WalMart Helped Push Manufacturing Overseas

Walmart Made in china, Not Made in USA

Now it wants to reverse that. The company is two years into a 10-year plan to buy $250b more in products from American factories. Read more of this post

TINA.org Reports Walmart’s Made in USA Mess to FTC

07-17-15 TINA Reports Walmart to FTC
Company website still riddled with false and deceptive made in USA representations

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Walmart Suppliers Grapple With ‘Made in USA’ Labels

Walmart suppliers grapple with challenge of 'Made in USA' labels

Jack Sloan waits to pitch plastic travel mugs to a Walmart buyer at the retailer’s Bentonville, Arkansas headquarters July 7, 2015. Photo Credit: REUTERS/Nick Carey

Detroit Quality Brushes is a company that does just what its name suggests: It makes high quality brushes in Detroit. Read more of this post

Report Finds 100+ Walmart.com Products Labeled “Made In U.S.A.” That Were Made Elsewhere

By June 29, 2015

Story-Image-1.3While there is no official review process required for labeling a product as “Made in the U.S.A.,” a company can get into legal trouble for misusing that label, as doing so may constitute false advertising. A new report from an advertising watchdog group claims that Walmart’s website has more than 100 examples of products incorrectly marketed as made in America.

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Walmart.com Riddled with Deceptive Made in USA Claims

Walmart.com Riddled with Deceptive Made in USA Claims

MADISON, Conn., June 29, 2015 /PRNewswire-USNewswire/ — Walmart is going all out for American manufacturing, pledging to buy billions of dollars in American products. But an investigation by ad watchdog truthinadvertising.org (TINA.org) into the retail giant’s website has readily uncovered numerous false and deceptive “Made in the USA” claims – issues the company characterizes as “coding errors.” Read more of this post

Walmart’s Bringing Manufacturing Back To The US; But Not The Jobs

 

Walmart's Bringing Manufacturing Back To The US; But Not The Jobs

This is an interesting little story, about how Walmart is encouraging manufacturers to produce within the US for the company.   Read more of this post

Walmart’s ‘Made in America’ push: From offshoring to onshoring

Reuters | Updated On: September 25, 2013 14:12 (IST)

Walmart image

Wal-Mart Stores Inc, whose focus on low-cost sourcing helped to fuel the offshoring of U.S. manufacturing, has been promoting a patriotic new image in recent months.

The Bentonville, Arkansas-based company says it is “leading an American renewal in manufacturing” and “bringing jobs back to the U.S.” with its pledge made in January to buy an additional $50 billion in U.S.-made goods over the next 10 years.

But an examination of the company’s “Made in America” campaign suggests Walmart’s caught on to a reshoring phenomenon that was already underway.

In many cases, Walmart’s suppliers had already decided to produce in the United States, as rising wages in China and other emerging economies, along with increased labor productivity and flexibility back home, eroded the allure of offshore production.

Though wrapped in the stars and stripes, the world’s largest retailer’s push to bring jobs back to the United States also makes business sense both for suppliers and retailers.

Some manufacturers are finding they can profitably produce certain goods at home that they once made offshore. And retailers like Walmart benefit from being able to buy those goods closer to distribution centers and stores with lower shipping costs, while gaining goodwill by selling more U.S.-made products.

“This is not a public relations effort. This is an economic, financial, mathematical-driven effort. The economics are substantially different than they were in the 80s and 90s,” Bill Simon, chief executive of the Walmart U.S. chain, told the Reuters Global Consumer and Retail Summit earlier this month.

The initiative is modest for now. For a company with $466.1 billion in annual sales, an additional $50 billion of spending over a decade will barely register. Also, the main Walmart U.S. unit sells mostly groceries and already procures two-thirds of its goods – including a lot of food – from U.S. sources.

Walmart’s high-profile commitment is, though, an important symbolic shift. A retailer that for decades has prompted hundreds of U.S. companies to move production overseas, thanks to its relentless insistence on cost-cutting, now is urging at least some production back. It will even offer longer-term purchasing guidance to some companies to encourage them.

