Arizona governor yanks Nike tax breaks over flag shoe flap

Friday, June 28, 2019, Vol. 43, No. 26

PHOENIX (AP) — Arizona Gov. Doug Ducey said Tuesday that Nike cannot get state money for a planned factory in a Phoenix suburb after a report that the athletic company pulled an American flag-themed shoe from the market.

It was not immediately clear if the move, which Ducey announced on Twitter at 2 a.m., would derail Nike's plans for a $185 million factory in Goodyear. Ducey's tweets were published hours after the Goodyear City Council approved more than $2 million in tax breaks over five years, but the governor has no control over those incentives.

The Wall Street Journal reported that Nike pulled a shoe with a colonial-era U.S. flag with 13 white stars in a circle, known as the Betsy Ross flag. The Journal reported that former NFL quarterback Colin Kaepernick, who has a major endorsement deal with Nike, told the company he and others found the flag symbol offensive because of its connection to the slavery era.

A wave of protests by NFL players began in 2016 after Kaepernick kneeled during the national anthem to call attention to police brutality and racial inequality. The protests grew into one of the most polarizing issues in sports, with President Donald Trump loudly urging the league to suspend or fire players who demonstrate during "The Star-Spangled Banner."

Kaepernick, who has not played in the NFL since the 2016 season, later appeared in a TV advertisement for Nike.

The company planned a $185 million factory to build mid-sole cushioning for athletic shoes in the fast-growing Phoenix suburb, according to Goodyear city documents. The company agreed to hire at least 505 full-time employees making an average of more than $48,000 a year plus benefits.

"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" and called its decision "a shameful retreat."

Goodyear City Council did not immediately comment on his tweets.

Ducey ordered the Arizona Commerce Authority to withdraw a grant of "up to" $1 million, said Susan Marie, executive vice president of the state's economic development agency. No money had changed hands, she said.

The move was an unusual dive into a contentious cultural fight for the second-term Republican governor and former chief executive of ColdStone Creamery who prides himself on a pro-business agenda and regularly boasts about the growth of jobs during his tenure.