Walmart to Boost Sourcing of U.S. Products by $50 Billion Over the Next 5 Years

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NEW YORK, Jan. 15, 2013 – Walmart today announced bold commitments to increase domestic sourcing of the products it sells and help veterans find jobs when they come off active duty. Speaking at the National Retail Federation’s annual BIG Show, Walmart U.S. President and CEO Bill Simon also announced the company is helping part-time associates who want to be full time, make that transition.

“We want all of our associates to find the career opportunities they want with Walmart,” said Simon. “We will make sure part-time associates have full visibility into full-time job openings in their stores and nearby stores, and that they always have first shot at those jobs. We will also bring more transparency to our scheduling system so part-time workers can choose more hours for themselves.”

U.S. Manufacturing

On domestic sourcing, Walmart and Sam’s Club will buy an additional $50 billion in U.S. products over the next 10 years. The company will grow U.S. manufacturing on two fronts: by increasing what it already buys here – in categories like sporting goods, apparel basics, storage products, games, and paper products, and by helping to onshore U.S. production in high potential areas like textiles, furniture and higher-end appliances.

“At the heart of our national political conversation today is one issue: creating jobs to grow the economy,” said Simon. “We are meeting with our suppliers on domestic manufacturing and are making a strong commitment to move this forward.”

A popular misconception about Walmart is where the majority of the products on its shelves are sourced.  According to data from its suppliers, items that are made here, sourced here, or grown here account for about two-thirds of what the company spends to buy products at Walmart U.S. The company sees room to do more.

To help achieve this commitment, Walmart has created a senior team within the company to lead this effort and it will sign longer term purchase agreements to give suppliers more certainty.

“We can do so much more by working in partnership – as an industry and with governments,” said Simon. “I’ve talked with a number of governors, including the incoming chair of the National Governors Association, Oklahoma Governor Mary Fallin, about how governors and retailers and manufacturers can drive this issue together. Governors from both sides of the aisle are enthusiastic about getting their constituents back to work.”

This summer, Walmart will help convene a manufacturing summit for stakeholders to work together and help accelerate these changes.

Veterans

Beginning Memorial Day, Walmart will offer a job to any honorably discharged veteran in his or her first 12 months off active duty. Most of these jobs will be in Walmart stores and clubs, and some will be in distribution centers and the Home Office.

“Hiring a veteran can be one of the best business decisions you make,” said Simon. “Veterans have a record of performance under pressure. They’re quick learners and team players. They are leaders with discipline, training, and a passion for service. There is a seriousness and sense of purpose that the military instills, and we need it today more than ever.”

Walmart’s pledge is not the end of this effort; it’s the beginning. The company projects it will hire more than 100,000 veterans during the next five years.

“We believe Walmart is already the largest private employer of veterans in the country, and we want to hire more,” added Simon. “I can think of no better group to lead in revitalizing our economy than those who have served in uniform. Through their service, veterans give us a land of freedom. When they return, it must be to a land of possibility.”

Walmart has spoken with the White House about this commitment. The First Lady’s team immediately expressed an interest in working with Walmart and with the entire business community to join forces to build upon this commitment. In the next several weeks, the White House will convene the Department of Veterans Affairs, Department of Defense, and major American employers to encourage businesses to make significant commitments to train and employ America’s returning heroes.

“This is exactly the kind of act we hoped would be possible when we started Joining Forces – a concrete example of our nation’s love and support that our troops, veterans, and their families can feel in their lives every day,” said First Lady Michelle Obama. “As our wars come to an end and our troops continue to come home, it’s more important than ever that all of us – not just government, but our businesses and nonprofits as well – do our part to serve those who have served us so bravely.  So today, my challenge is simple: for every business in America to follow Walmart’s lead by finding innovative solutions that both make sense for their workplaces and make a difference for our veterans and their families.  Given what we’ve seen from Walmart and so many other companies over the past two years, we know that they will.”

Simon also called on the retail industry to work together to provide greater career opportunities for veterans.