Hampton Products International did not need Walmart to tell it about the changing cost structure of global commerce. Hampton, which supplies locks and door hardware to retailers including Wal-Mart, began “resurrecting manufacturing” at its Wisconsin plant back in 2008, said CEO H. Kim Kelley.

Walmart’s push this year served mainly to speed its business decision, Kelley said. “We moved much more quickly and aggressively to ramp manufacturing to meet Walmart’s timetable,” he said.

But ultimately, Hampton’s decision to manufacture some products back in the United States was driven by simple but compelling math, Kelley said. Take the example of a door hardware part that Kelley declined – citing competitive issues – to define more precisely than that.

Over the past six years, the price of producing the part in China has risen 24 per cent to $2.20 from $1.77, because of the Chinese currency’s appreciation and increased labor costs. Throw in transport costs and U.S. tariffs, and that product, delivered to the United States today, would cost about $2.53, Kelley said.

By moving production back to the United States, Hampton can make the part today for just $2.16, a nearly 15 per cent saving even including the amortized investment in its new U.S. plant. In addition, Hampton has reduced inventory sitting idle on a ship or in finished goods in its distribution centers.

Relocating production to the United States also yields a number of soft but important benefits, Kelley said. These include better control of the manufacturing process, an ability to respond swiftly to customers, and a much smaller impact on the environment as the U.S. plant uses less energy than its Chinese counterpart and is 7,500 miles closer to where the product is sold.

“The benefits are obvious,” said Kelley. “We cut our costs, improve our sustainability, reduce the cost of finished goods inventory and create U.S. jobs.”

Commitments help some suppliers

Walmart’s push is aimed at product categories that have been difficult to produce at a cost advantage in the United States for some time. The retailer plans to sell everything from General Electric Co light bulbs made in Ohio and Illinois to Element Electronics Corp televisions that will be assembled in South Carolina.

The latest company to sign on is Korona S.A., a Polish candlemaker that will produce Walmart U.S.’s Mainstays tea light candles in Virginia, a move that Walmart said took more than a year to put together.

Walmart still declines to sign long-term contracts with suppliers, but its market power is so immense that companies will sometimes make investments based on expected demand from the retailer. Also, Walmart has helped some suppliers make contact with state economic development officials who can offer tax breaks or other incentives.

Renfro Corp began ramping up U.S. sock production two years ago, said CEO Bud Kilby, sinking more than $10 million into two factories in Tennessee and Alabama and hiring nearly 250 new workers. It is ready to do more now that Walmart has asked Renfro to further expand its U.S. capacity.

Walmart has not given Renfro firm orders associated with the request, but the sock maker is set to invest at least another $10 million and create another 195 jobs, Kilby said.

“We trust them,” Kilby said. “They asked us to do it and they made a commitment to support it and to buy product. But there is no contractual agreement – no purchase orders or anything like that.”

Walmart’s U.S. manufacturing summit in Orlando, Florida in August featured speakers such as Commerce Secretary Penny Pritzker and GE CEO Jeff Immelt. The meeting gave hundreds of suppliers the chance to meet with governors or economic development officials from 34 states, as well as two banks and one private equity firm.

“We can provide the certainty to the people who invest capital, to make it worthwhile,” said Simon, the Walmart U.S. CEO.

Walmart sometimes makes what it calls “multi-year commitments” based on financial data suppliers share.

“It really depends on what they need and how much of their capital expense and their strategic plan they’re willing to share,” said Michelle Gloeckler, senior vice president of Walmart U.S.’s home business and a leading executive on the retailer’s Made-in-America commitment.

When 1888 Mills LLC came to Wal-Mart in 2012, it projected that the cost of making towels in the United States was coming closer to the cost of overseas production. The textiles company felt it could order new machinery to help it reduce the cost differential, but only if it had a multi-year commitment from Walmart, Gloeckler recalled.

