JAKARTA, Aug. 20 2002 (AP)--Banging cans and waving anti-Nike banners, about 4,000 workers staged a peaceful protest Tuesday in the Indonesian capital over the footwear company's plans to cut back production.

Angry workers in recent weeks have staged a serious of protests over plans by Nike Inc. (NKE) and Reebok International Ltd. (RBK) to terminate contracts with local producers. One such protest featured the burning of a giant Reebok shoe.

Workers at Nike-contracted factories expect the cutback could cost 7,000 jobs
while those making Reebok products fear 5,400 workers will be laid off.

Protesters clogged traffic Tuesday as they marched through central Jakarta to the U.S. Embassy. Carrying banners, they demanded Nike compensate laid-off workers.

They said Nike's local contractor - PT Doson Indonesia - has offered workers compensation from $66 to $132.

"Nike has no social responsibility," said Rustam Aksam, president of the Indonesian Textile, Garment and Leather Worker's Union. "They are just exploiting the workers, getting their profit and then leaving."

Nike confirmed it will terminate a contract with Doson Indonesia in November. But the company said it will continue to work with 47 other factories that employ 123,000 workers.

It has offered Doson workers continued medical care, loans and training. But it has called on Doson Indonesia to provide other compensation.

"We understand the concerns of Doson Indonesia workers and we have emphasized to the management of Doson Indonesia our expectation that they meet all their obligations to the employees in the event that layoffs occur," said Jeff DuMont, general manager of Nike Inc. Indonesia.

Many foreign manufacturers have moved their operations to Vietnam and China, where productivity is higher and wages are lower.