“Imagine what retail could do together,” said Simon. “We could leave an incredible legacy as an industry. We can be the ones who step up for our heroes. And we can do this now.”

Click here for Bill Simon’s remarks.

About Walmart
Wal-Mart Stores, Inc. (NYSE: WMT) helps people around the world save money and live better – anytime and anywhere – in retail stores, online, and through their mobile devices.  Each week, more than 200 million customers and members visit our 10,400 stores under 69 banners in 27 countries and e-commerce websites in 10 countries. With fiscal year 2012 sales of approximately $444 billion, Walmart employs more than 2.2 million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy and employment opportunity. Additional information about Walmart can be found by visitinghttp://corporate.walmart.com, on Facebook at http://facebook.com/walmart and on Twitter at http://twitter.com/walmartnewsroom. Online merchandise sales are available at http://www.walmart.com and http://www.samsclub.com.

 

 

All American Clothing Co. Finishes Record Setting Year In 2012

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The All American Clothing Co. has survived a clothing industry that has lost -84% of its labor force since 1995 as according to the U.S. Bureau of Labor Statistics.

The All American Clothing Co. announced today that the company has experienced another record year. In 2012 the USA made clothing company’s annual revenue increased 20% as compared to 2011. This marks the company’s tenth straight year of solid growth. A great sign for American manufacturers in today’s economy.

Due to its success the All American Clothing Co. has moved from a 5,000 square foot facility to a 55,000 square foot facility, doubled the amount of its inventory, and has created many new jobs at their headquarters. The American made clothing company now looks forward to a new year full of surprises in 2013 as they continue to grow and create jobs for American citizens.

About All American Clothing Co.

Lawson Nickol founded the USA Made clothing company in 2002 with a goal to make a difference. His dream was to support USA families and jobs by producing high-quality clothing in the USA at an affordable price. He founded the company with the help of his son BJ and wife Mary Ann Nickol. Together, the Nickol family started their company in the USA to provide jobs and a tax base that ultimately supports communities across the United States.

The All American Clothing Co. has overcome many obstacles to chase the American Dream. The All American Clothing Co. has survived a clothing industry that has lost -84% of its labor force since 1995 as according to the U.S. Bureau of Labor Statistics. The trend of outsourcing has made it tough on the company to compete with companies like them. The recession has kept consumers tight to their wallets and the American economy has been weak. These factors had the odds stacked against the success of the All American Clothing Co. But, with the help of many American Made supporters the has company pushed on.

Today, the Nickol family’s dream holds true. The All American Clothing Co. continues to grow and succeed by selling quality USA made clothing at an affordable price. The company and its supporters continue to create jobs and make a difference. Visit http://www.allamericanclothing.com or follow them onFacebook to help make a difference.

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Made in USA Certified

WTO hands Obama victory in U.S.-China steel case

Reuters/Reuters – A worker checks on coils of steel at a factory in Dalian, Liaoning province

GENEVA/WASHINGTON (Reuters) – The World Trade Organization barred China on Thursday from imposing duties on certain U.S. steel exports, siding with U.S. President Barack Obama in a dispute with Beijing over a type of steel made in two election battleground states.

The case involved duties imposed by China on “grain-oriented electrical steel,” which is used in the cores of high-efficiency transformers, electric motors and generators. The steel is made by AK Steel Corp of Ohio and ATI Allegheny Ludlum of Pennsylvania.

Although the specialty steel case is tiny compared with other trade disputes with Beijing, the WTO ruling gave Obama a timely win as he defends himself against accusations by his Republican opponent, Mitt Romney, that he is soft on China.

“Today we are again plainly stating that we will continue to take every step necessary to ensure that China plays by the rules and does not unfairly restrict exports of U.S. products,” Obama administration trade representative Ron Kirk said in a statement.

China’s Ministry of Commerce had no immediate comment on the ruling, which arrived late in the evening in Beijing.