Walmart crunched the numbers and agreed to carry 1888 Mills’ “Made Here” towels for an undisclosed number of years. It also agreed to stock 600 stores at first and then add more as production increased, a staged rollout unusual for the chain.

The “Made Here” towels are selling 30 percent better than those they replaced on the shelf that were made outside the United States by another supplier, Gloeckler said.

“Not an aggressive target”

Management consultants began highlighting the benefits of U.S. manufacturing years ago.

With wages rising elsewhere and U.S. energy costs on the decline, the United States can be a competitive manufacturing hub again, says Hal Sirkin, a senior partner of the Boston Consulting Group and co-author of the book “Globality: Competing with Everyone from Everywhere for Everything” who spoke at Walmart’s summit.

“We are seeing a lot of products now that have already reached the point where it is already cheaper to manufacture it and deliver it in the United States than to have it made in China and have it shipped across and pay tariffs and duties,” he said.

It costs slightly more to make a vacuum cleaner in China than in the United States when you add up the cost of labor, buying components and raw materials, overhead, energy costs, shipping and “soft costs” such as managing inventory, he said.

Labor costs are typically about 20 to 25 per cent of the total cost of a product. For categories like clothing, that require more manual work, production is likely to stay in countries with lower wages, Sirkin said.

Manufacturing experts largely welcome Walmart’s commitment to purchase U.S. goods, though the size of its pledge has not impressed them.

“It’s not an aggressive target,” said Thomas Duesterberg, executive director of the Manufacturing and Society in the 21st Century project at the Aspen Institute.

Walmart says that $50 billion is just a starting point.

The retailer’s effort matters regardless of the size, said Suzanne Berger, a professor and manufacturing expert at the Massachusetts Institute of Technology. “A Walmart decision, however minimal or cosmetic, is a powerful signal,” she said.

To find out more about our certification(s) programs, please visit our Made in USA Certified website: wwwUSA-C.com

Made in USA Certified

Wal-Mart announcement aids symposium

Raymond Cheng

Raymond Cheng

It is unclear if Wal-Mart’s recent commitment to buy an additional $50 billion in Made In America goods over the next decade will spark a manufacturing revival in the United States.

What is clear is that the timing of the Wal-Mart push could not have been better for the upcoming U.S.-China Manufacturing Symposium set for November in Dothan.

While Wal-Mart officials actually announced the initiative in January, it received widespread publicity during a U.S. manufacturing summit in Orlando in August. Executives with the Arkansas-based company say that a focus to increase the purchase of American-made goods could not only drive the creation of more manufacturing jobs, but also add jobs in other sectors including transportation, accounting and industrial engineering as well.

Raymond Cheng, founder and CEO of the SoZo Group – the organizer of the upcoming U.S.-China Manufacturing Symposium in Dothan – said the Wal-Mart announcement is beginning to have an impact in China.

“The Chinese manufacturers are starting to hear about Wal-Mart’s decision. This subject of Made in USA was brought up by top Chinese trade and manufacturing practitioners during the meetings that we hosted in Beijing with U.S. Under Secretary of Commerce Francisco Sanchez (Monday),” Cheng said. “I expect Wal-Mart’s decision will alert some of the Chinese manufacturers, and prompt more Chinese manufacturers to rethink manufacturing and look for a new place to be, especially as we are entering a new era of manufacturing.”

U.S.-based manufacturing is becoming more attractive to companies that have been opening manufacturing facilities in other countries, and to companies in other countries that never considered opening manufacturing facilities in the United States. Several factors are leading to the increased interest:

» Lower U.S. energy costs. A recent Dallas Morning News story cited the “shale boom” as a factor in the location of three international steel manufacturing plants in Texas. The story stated Texas industrial natural gas costs are 25 percent lower than costs paid by Asian manufacturers.

» Increased wages in China.

» Stiff anti-dumping tariffs for certain foreign products.

