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Nike keeps plans for Arizona factory despite controversy

Key Points
  • Nike announced Thursday it's going forward with plans to make soles for Nike Air shoes in a Phoenix suburb.
  • This comes after Arizona Gov. Doug Ducey blocked state money for the facility when the company pulled a flag-themed shoe from the market.
  • The shoemaker did not address the controversy in announcing its plans for a $184 million factory with at least 500 jobs in Goodyear.
Nike shoes are displayed at a Nike Store on August 10, 2018 in San Francisco, California. 
Justin Sullivan | Getty Images

Nike announced Thursday it's going forward with plans to make soles for Nike Air shoes in a Phoenix suburb even though Arizona Gov. Doug Ducey blocked state money for the facility when the company pulled a flag-themed shoe from the market.

The shoemaker did not address the controversy in announcing its plans for a $184 million factory with at least 500 jobs in Goodyear.

Despite his earlier criticism, Ducey welcomed Nike to Arizona on Thursday.

"This is good news for Arizona and for @GoodyearAZGov," he wrote on Twitter. "500 plus jobs. Over $184 million in capital investment. Arizona is open for business, and we welcome @Nike to our state."

Nike faced criticism last week for its decision not to sell the Nike Air Max 1 USA shoe, which included a Revolutionary-era emblem known as the Betsy Ross flag.

Nike pulls its sneaker showing the Betsy Ross US flag.
Source: Nike

Former NFL quarterback Colin Kaepernick, who has a high-profile endorsement deal with Nike, told the company the flag recalls an era when black people were enslaved and that it has been appropriated by white nationalist groups, a person familiar with the conversation told The Associated Press last week.

"Arizona's economy is doing just fine without Nike," Ducey wrote on Twitter. "We don't need to suck up to companies that consciously denigrate our nation's history."

He said he's "embarrassed for Nike," called its decision "a shameful retreat" and ordered the Arizona Commerce Authority to withdraw a grant of up to $1 million.

But Nike will still get more than $2 million in tax breaks from the city of Goodyear, where Nike said it will begin work on the facility later this year and begin making soles in 2020. It will be the third U.S. manufacturing center for Nike Air.

The company, based in Beaverton, Oregon, recently expanded plants in its home state and Missouri.

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Key Points
  • Arizona Gov. Doug Ducey said Tuesday in a tweet that he will order the state's commerce authority to withdraw all financial incentive dollars for Nike to locate in the state.
  • On Monday night, Nike said it would pull sneakers featuring an early American flag designed by Betsy Ross in celebration of the July Fourth holiday.
  • The decision followed a complaint from former NFL football player Colin Kaepernick, who pointed to the flag's use during a period of slavery, The Wall Street Journal reported Monday. There also have been reports of the flag's use by extremist groups, according to the paper.
  • "It is a shameful retreat for the company. American businesses should be proud of our country's history, not abandoning it," Ducey wrote on Twitter.