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Nike Expansion Could Bode Well For U.S. Manufacturing

OPB | Dec. 10, 2012 3:46 p.m. | Portland

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Nike in downtown Portland

Nike in downtown Portland

Evan Sernoffsky / OPB

Governor John Kitzhaber says that if Nike gets the Oregon tax guarantee it’s looking for, it would hire as many as 12,000 new workers by 2020.  As Kristian Foden-Vencil reports, some financial analysts think a Nike expansion could spell good news for the nation’s manufacturing sector. 

Kitzhaber says the $440 million expansion project would employ about 2,900 construction workers.  And by 2020, it could have an economic impact of $2 billion a year. 

Independent investment advisor Bill Parish tracks Nike stock and says it’s one more indicator that the company is doing well.  

“I mean I hadn’t heard the specific plans, but it’s no surprise given Nike’s growth,” Parish says. “Everyone seems to want to think that Nike will slow down but they just don’t. They keep going.” 

Republican Leader Supports Governor’s Nike Plan

Governor John Kitzhaber is calling the legislature into special session Friday. He wants legislators to take up a plan to assure companies the state won’t raise their taxes once they expand operations. The plan is specifically designed to reassure Nike, as the company looks at a major expansion in Beaverton.

“Essentially what we’re proposing is simply providing business with certainty that when they make a major investment in job creation and in capital expenditures, the current method of business income taxation can be relied on for a certain period of time,” Kitzhaber said.

The Democratic governor’s proposal would come before the current Legislature, where the House is divided evenly between Democrats and Republicans. House Co-speaker Bruce Hanna is a Republican from Roseburg. He told OPB’s Think Out Loud he supports the governor’s plan.

“We’ve been trying to find ways to come together on a bipartisan basis to do the right thing to build economic development,” Hanna said. “This to me looks like an opportunity to not only say we’re willing to act and act immediately to keep one of Oregon’s premiere companies here, but also we’re also willing to say if you’re willing to come here’s something to consider.”

He expects the company will bring in new designers, graphic artists and apparel experts. But he says Nike might also be thinking of doing some manufacturing here. “The thing about Nike is they’re always a leading firm when it comes to major trends. And one of the trends that everyone is expecting is that there would be more manufacturing.”

Apple CEO Tim Cook has announced that his company will move production of one of its existing lines of Mac computers from China to the United States next year. But Parish says he’s not sure what form any expansion of manufacturing by Nike might take.

“Maybe there would be some type of assembly or whatever,” Parish says. “And it makes a lot of sense for a lot of economic reasons. Again, I haven’t heard that but it’d be really smart for Nike.”

Parish says he has no idea where Nike would expand, whether it would be at it’s current location near Beaverton, or elsewhere.  But he thinks the company won’t go too far from Portland International Airport. “They’re all about logistics. Shoes aren’t that big or heavy. I mean, one of their great strengths that people forget is: warehousing technology and logistics.” 

Kitzhaber’s proposal is that any company that commits to creating a minimum of 500 jobs and investing $150 million over a five year period should be able to know what taxes it’ll face over an agreed upon period.  But he noted that Oregon needs to move quickly, or it might face competition for Nike. 

“The company is growing rapidly, they have to expand somewhere and they have to do it soon,” Kitzhaber says. “And the fact is they’re being heavily courted by other states and other locations. But they’re prepared to sign an agreement now to expand here in Oregon.”

Governor Kitzhaber says Nike’s employment in Oregon has increased 60 percent since 2007.  Jobs with Nike pay an average wage of more than $100,000 a year.

“We support this proposed legislation as a way to help us continue to grow in Oregon,” said Don Blair, Chief Financial Officer for Nike.

The company also issued the following statement:

NIKE STATEMENT

We agree the Economic Impact Investment Act would provide businesses with the certainty needed to consider major investments in the State of Oregon. If the legislation is passed and an agreement with Governor Kitzhaber is signed, Nike would commit to expansion plans with a minimum of 500 jobs and $150 million in capital investment over five years.

Nike is proud of its long relationship with the State of Oregon. As a growth company, we hope to continue to bring high-quality jobs and economic benefits to Oregon for years to come. Oregon is home to Nike’s World Headquarters with more than 8,000 jobs in Washington County. Since 2007, Nike’s employment in Oregon has grown by nearly 60 percent despite declining statewide employment. Nike’s average income for all employment is over $100,000, approximately double the region and state average.

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