When the Obama administration filed the case, the volume of specialty steel trade with China was in the range of $250 million. That pales in comparison with the auto and auto-parts trade at issue in the most recent case Washington filed against China in September. The volume of auto parts trade alone amounted to about $12 billion in 2011, according to the Alliance for American Manufacturing.

Read more of this post

Re-Shoring: Manufacturers Make a U-Turn

Source: Chesapeake Bay Candle
Chesapeake Bay Candle’s U.S. factory in Glen Burnie, Maryland.

By: Chris Morris, Special to CNBC.com
Published: Wednesday, 23 May 2012

Chesapeake Bay Candle never thought twice about offshoring its manufacturing when the company started 17 years ago. To make the product it wanted, each candle had to be handmade, and there was no cost effective way to do that in the United States.

Four years ago, however, the company reversed that thinking, centering its operations domestically, and betting that as the global economy changes, the move will actually save it money.

Chesapeake Bay, with a factory in Glen Burnie, Md., is hardly alone in rethinking its manufacturing plans these days. More and more American firms are bringing those operations home — and while it might be a little premature to call this “re-shoring” effort a movement, it’s certainly starting to become a trend.

President Barack Obama, in his State of the Union speech, noted that American manufacturers created new jobs in 2011 for the first time since the late 1990s. In a recent survey by MFG.com, an online marketplace that helps businesses find manufacturers for their products, 40 percent of the manufacturing firms it polled said they had benefited from work that had previously been sourced to a supplier in another country.

“[Consumer’s] desire to customize products is become more and more ravenous,” saysMitch Free, founder of MFG.com. “In order to stay relevant, [companies] have to be able to adapt very quickly. The way you do that is being somewhat close to your market. Instead of producing a big lot overseas and shipping it [here], companies can now rapidly assemble supply chains wherever they’re selling the product. They save on logistics costs. They take advantage of the local currency. And they generate good will in the market.”

MFG isn’t the only study that has pointed to an increase in re-shoring. A survey by the Boston Consulting Group in February found more than one-third of U.S.-based manufacturing executives at companies with sales greater than $1 billion are either planning or considering bringing production back to the United States from China.

Key Points

  • Wages in China are climbing at 15 to 20 percent a year, according to Boston Consulting Group
  • Speed to market is becoming more critical, as companies keep lower inventories.

“Companies are realizing that the economics of manufacturing are swinging in favor of the U.S., for goods to be sold both at home and to major export markets,” said Harold L. Sirkin, senior partner at the company. “This trend is likely to accelerate starting around 2015.”

For Chesapeake Bay, it was less a matter of customization as it was cost control.

The candle company originally based its manufacturing in China, but as anti-dumping laws (designed to prevent predatory pricing) began to impact duty rates, Chesapeake Bay took its operations to Mexico.

Unhappy with the manufacturing ecosystem there, it tried a few other countries, eventually landing in Vietnam in 2000 — a popular manufacturing hub for companies.

“The Vietnamese population is very young and it’s pretty abundant,” says Mei Xu, Chesapeake Bay’s co-founder and CEO. “The work ethics are very similar to those of the Chinese. They all want to work hard to provide a better life for their children.”

Labor costs, however, are on the rise in countries like China and Vietnam. BCG says wages in China are currently climbing at 15 to 20 percent per year, due to the demand for skilled labor. The group expects net labor costs for China and the U.S. to converge in the next three years.

Xu notes that Vietnam closely follows China’s lead on issues like salary and benefits. Today, the average salary for a manufacturing employee in the country is between $300 and $400 per month.

That’s still well below the $12.50 to $13 per hour employees in the United States can earn, but salaries only make up 20 to 30 percent of a product’s total cost according to BCG.

Other factors, meanwhile, such as shipping are seeing prices increase as well, due to rising oil prices. Xu says Chesapeake Bay noticed some shipping companies cutting back their overseas routes as well, which threatened the company’s turnaround time.

That speed to market is more critical today than ever as companies keep lower inventories on hand as a precautionary measure.

