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Arizona Gov Rescinds Nike Factory’s $1M Subsidy Over ‘Betsy Ross Flag’ Shoe Controversy

Arizona governor Doug Ducey announced today that he is withdrawing a $1 million incentive in tax breaks for Nike’s planned U.S. manufacturing center in the state after the sportswear brand pulled its USA-themed Air Max 1 Quick Strike Fourth of July sneaker.

“Words cannot express my disappointment at this terrible decision,” the Republican wrote in a series of tweets. “I am embarrassed for Nike.” The proposed facility is expected to bring 500 jobs to the city of Goodyear, a Phoenix suburb.

Ducey continued, “Nike has made its decision, and now we’re making ours. I’ve ordered the Arizona Commerce Authority to withdraw all financial incentive dollars under their discretion that the State was providing for the company to locate here.”

Nike’s expected impact to the city’s economy has been estimated by the city council to bring in $483 million over a period of five years.

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Even so, Ducey told his followers that the state is doing so well that it doesn’t need jobs and money generated by Nike. “Arizona’s economy is doing just fine without Nike,” he explained. “We don’t need to suck up to companies that consciously denigrate our nation’s history.”

The sneakers were shipped in advance of the holiday and were supposed to retail at $120 on Nike.com; one pair appeared on StockX.com for $2,500 on Tuesday, but is no longer available.

The footwear featured an early design of the United States flag representing the 13 original colonies. Commonly referred to as the “Betsy Ross flag,” it was created by Ross, an upholsterer, in June 1776 during the American Revolution.

Ducey said that Nike “bowed to the current onslaught of political correctness and historical revisionism.”

On Monday, the Wall Street Journal published a report claiming former NFL star Colin Kaepernick, who appeared in a Nike campaign last year, influenced the brand’s decision. The report alleged Kaepernick expressed concerns that the flag’s symbolism and association with America’s history of slavery is offensive to him and others.

Speaking to Footwear News on Tuesday, a Nike representative said it chose not to release the sneakers because “it featured an old version of the American flag.”

Nike and the city of Goodyear created a robust five-year plan that included an investment of at minimum $184.5 million in improvements to a city building; an average salary of $48,514 per year, including overtime and bonuses; and at minimum 65% of employee healthcare premiums.

Goodyear’s mayor Georgia Lord disagrees with Ducey’s decision and plans to move forward with the opportunity.

“We will honor the commitment we made in our agreement,” she said in a statement today. “It has been a focus of the Goodyear City Council to build a strong economy for years to come and we will continue to work hard to bring the kind of high quality jobs that our residents deserve.”

In the original agreement, which was announced Monday, Nike was supposed to receive $3 million in incentives, with the city giving the corporation $2 million in tax breaks and the state providing $1 million. A spokesperson for the city added that Goodyear has “no reason to believe the plans are changing” with Nike.

Nike issued a statement Tuesday citing its support of its “American heritage” and engagement with American athletes, including the U.S. Olympic and U.S. Soccer teams.

“We already employ 35,000 people in the U.S. and remain committed to creating jobs in the U.S., including a significant investment in an additional manufacturing center which will create 500 new jobs,” the company said.

Ducey’s decision comes in contrast to his statement issued last February for plans to attract businesses to the state.

“Not only is Arizona projected to add 165,000 jobs over the next two years, Arizona families are taking home more dollars and incomes are rising at one of the fastest rates in the country… We will continue to focus on advancing Arizona’s business-friendly environment to bring even more jobs and opportunity to our state.”

Full transcripts of Ducey’s statements via Twitter below.

“Today was supposed to be a good day in Arizona, with the announcement of a major @Nike investment in Goodyear, AZ. Words cannot express my disappointment at this terrible decision. I am embarrassed for Nike.

“Nike is an iconic American brand and American company. This country, our system of government and free enterprise have allowed them to prosper and flourish.

“Instead of celebrating American history the week of our nation’s independence, Nike has apparently decided that Betsy Ross is unworthy, and has bowed to the current onslaught of political correctness and historical revisionism.

“It is a shameful retreat for the company. American businesses should be proud of our country’s history, not abandoning it.

“Nike has made its decision, and now we’re making ours. I’ve ordered the Arizona Commerce Authority to withdraw all financial incentive dollars under their discretion that the State was providing for the company to locate here.

“Arizona’s economy is doing just fine without Nike. We don’t need to suck up to companies that consciously denigrate our nation’s history.

“And finally, it shouldn’t take a controversy over a shoe for our kids to know who Betsy Ross is. A founding mother. Her story should be taught in all American schools. In the meantime, it’s worth googling her.”

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