Nike will “no longer be investing” in a Goodyear manufacturing facility that was supposed to bring more than 500 jobs and nearly $500 million in economic impact to the southwest side of metro Phoenix, the company announced on Tuesday.
Nike in a statement said the COVID-19 pandemic was to blame for the decision.
“We are experiencing unprecedented times and due to the COVID-19 impact we will no longer be investing in our Goodyear facility,” Nike said in a statement to The Arizona Republic. “We are repositioning our resources to further invest against our biggest opportunities and Air MI (manufacturing innovation) will continue to be an important part of Nike’s growth strategy. We thank the City of Goodyear and the team we have worked with to date; they have been outstanding partners.”
Goodyear spokesperson Tammy Vo said in a statement that the city was looking forward to the facility opening, but understands that the pandemic and economic recession have hurt business.
“The city of Goodyear was very much looking forward to the opening of the Nike facility in our great city,” Vo wrote. “While we are disappointed, we recognize and appreciate the many challenges and difficult decisions businesses are faced with as a result of current economic realities.”
The company would not say how many employees will be affected by this decision, what it plans to do with the facility or whether it has plans to move production elsewhere.
Nike paid nearly $70 million for the building near the Phoenix Goodyear Airport. The company expected to be in the building on June 1 and be fully operational within another three and a half years, according to city documents. It was the athletic apparel giant’s third U.S. manufacturing facility and was focused on manufacturing the “mid-sole cushioning portion of its athletic shoes,” according to city documents. The facility never opened.
Goodyear, a suburb of some 85,000 residents southwest of Phoenix off Interstate 10, first approved plans for the manufacturing facility in July 2019 in a lively City Council meeting.
Representatives from Nike showed sneakers off to the mayor and council members, who took turns passing around the shoes. Mayor Georgia Lord quipped that she would soon have to trade her uncomfortable heels for a pair of Nikes.
Goodyear promised to waive up to $1 million in plan review and permit fees and reimburse Nike another $1 million for the jobs it would bring. In return, Nike would bring 505 jobs and invest $184.5 million in the property, city documents said.
Over the course of five years, city leaders expected the plant to create $483 million in economic impact.
The facility was wrapped in controversy within hours of gaining Goodyear City Council approval in 2019.
Gov. Doug Ducey in the wee hours of the morning after the City Council vote posted a fiery Twitter thread taking aim at the company for pulling a shoe that featured a version of the American flag designed by Betsy Ross. His tweets said that “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.”
Ducey said he was stripping the company of $1 million in state incentives.
In the hours after his early-morning tweets, Goodyear city staffers left their offices in City Hall for Lord’s home in a gated community, where they hunkered down and prepped a “video statement” they would post on social media and send to reporters.
In it, Lord said the city was “in the middle of a difficult situation” and that she “can appreciate” the discussion around the project. Lord stood her ground and said the city would honor its side of the deal with Nike. Nike announced it was still coming to Goodyear.
Nike’s decision means hundreds of promised jobs will evaporate and a big-name employer is falling through, but it’s not the end of the world, one advocate says.
Sintra Hoffman, president and CEO of the West Valley business and economic development group Westmarc, said the West Valley still has several other high-profile employers with robust workforces that serve as a draw for other companies to set up shop west of Phoenix.
“It’s tragic that it happened, but I don’t think we have anything to worry about as a region,” she said.
Even as Arizona and the rest of the country grapple with the economic fallout of the pandemic, big-name employers continue to come to the region, she said.
The Loop 303 business corridor continues to grow with big names such as UPS and Dick’s Sporting Goods. Microsoft started construction on data centers in Goodyear and El Mirage. Glendale recently inked deals for White Claw and Red Bull facilities. Amazon in July bought a large chunk of land in Goodyear for nearly $20 million. International discount grocer Aldi announced it would open two West Valley stores by the end of the year.
Those developments are cause for hope, Hoffman said.
“They (Nike) were not the first big name that came to the West Valley … every time I drive on the freeway, there’s something new happening in that area,” she said. “While this is disappointing … this is not a devastating thing.”