“When the economy was strong and the sales of product companies were strong, they were placing big orders offshore,” says Free. “They’d order a billion widgets and they’d get them shipped here. When the recession hit, they were stuck with that inventory, and that hit their profit margins pretty quickly. They knew it would cost more [to place smaller orders domestically], but it was a less risky capital outlay. And if consumer demand turned, they wouldn’t be stuck holding a lot of inventory they would have to eat.”

Meanwhile, advances in technology domestically have made it easier to be competitive with overseas companies.

“We have some new machinery and new methods that can be more competitive with China,” says Bruce Brandel, president of The Packaging Team, which supplies blister packaging for consumer product goods. “We’re starting to see people who moved to Mexico or China say ‘If you look at the total picture and cost, it’s not much of an advantage — and maybe a disadvantage — to be there’.”

For The Packaging Team, the degree of that competitiveness varies by product and order size, but the savings comes from new equipment Brandel says increases the speed of sealing packages ten-fold.

“If you’re spending $2 an hour there, you should be able to spend $20 an hour here with the machinery making up the difference,” he says. “Also, there are what I call soft costs [that go with offshoring]. Things like lost opportunities, being unable to meet timelines or dealing with late deliveries. What does that cost you?”

There are risks to re-shoring, too. Xu says Chesapeake (which has since transitioned to machine-filled candles) spent $5 million to secure a large factory in Maryland when it moved manufacturing here. That plant spans 125,000 square feet and can produce up to 2,000 candles per hour. But right now, it’s not being used to capacity.

The ability to ship product in two weeks versus six or seven is certainly beneficial, but there are overhead concerns. Xu notes that she remains optimistic, though. The number of people required on the manufacturing line is significantly lower in the U.S., which helps lower costs, she says.

Right now, the cost to make a candle in the U.S. is approximately the same as it is to make one in Vietnam, but Chesapeake says its betting it will see notable savings in the future, given the rising salary trends and fuel prices.

Despite what many people might think, capitalizing on the “Made in USA” movement is less of an incentive for many companies.

“In my opinion, there’s only one thing that runs corporations today, and it ain’t pride, it’s all dollars,” says Brandel. “[Made in America pride] is a good concept, but if the dollars don’t make sense, it isn’t going to happen. And maybe that’s the way capitalism is supposed to work.”

Even U.S. consumers don’t seem to be as passionate about it as many claim — though, ironically, there’s a notable demand for U.S.-made products in overseas markets — including China.

“If my Chinese consumers are asking for ‘Made in USA’ product, wouldn’t my U.S. customers do the same and pay a bit more?” says Xu. “Our [U.S.] customers, our buyers, are saying they value [an item that is] made in the U.S.A. if it’s the same price. … If it’s more expensive [at retail], there’s a pain threshold and we don’t know what it is — how much more they’ll pay.”

© 2012 CNBC.com
Email us at:  info@usa-c.com and follow us on twitter @usacertified @madeinusacert

FDA Says Brazil’s Orange Juice Is Safe, But Still Illegal

 

Antonio Scorza/AFP/Getty Images Oranges for sale at a market in Rio de Janeiro.

Antonio Scorza/AFP/Getty Images Oranges for sale at a market in Rio de Janeiro.

NPR      by DAN CHARLES  February 22, 2012

If you happen to notice sometime later this year that you’re suddenly paying a lot more for orange juice, you can blame America’s food safety authorities. The U.S. Food and Drug Administration, after several weeks of deliberation, has blocked imports of frozen, concentrated orange juice from Brazil, probably for the next 18 months or so, even though the agency says the juice is perfectly safe.

The FDA’s explanation is that its hands are legally tied. Its tests show that practically all concentrated juice from Brazil currently contains traces of the fungicide carbendazim, first detected in December by Coca-Cola, maker of Minute Maid juices. The amounts are small — so small that the U.S. Environmental Protection Agency says no consumers should be concerned.

