Nike Inc. is winding down operations at a facility in Goodyear, Arizona, marking an abrupt turnabout for a project meant to become a state-of-the-art plant for its Nike Air shoe line.
The company acquired the property in 2019 and set about turning it into the third so-called Air Manufacturing Innovation facility in the U.S. The US$184 million investment was expected to generate more than 500 full-time jobs, the sportswear giant said in July of last year.
“We are experiencing unprecedented times and due to the COVID-19 impact we will no longer be investing in our Goodyear facility,” the company said in a statement Tuesday. “We are repositioning our resources to further invest against our biggest opportunities and Air MI will continue to be an important part of Nike’s growth strategy.”
Nike declined to provide details on how many employees will be affected or if the company will sell the factory.
The move isn’t the only cost-cutting right now at Nike, which is coping with sluggish demand from brick-and-mortar stores, many of which have been shuttered during the pandemic. The company announced job cuts that will cost it US$200 million to US$250 million as part of a push to sell more merchandise directly to consumers.
The Goodyear facility, acquired for US$70 million, previously drew controversy. Last year, Arizona Governor Doug Ducey threatened to rescind up to US$1 million in financial incentives for the project after Nike recalled a controversial Fourth of July-themed shoe. The sneaker featured a U.S. Revolutionary War-era flag known as the Betsy Ross — a symbol embraced by some far-right groups.
“Instead of celebrating American history the week of our nation’s independence, Nike has apparently decided that Betsy Ross is unworthy,” Ducey, a Republican, said at the time. He later changed his tone and said he would “welcome Nike to our state.”
Nike has other Air MI plants in Missouri and Oregon, where the company is based.
“We thank the city of Goodyear and the team we have worked with to date,” Nike said on Tuesday. “They have been outstanding partners.”