PT Tong Yang Fact

PT Tong Yang, a shoe factory located in Tambun Bekasi, Indonesia, has been a long-time exclusive supplier of Reebok, which is now owned by Adidas, with orders dating back to 1989. It has received many production awards for being one of Reebok’s best suppliers. The workers are organized under Serikat Pekerja Seluruh Indonesia Reformasi (SPSI Reformasi) and the workers and management have a long history of negotiating with each other in good faith. However, this was all placed in jeopardy in April of 2006 when Adidas began reducing its orders and demanding significant increases in efficiency from the factory. In June, Adidas asked the company to make considerable investments in new production machinery and provide a pilot line for the lean system. The factory spent 150 billion Rupiah (roughly $16.5 million dollars) to update the machinery and layouts and conduct worker trainings as required by Adidas. Unfortunately, despite this sizable investment, Adidas has shifted a majority of its orders away from this unionized factory, choosing instead to source from factories in which workers are not able to freely associate. This response, which we have seen time and time again in factories producing licensed apparel, can only be interpreted as a form of cutting and running – a shifting of orders from one factory to others with inferior labor conditions.