpaid severance.
To this day many of the workers continue to be
blacklisted from employment.

In 2006, less than a year after Adidas purchased
Reebok, two Reebok producing factories in Indonesia, PT
Spotec and PT Dong Joe, closed down. As is standard
operating procedure for Adidas producing factories -
union leaders were blacklisted, and 10,500 workers were
laid-off. A 2010 report found that 9,000 of those
workers remained unemployed despite Adidas' `commitment
to rehiring'.

It was reported by the Indonesian Footwear Association
that Adidas/Reebok had not increased payments to the
suppliers for over 5 years preceding the closure,
whilst at the same time Adidas executives could be
found boasting of a 27% second quarter net profit as a
result of the Reebok takeover.

Between the 24th and 29th of June 2011, 93,000 workers
at a major Adidas supplying factory, Pou Yen in
Vietnam, took strike action for better pay and
conditions. Over twenty workers were arrested and three
young labour activists were sentenced to prison for
nearly a decade for their involvement in organising the
strike.

Just this week the Daily Mail reported that the London
Organizing Committee would be investigating Adidas
after revelations emerged that `workers living in
cramped squalid conditions said they earned $61 (#40) a
month for working eight hours a day, six days a week'
to produce Olympic `fanwear'.

Unlike other cases, the recent case of PT Kizone has
resulted in an eruption of protests in Indonesia and in
the global North.  The tactics and strategies of global
corporate campaigns employed today are the result of
lessons learnt from two decades of anti-sweatshop
campaigning.

Two decades of anti-sweatshop campaigns

During the industrial era, it was the regulation and
effective control of most stocks and flows,
particularly over commodities, money and capital across
well-delimited territories that resulted in higher
negotiating power for workers without risk of capital
flight.

From the mid-1970s onwards, however, the global North
underwent a `post-industrial revolution' resulting in a
closing of much of the manufacturing industry and with
it an end to historic industrial union power. This
manufacturing shifted to subcontracted factories in the
global South, where worker resistance has been met with
an end to product orders and the closing of the
factory, rendering industrial trade unions powerless
against liquid capital.

Neoliberal globalisation has radically empowered
transnational corporations ( TNCs), injecting capital
into landscapes that were once insulated from global
capitalism. The garment sector, described as `the most
globalized industry in the world', has shifted from
"production-driven" to "buyer-driven" commodity chains,
meaning the geo-economy is now determined by brand-name
merchandisers (read: buyers) who, through their ability
to select suppliers from all around the world,
concentrate enormous profits and power from those who
produce the commodity to the brands who purchase them. 
By exploiting geographic differentiation in costs,
surplus labour, and the restructuring of state
regulation, TNCs have been able to turn the screws
tighter and tighter on complex supply chains.

Activists' initial reactions to capital flight saw
calls for protectionism from the increasingly ossified
trade union movements of the North who tended to blame
so-called "cheap" workers in the South with little
effort to develop solidarity between the two spheres.
The 1990s, however, witnessed a further expansion of
global capital and with it an eruption of
anti-sweatshop solidarity campaigns specifically
targeting major clothing brands.

These campaigns proliferated as stories of cramped
factory conditions and the overworked and underpaid
female garment workers of the South began trickling up
to the North. The early 2000s saw a wave of animated
grassroots anti-capitalist protest on the heels of the
historic convergence of `teamster and turtle' against
the WTO in Seattle. A consensus amongst trade union
activists began to take shape in both spheres of the
globe.

In the heady days of the 1990s, students and activists
demanded that companies adopt "codes of conduct", TNCs
responded to the flurry of anti-sweatshop activity in
the global North by introducing codes. The code of
conduct model within a consumer choice regime continues
to remain the strategy of many first-world
`anti-sweatshop' or `fair trade' NGOs.

The voluntary nature of codes along with market-based
`fair trade' certification make enforceability near
impossible, entrenching a colonial north-as-agent and
south-as-victim power dynamic, and serving only as a
convenient public relations tool for TNCs.

After the failure of a consumer choice-centred
strategy, some NGOs shifted gears, lobbying to provide
resources to state governments to enable them to
enforce their own labour laws. Pushing for the
regulatory power of nation-states to combat the
hegemony of capital. This too, by all available
accounts, has proven a failure. The primary reason is
linked to the relationship between global capital and
the state. Global capitalism has weakened states to the
extent that many consciously undermine their own laws
to create the optimum environment for capital
accumulation.

Thus with the acceptance of increasing nation-state
powerlessness and its position within global capitalist
formation, activists proposed reverting the
meta-national governance regimes (free trade and WTO
agreements), that have accelerated the capacity of
capital to globalise, to include a minimal standard of
workers to organise and bargain collectively.

The demand for workers' rights from capital's
supranational edifices, such as NAFTA, GATT and WTO as
arbiters (commonly referred to as the `social clause
debate') has, with the exception of Europe's Maastricht
Treaty, few documented cases of any real application.
Other international bodies, such as the UNs
International Labour Organization (ILO) have honourable
goals, but again, have few examples of enforceability
at the base.

On the issue of these conflicting "rights", Marx
famously wrote that "between two rights" - that of
owners to appropriate common goods; and those of the
dispossessed - "force decides". This extends to the
neoliberal context, as the rights of the dominant
social process of capital accumulation through market
exchange against the rights of workers for political
democracy and collective action.

The anti-sweatshop models outlined thus far have done
little to open up space for workers to organise.
Especially in the most exploitative industries, like
the garment sector, where there are almost no examples
of large-scale factory unionisations that have not
resulted in the `cutting and running' of capital,
invariably leading to the closure of the subcontracted
factory. Methods that rely solely on the benevolence of
consumers, NGOs, the State or the perceived benevolence
of transnational capital prioritise the rights of
capital over that of labour.