The problem is, carbendazim has not been used on oranges in the U.S. in recent years, and the legal permission to use it on that crop has lapsed. As a result, there’s not a legal “tolerance” for residues of this pesticide in orange products. Read more of this post

How to Save U.S. Manufacturing Jobs

By Howard Wial @CNNMoney February 23, 2012: 5:34 AM ET

Howard Wial is a fellow for the Brookings Institution Metropolitan Policy Program.

At first glance, manufacturing jobs would appear to be a dying breed.

The United States lost 6 million manufacturing jobs between early 2001 and late 2009. And despite small gains during the last two years, the trend in manufacturing employment for the last 30 years has been downward.

That has led some to argue that long-term job loss in the industry is inevitable. But our research shows otherwise.

There are two common versions of the “inevitability” argument. One holds that U.S. manufacturing wages are too high to be internationally competitive. The other maintains that manufacturing job losses are the result of productivity growth. Both arguments are wrong. Read more of this post

How To Invest For Jobs Coming Back To U.S.

Brian Sozzi, Contributor   2/16/2012

The grand theme I want to put on the table is the concept of onshoring, sometimes called reshoring, which is the bringing back of U.S. jobs from overseas supply chains.

U.S. businesses have started to realize that while workers in far away lands garner miniscule wages compared to their U.S. counterparts, having operations outside of the country can be a strategic disadvantage.  The speed and structure in which information is consumed has caused U.S. consumers to demand top quality products and to want to buy them whenever they please.

Having a manufacturing plant domestically aids in the quicker movement of goods from design table to sales floor.  Furniture maker Ethan Allen is great example of a manufacturer producing most of its products in the U.S. and doing customization for clients, setting itself apart from price-point focused competitors.

Corporate managers are simply getting over their infatuation with cheap international labor and analyzing the total costs of doing business in the U.S. compared to say, China or India.

There is a dollop of icing on the cake here as well.  The topic of focusing on onshoring to boost employment levels seems to be an area of agreement between bickering Republicans and Democrats.  Republican presidential hopeful Rick Santorum, for example, wants to zero out the U.S. corporate tax for manufacturers.

Anytime the major political parties agree on anything, even the slight thing, it’s cause to sit up and take notice from an investment standpoint.  The Donkeys and Elephants may be a little apart on how to precisely shepherd along the corporate onshoring interest, but at least they are talking the same language.  It’s high time they do find common ground if the following is to be reversed:

  • Manufacturing employment has fallen by approximately 37% since 1980.
  • According to a survey done by the Manufacturing Institute and Deloitte, some 600,000 manufacturing jobs are currently unfilled due to a mismatch between job requirements and experience.

I have read a fair number of columns bantering about onshoring.  Is it overhyped?  Do we really need more jobs in the service sector U.S. economy?  The debates are almost endless.  Unfortunately, though, I have failed to stumble upon investment strategies to profit from onshoring, which has already begun to a certain extent, and could likely gain steam in the years ahead.

Buy-and-hold investors, this should be right in your wheelhouse: a highly probable future event to build positions around in companies with durable competitive advantages.

A few names that come to mind:

  • Waste Management: Owns 260 plus landfills and is the largest waste management business in the U.S.  More manufacturing production means more waste to be piled into the company’s green bins.
  • ADP: Benefits in two manners.  First, workers are hired to run new domestic manufacturing plants (hopefully by people that used the downturn to attain new technological skills).  Second, there should be a trickle down effect in the overall employment sector via a ramp in higher paying manufacturing jobs.
  • Dunkin Brands: “America Runs on Dunkin” as the brand’s slogan goes.  The company’s moat is not as wide as an ADP or Waste Management, but more U.S. manufacturers should mean more egg sandwiches (which Starbucks does not do superbly) and coffee.  Store penetration is increasing in areas of the country that are manufacturing oriented.

This Column Was 100% Made in America

A Hyundai ad that ran during Super Bowl coverage showed workers from the company's plant in Montgomery, Ala.

A Hyundai ad that ran during Super Bowl coverage showed workers from the company's plant in Montgomery, Ala.

