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Document 44 of 67.

June 16, 1998

SECTION: Nationwide Financial News

LENGTH: 369 words

HEADLINE: NIKE TO SIGN DIRECT CONTRACTS WITH VIETNAMESE COMPANIES

DATELINE: Hanoi, June 16

BODY:

US sportswear firm Nike is planning to sign direct contracts with Vietnamese partners to manufacture Nike-labelled products, said Joseph M. Her, the company's vice chairman.

The announcement was made following talks with Tran Xuan Gia, Minister of Planning and Investment, during Mr Ha's 24-hour visit to Vietnam, according to Vietnam Economic Times.

Twenty million shoes are manufactured in Vietnam under licence from Nike annually, accounting for 10 per cent of the country's worldwide production.

The announcement has been questioned by some industry observers. Orders for Nike shoes manufactured in Vietnam have dropped 30-40 per cent in the past year. At the same time, some 3,000 workers employed by companies subcontracted by Nike have been laid off because of declining orders. Nike currently subcontracts five shoe and nine garment makers in Vietnam, indirectly employing 45,000 Vietnamese workers.

Officials at Pouchen Dong Nai, which makes shoes under contract for several sportswear firms, including Nike, announced they are finding it difficult to find work for thousands of workers.

Huynh Vi Quoc, Chief of the 100 percent Taiwanese-owned company, said orders for shoes have plunged recently, leaving 3,000 workers idle. The company now plans to give its workers additional training courses, or allow them to take fully-paid holidays.

"We hope that new contracts would be reached in this June," he said.

Mr Quoc pledged that the company's 10,000-strong labour force, including the 3,000 idle workers, will be paid their full salary until then.

"We're a group with a long-term strategy and good financial sources," said Quoc.

"We are confident to guarantee that."

The average monthly wage at Pouchen is about VND600,000.

The announcement comes after thousands of workers were laid off from textile and shoe-making factories earlier this year, at least 1,000 of whom were working at other companies subcontracting for Nike.

Pouchen installed its production line in Dong Nai province in 1994 and unveiled its products one year later. In addition to Nike, Pouchen makes shoes for the Adidas and Reebok sportswear firms.

(VNA)

LANGUAGE: ENGLISH

LOAD-DATE: June 16, 1998