Peter Dickens sees global commodities as "derived more
and more from an increasingly complex geography of
production, distribution and consumption." In other
words, the point of consumption in the new
international division of labour is a critical
component to combat the asymmetrical relationship
between capital and labour.

By the late 2000s, activists from both global spheres
recognised the need for worker-driven campaigns that
harnessed both worker and consumer power. Many of the
corporate codes of conduct that had originally been
pursued by activists were now being followed-up by
consumer-driven corporate campaigns as a means of
enforcement.

Modern labour corporate campaigns claim their roots in
the United Farm Workers (UFW) of the 1960s and 70s that
incorporated a worker-driven strategy of strikes in the
field and secondary pickets of purchasing retailers.
Targeting more than 200 different agribusiness item,
the UFW was most notable for its highly visible strikes
and boycotts, as well as securing victories against
major grape growing corporations.

This strategy finally led to the 2008 SITRAJERZEESH
Union and United Students Against Sweatshops
(USAS)-initiated campaign against Fruit of the Loom
subsidiary Russell Athletic. It serves as an
instructive model of successful transnational
solidarity given the historically insurmountable
challenge of trade union organisation under the regime
of global capital.

Through a two-pronged latitudinal strategy, workers in
Honduras attacked the source of capitalist production
whilst activists in the core responded through a
comprehensive coordinated retail boycott, targeting at
the consumer, retail, licensing and political levels in
the US, Canada and the UK.

The campaign led to 110 universities cutting contracts
valued at over #33 million, becoming the largest
collegiate boycott of an apparel brand in history and
leading to an unprecedented reopening of a unionised
garment factory, rehiring of over 1,200 employees, a
multi-million dollar payout to workers and a commitment
from Fruit of the Loom to extend union neutrality
across its supply chain in Honduras.

With eight factories and 10,000 workers, Fruit of the
Loom is the largest private sector employer in Honduras
- making the agreement far-reaching. The campaign's
landmark success is a result of its incorporating a
worker-led, solidarity-based strategy rather than the
established model of consumer-led campaigns.

This brings us back to Adidas, which has established
itself as a global juggernaut of corporate power and
influence. With its well-oiled PR machine, glossy
annual CSR report, army of spin- masters justifying
abuses under a guise of the `complexity of
wage-setting', with board seats in Kafkaesque front
groups like the `Fair Labor Organization', alongside
insidious campaigns like `Girls all in' , and a history
of claims of `rehiring' fired workers (which has never
materialised anywhere) Adidas has successfully ducked
and dodged every attempt at accountability - ensuring
the continued systematic abuse, humiliation and violent
extraction from its sweated labour in the far corners
of the globe.

Its messaging is crisp: winter or summer, young or old,
fat, skinny or athletic - Adidas is everywhere and is
for everyone. Whereas main competitor Nike is limited
to athletic activity, Adidas has reached ubiquity.

Walk down an East London street and you will find
thick-framed hipsters sporting the pastiche flavors of
Adidas Originals, take a stroll down a housing estate
and it becomes clear that the Adidas bag is a staple
accessory for many working class youth, go to a swanky
gym and you'll find middle-aged yuppies sweating it out
in a class or in the weight room in Adidas sports
apparel. Switch on the TV - from musicians to athletes
to cultural icons, from Katy Perry to Andy Murray to
Missy Elliot; Adidas has come to define a kind of
universal cool, a brand identity with few race, class
or gender boundaries to box-it-in or out.

Adidas' documentary-style, pulsating adverts allow it
to traverse the full breadth of the public's purchasing
power, dialectically exploiting whilst also
transcending the constructions of difference,
reproducing otherwise fragmented social relations to
expand its market share.

This strategy fits snugly into the cultural logic of
late capitalism where real life is inseparable from
advertisements and `identity' is presented as fluid and
transient, with its relevance underpinned only by niche
consumption practices. Established notions of community
are degraded and people are forced to seek identity
exclusively through the products they purchase.

They not only tell you what to think (`I need those
sneakers') but how to feel. The commodity dominates;
ones perceived `free choice' has largely already been
made for them. Adidas, alongside other brands,
facilitate communities of utilisation and compulsion
within a culture that engenders the individual
seemingly devoid of the collective. Thus, successfully
confronting it from below through collective action is
no simple task.

The case of PT Kizone has resulted in demonstrations by
hundreds of workers and their families at the German
Embassy in Jakarta, quickly escalating into a
full-fledged USAS campaign and solidarity
demonstrations in Spain, Denmark, Germany, Austria,
with contracts threatened on campuses in the US. Here
in the UK, groups War On Want, People and Planet, and
Labour Behind the Label announced they will campaign to
ensure Adidas pays what it owes to the workers of PT
Kizone.

Today, workers and activists have the historical space
to reflect, reassess and realise that the ends remain
the same - the means, however, different. That it is
ultimately through the collective struggle by
labour-led organization at the point of production,
coupled with international solidarity at the point of
consumption, that workers and the oppressed can cripple
the force of transnational capital.

[Ashok Kumar is a writer, activist and a PhD candidate
of Economic Geography at Oxford University. He was a
contributor to The Assault on Universities: A Manifesto
for Resistance (Pluto 2011) and It Started in
Wisconsin: Dispatches from the Front Lines of the New
Labor Protest (Verso 2012). He tweets at
@[log in to unmask]]

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