By   Published: February 15, 2012

BLUE-COLLAR workers in fields like manufacturing — particularly when they make products on American soil — are again becoming a favorite subject for white-collar workers on Madison Avenue.

The trend was born of the economic worries that followed the financial crisis in 2008. Recently, it is gaining steam — appropriate, since the ads often use blasts of steam to signal something is being built — with proposals in Washington to offer incentives to encourage the location or relocation of factories in the United States.

“We continue to see very heavy emotional response to anything that would leverage against the bad economy,” said Robert Passikoff, president at Brand Keys, a brand and customer-loyalty consulting company in New York. Read more of this post

Obama Takes Fresh Aim at China, Touts “Insourcing”

 

ReutersBy Laura MacInnis | Reuters

MILWAUKEE (Reuters) – President Barack Obama kept up his attack on Chinese trade practices during a campaign-style visit on Wednesday to a Midwest factory, where his call to bring jobs back home was intended to resonate with voters in an election year.

The day after meeting China’s leader-in-waiting, Vice President Xi Jinping, at the White House, Obama cited America’s chief rival a number of times in a speech to promote the potential of “insourcing” jobs back to America from overseas.

“I will not stand by when our competitors don’t play by the rules,” he told workers at Master Lock, a company he lauded in his State of the Union address last month for having moved back about 100 union jobs from China since mid-2010.

“That’s why I directed my administration to create a Trade Enforcement Unit with one job: investigating unfair trade practices in countries like China,” he said in prepared remarks.

Obama took a firm line over trade on Tuesday during his Oval Office meeting with Xi, who is in line to assume the Chinese presidency in March 2013.

This tough stance should appeal to voters in election battleground states like Wisconsin, where Beijing is often blamed for killing American jobs.

Republican presidential hopeful Mitt Romney, a former private equity executive, accuses Obama of being too soft on China and lacking the executive or other leadership experience to steer the U.S. economy toward lasting recovery.

Master Lock, a unit of Fortune Brands Home & Security, is the world’s largest manufacturer of padlocks and related products to secure homes, cars and bicycles. Its story is a positive one for Obama, who must tout his economic leadership to secure another White House term.

The firm says its Milwaukee plant is running at full capacity for the first time in 15 years – an example the White House is eager to replicate as the November 6 election nears.

“They’re deciding that if the cost of doing business here is no longer much different than the cost of doing business in countries like China, they’d rather place their bets on America,” said Obama.

It was his first stop in a three day campaign-style swing when the Democrat will raise funds in California and stop at aircraft manufacturer Boeing in Washington state.

How to cope with a rising China – and compete against cheap Chinese exports – is one of the toughest challenges for Obama to navigate as the election approaches, particularly as opinion polls showing rising U.S. voter frustration with the Asian economic powerhouse.

(Reporting By Laura MacInnis; Editing by Peter Cooney and Cynthia Osterman)

Can Manufacturing Jobs Come Back? What We Should Learn From Apple and Foxconn

business
The Huffington Post

David Paul – President, Fiscal Strategies Group  –  Posted: 02/13/2012 8:30 am

Apple aficionados suffered a blow a couple of weeks ago. All of those beautiful products, it turns out, are the product of an industrial complex that is nothing if not one step removed from slave labor.

But of course there is nothing new here. Walmart has long prospered as a company that found ways to drive down the cost of stuff that Americans want. And China has long been the place where companies to go to drive down cost.

For several decades, dating back to the post World War II years, relatively unfettered access to the American consumer has been the means for pulling Asian workers out of deep poverty. Japan emerged as an industrial colossus under the tutelage of Edward Deming. The Asian tigers came next. Vietnam and Sri Lanka have nibbled around the edges, while China embraced the export-led economic development model under Deng Xiaoping.

While Apple users have been beating their breasts over the revelations of labor conditions and suicides that sullied their glass screens, the truth is that Foxconn is just the most recent incarnation of outsourced manufacturing plants — textiles and Nike shoes come to mind — where working conditions are below American standards. Read more of this post

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