Penn State suspends Adidas contract over missed severance pay

(State College) -- Penn State has suspended its licensing contract with Adidas, saying the apparel company owes severance pay to 2,600 workers who lost their jobs when an Indonesian factory closed.

The university says it will terminate the contract if the company doesn't pay the severance within 60 days.

A Penn State student group had said it would protest if the university didn't take action by yesterday.

Penn State President Rodney Erickson informed Adidas of the suspension in a letter yesterday to Bob Leuenberger, of Adidas Team Sport, in Iowa. Leuenberger did not respond to an email message from The Centre Daily Times.

Erickson says Adidas' actions "fall short of our expectation for fair, just and humane behavior.''