Wal-Mart pushes 'made in America' at summit

ORLANDO, Fla. (AP) — Wal-Mart Stores Inc. spearheaded an effort Thursday to bring together retailers, suppliers and government officials so they can figure out how to bring more manufacturing jobs to the United States.

The world's largest retailer hosted its first two-day U.S. Manufacturing Summit in Orlando, hoping to capitalize on the company's recent commitment to drive more manufacturing in the U.S. The "made in the USA" campaign could boost Wal-Mart's image, which is constantly under attack by labor-backed groups who have criticized the retail behemoth as a destroyer of U.S. jobs rather than a creator.

The goal of the summit was to start "connecting the dots" with a dialogue among the 500 manufacturers, officials from three dozen states, eight governors and U.S. Commerce Secretary Penny Pritzker at the conference, said Bill Simon, president and CEO of the company's U.S. division.

"It could be difficult for one at a time, all of us on our own," Simon said. "The best way to overcome the challenges is to talk to one another."

The summit comes seven months after the Bentonville, Ark.-based discounter pledged that it planned to buy $50 billion more U. S. made goods over the next decade. That's the equivalent of just more than 10 percent of what Wal-Mart will sell at retail this year. Wal-Mart said that if other merchants do the same, it would mean an additional $500 billion in American-made goods over the next decade.

Several companies were quick to get into the spirit at the summit. Kevin Toomey, president and CEO of Kayser-Roth Corp., a North Carolina-based legwear manufacturer, said his company would create over 100 jobs with a $30 million investment, and sock manufacturer Renfro Corp. announced a $10 million investment would bring 195 U.S. jobs.

Jeff Immelt, chairman and CEO of General Electric Corp., announced that the company would be bringing 150 manufacturing jobs to plants in Illinois and Ohio where high-efficient lighting will be built. The $30 million investment will be at plants in Circleville, Ohio; Bucyrus, Ohio; and Mattoon, Ill.

"We wanted to be a part of this," Immelt said. "This is a first step."

To be sure, even if Wal-Mart is successful in getting key retailers and suppliers on board, experts say it won't rejuvenate the U.S. manufacturing industry. But the movement could help stem the tide of jobs flowing to China and elsewhere that has been occurring in the last two decades.

Some experts are skeptical, pointing out that Wal-Mart led the migration of manufacturing jobs overseas in search of the cheapest labor, veering away from the principles of its late founder Sam Walton, who espoused buying American-made goods.

In fact, Burt Flickinger III, president of retail consultancy Strategic Resource Group, says what will be brought back will only be a fraction of business sent overseas.

"It's a very positive PR move for the company," Flickinger said. "But it took two decades to unwind the American manufacturing base and it will take two decades to bring it back."

This is not the first time that Wal-Mart has pledged a made-in America campaign. It pushed a similar program in the mid-1990s that fizzled because it couldn't get enough low-priced goods to sell to its low-income shoppers. But executives vow its efforts this time around go well beyond a marketing campaign and involve dissecting each of its 1,300 product categories, from bath towels to gadgets, to determine which can be made here.

It's also reaching out to state and local officials to work with suppliers to explore rebates, training and other programs to attract U.S. makers. Additionally, the discounter also says it's changing the way it does business with suppliers, giving multi-year commitments for basic goods where it makes sense, instead of season-by-season ordering.

Rebuilding U.S. manufacturing jobs is resonating even more these days. The nation's unemployment rate of 7.4 percent, while now at a 4 1/2-year low, is still well above the 5 percent to 6 percent typical of a healthy economy.

Meanwhile, Wal-Mart and other major retailers have been under fire for not doing a better job monitoring worker safety in factories overseas. That pressure increased after a factory collapse this past spring in Bangladesh, killing 1,129 people. That was the deadliest incident in the history of the garment industry.

But what could really propel the movement this time around is pure economics: Labor costs are rising in Asia, while oil and transportation costs are high and increasingly uncertain.

Rising wages have erased some of the competitive advantages China had in manufacturing, Wal-Mart's Simon said, and manufacturing jobs offer a path into the U.S. middle class.

"We think we can map out opportunities and put some systems in place and commit to this for the long term," Simon said. "There's nothing less than the future of our country at stake here."

Wal-Mart said several manufacturers had told executives privately they had defined "tipping points" at which making goods overseas will no longer make sense. Wal-Mart says it doesn't believe that its customers should pay any more for made-in-America goods and is focusing on working with suppliers to make sure the prices are in line with what shoppers want to pay.

"It's an economic advantage when you have the wind in your back, instead of having the wind in your face," said Hal Sirkin, a senior partner and managing director at the Boston Consulting Group and an expert on manufacturing. He is serving as a consultant to Wal-Mart. He believes that the movement could create 100,000 more jobs in the next decade.

