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Adidas in Hot Water With College Clients

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If it fails to rectify a situation involving an Indonesian factory formerly responsible for the manufacture of some of its apparel, Adidas could have a reduced presence on college campuses and intercollegiate athletics sidelines this fall.

Seventeen schools terminated or suspended their contracts with the apparel giant after an Indonesian factory with which Adidas had a contract for the manufacture of goods, PT Kizone, failed to make mandatory terminal compensation payments to employees who left the factory and also failed to make regularly scheduled payments to current employees in late 2010.

The issue really picked up steam in the past month when a growing number of universities with exclusive all-sport contracts with Adidas (such as Michigan and Wisconsin) began giving it ultimatums and threatening contract termination unless the PT Kizone controversy was resolved.

For now, this has caused Adidas to get its act together on behalf of the former factory workers.

“Adidas knew the university pressure wasn’t going away, and this was a strong motivator for them to pay severance to the PT Kizone workers,” United Students Against Sweatshops international campaigns coordinator Garrett Strain told ESPN.

Those who hated the Zubaz uniforms that Adidas unveiled for the NCAA tournament are surely hoping more schools peel away from the apparel company.

[Dollars Blog]

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