Ripple effect and Nike 10 - Q (Oct. 15 1999)

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 NIKE INC - Quarterly Report (SEC form 10-Q)

Suppliers and Customers

We have focused our Year 2000 compliance efforts on our significant suppliers and customers - those that are material to our business - and are assessing the Year 2000 readiness of these significant suppliers and customers. We have assessed the Year 2000 readiness of 469 of our suppliers, 163 of which we consider to be significant suppliers. We have also assessed the Year 2000 readiness of 151 customers, 59 of which we consider to be significant customers. We have relationships with significant suppliers and customers in most of the locations in which we operate. The level of preparedness of our significant suppliers and customers varies greatly from operation to operation and country to country. NIKE relies on suppliers to timely deliver a broad range of goods and services worldwide, including raw materials, footwear, apparel, accessories, equipment, advertising, transportation services, banking services, telecommunications and utilities. Moreover, our suppliers rely on countless other suppliers, over which we may have little or no influence regarding Year 2000 compliance.

We have sent surveys to all of our significant suppliers and customers to determine the extent to which we may be affected by those third parties' Y2K preparedness plans. A substantial majority of our significant suppliers and customers have not responded to our surveys, have not provided assurance of their Year 2000 readiness, or have not responded with sufficient detail for us to determine their Year 2000 readiness. In the absence of adequate responses, have made independent assessments of our significant suppliers and customers and the countries in which they operate. These assessments included direct contact and discussions with persons coordinating Y2K compliance efforts for our significant suppliers and customers. We also researched regulatory filings and other public information available to NIKE provided by our significant suppliers and customers and, in general, countries in which they operate. We have identified as higher risk many of the countries that have been widely identified by government agencies and public reports as being significantly behind in their Y2K status.

-- Brian (imager@home.com), October 18, 1999

Answers

Nike Air shoes feel great! "Made in China" oops.

Buy imported items now, while they are cheap and widely available. Everybody needs sturdy shoes. We may be walking more ...

-- Ashton & Leska in Cascadia (allaha@earthlink.net), October 18, 1999.


It may not go quite that way because a wild card is in the picture. China has wanted to devalue its currency for some time but the globe has been tinkling its underware at the thought. (Certainly we can see from our own flopping exports the Chinese as it stands can't afford our products.) China is now becoming more assertive in its stance that it needs to devalue its currency, that would mean even cheaper products, though the availability due to the bug is another wild card.

-- Paula (chowbabe@pacbell.net), October 18, 1999.

"...sent surveys... A substantial majority of our significant suppliers and customers have not responded to our surveys..."

Um. How many companies do you think are doing this... or not?

Diane

-- Diane J. Squire (sacredspaces@yahoo.com), October 18, 1999.


Diane

Great catch of the scariest line in the Nike report.

When CALPERS the California Public Employees Retirement System surveyed the 2,469 foreign corporations that it has invested in only 600 responded. Of that group only 14% disclosed Y2K information. Only 12 said they will be compliant by year-end. (Orange County Register 6/17/99, page one, business section)

This sounds exactly like what Nike experienced.

-- Dana (A_Non_O_Moose@xxx.com), October 19, 1999.


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