Wal-Mart, with more than 4,000 stores in the U.S. and about $460 billion in total sales, has proven that it has the clout to get other suppliers and merchants on board. For example, in 2009, Wal-Mart created a coalition among stores, suppliers, government, nonprofit organizations and academic experts for a sustainability index that measure whether goods were made in a responsible way and whether the materials are safe.

Wal-Mart has said that items made, sourced or grown in the U.S. account for about two-thirds of the company's spending on products for its U.S. business, according to data given by suppliers. But analysts say that much of its clothing, home furnishings and consumer electronics are made elsewhere.

One company to sign up is Sleep Studio, which is now working with Wal-Mart to produce memory foam mattress toppers. Before, all of the discounter's toppers were produced by manufacturers overseas. This year, 20 percent will be made in the U.S.

CEO Michael Rothbard said Wal-Mart worked with the company to streamline the costs, eliminating $10 from the price tag. The New York-based company has factories in California and Georgia.

"The selling process was really intense," Rothbard said. "We had to convince them our products offered unique benefits, and that we could meet their needs."

Associated Press

Wal-Mart U.S. President and CEO Bill Simon addresses attendees of the Wal-Mart U.S. Manufacturing Summit in Orlando, Fla., on Thursday.

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Comments

Gerry Thompson's picture

Walmart

will still see very few of my dollars. I spend less than $100 a year there

David  Cote's picture

No trips to Walmart for my family...

We boycotted the chain ever since the tragic incident in a New Jersey Walmart in which a store employee was trampled to death by a mob of frenzied black Friday shoppers. The store reopened just a couple of hours later and it was business as usual, like it never happened. A lot of businesses have gone under due to Walmart's business practices and the public's gullibility in believing that purchasing cheaply made items at a lower cost somehow gives them an advantage.

Mike Lachance's picture

Wolf pushes 'Herd the Sheep'

Wolf pushes 'Herd the Sheep' at Local Co-Op...

Well, I suppose this is a start. Better than doing nothing, but I loathe the sheer quantity of Chinese goods at Wal-Mart. I would have thought L.L.Bean would have got this message first, but theyre selling the same Chinese crap Wal-Mart sells at 250% mark-up.

If Wal-Mart can actually help this US Manufacturing problem I will be pleasantly surpised.

What Chinese crap?

What "cheap chinese crap" are you talking about? No, not everything at Bean is US made, but the clothing, whether it's made in Vietnam, Indonesia, or maybe even China is high quality and miles better than anything you'll find in WalMart. And the boots, Boat'n'Totes, and dog beds are made in Brunswick (the latter by my wife).

Let's not forget that before Sam Walton died, WalMart proudly touted "Made in America" in its advertising. After he died, the ads disappeared and so dd the American made goods. Funny that they're courting American manufacturing now, when it was their own aggressive pricing demands on suppliers that drove many of them to start sourcing overseas. Schwinn, for example, moved operations overseas when the highest price Wal mart was willing to pay was more than Schwinn could meet in their US facilities.

Mike Lachance's picture

Wayne, Bean's clothes

Wayne, Bean's clothes generally suck. Why do I know this? Because I've bought or been gifted a ton of it over the last 10 years. $70 shirts that fray and fall apart within a year? No thanks. I have a Bean flannel I found at a yard sale in 2006- it was like new and dated from the 1980's or early 90's... that thing is still goin strong, made in Freeport, Maine. The Chinese CRAP is just that. The stuff made in VietNam, Indonesia, Sri Lanka, The Phillipines, or anywhere else Leon's grandkids can save a nickel do not compare... and what more, it wouldn't be so bad if the prices reflected the quality. They don't.

I bought my son a rod and reel last Summer for his birthday. I swallowed what I assumed was just pride and bought the Made in China reel. No more than (4) backyard practice sessions and the damned casting release button fragged itself to bits. Never even got to a river or lake. Crap. For that junk id rather go to Wal-Mart and not get ripped off as badly. It *is* the same junk.

Yes, some items at Bean's are still made in Maine, but you literally have to hunt for them. They are few and far between. A few boots, some balsam pillows, trinkets, nik-naks, jams and jellies. Woo hoo.

Regardless, I wholeheartedly agree with you regarding Wal-Mart before Sam's passing. "Made in USA" was their tagline. It was an amazing success story, but, like Leon Leonwood before him, Sam's store was sold down the river after his demise.

Perhaps with the wages and standard of living skyrocketing in China things will begin to come back... perhaps... we can at least be hopeful.

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