The China-based Golden Dragon Copper Tubing recently began construction on a $100 million manufacturing facility in Alabama’s Wilcox County. When complete, the plant is expected to employ 300. Locating in the United States will allow Golden Dragon to avoid the tariff and save a bundle on transportation costs.

“As manufacturing in the U.S. is becoming more affordable — plus the attraction to the “Made in USA” stamp — we are seeing more and more Chinese manufacturers becoming interested to invest in America and manufacture here,” Cheng said. “That’s why when we announced the symposium in June, we decided to use this symposium to bridge the United States and Chinese manufactures. We believe that the symposium and its precursor events such as the SoZo 3D Technology Tour (kicked off last week in Dothan) can bring U.S. and Chinese manufacturers together and help to create jobs in communities like Dothan.”

Dothan will host as many as 400 Chinese business executives interested in United States expansion during the three-day symposium Nov. 10-12. Dothan, as well as several other cities and counties, are expected to aggressively pursue companies in order to find jobs.

Posted on September 10, 2013 on http://www.dothaneagle.com/news/article_5a9adc66-1a55-11e3-8798-0019bb30f31a.html

Follow Lance Griffin on Twitter @EagleLance

Made in USA Certified

To find out more about how to become Made in USA Certified please visit our website: http://www.USA-C.com

Morning News Beat Walmart Watch

Morning News Beat

By: Kevin Coupe

• Business Insider reports that Citi analyst Deborah Weinswig is saying that Walmart management seems to be focused on its Made in the USA initiative, and that this effort could lead to improved profitability.

An excerpt: “While global sourcing remains a significant source of EDLC opportunity, we believe that the $50B commitment to increase domestic sourcing over the next decade should benefit topline and profitability at WMT U.S.

“Domestic sourcing will help the company avoid wage inflation overseas and shipping costs, while increasing flexibility through shorter lead times and generating positive reputational buzz. WMT U.S. kicked off the initiative this week with Georgia state sourced towels, priced at $8.97 for bath size. They are offered in 600 stores and will be in an additional 600 stores by Sept., supported by local marketing.”

KC’s View: I do have a bit of a dog in this hunt, since one of MNB’s longtime sponsors offers certification of Made in the USA products. But I was a big proponent of such programs long before this company began sponsoring MNB, so I don’t feel like I have any apologies to make.

I think you are going to see a lot more of these programs, because Made in the USA increasingly will be seen as an advantage for marketers. You have to do it right, you have to be credible, and you can’t take shortcuts. But it makes a lot of sense … and I don’t think it is hard to imagine Amazon having a Made in the USA section, for example … which may be enough for Walmart to do it.

So, it is good to see Walmart executives taking this seriously.  Just as Kevin says – “You have to do it RIGHT, you have to do it CREDIBLE and you can’t take shortcuts..”  But, we want to know, would you feel better about your Made in USA purchases at Walmart orAmazon or any other major retailer if they were- Made in USA Certified?

Made in the USA: More Consumers Buying American

Chris Rank | Bloomberg | Getty Images

A curious thing is happening among American shoppers. More people are taking a moment to flip over an item or fish for a label and ask, is it “Made in the USA?”

Walmart, the nation’s largest retailer, earlier this year announced it will boost sourcing of U.S. products by $50 billion during the next 10 years. General Electricis investing $1 billion through 2014 to revitalize its U.S. appliances business and create more than 1,500 U.S. jobs.

Mom-and-pops are also engineering entire business strategies devoted to locally made goods — everything from toys to housewares. And it’s not simply patriotism and desire for perceived safer products which are altering shopping habits.

The recession, and still flat recovery for many Americans, have created a painful realization. All those cheap goods made in China and elsewhere come at a price — lost U.S. manufacturing jobs. A growing pocket of consumers, in fact, are connecting the economic dots between their shopping carts — brimming with foreign-made stuff — and America’s future.

They’re calculating the trade-offs of paying a little more for locally-made goods.“The Great Recession certainly brought that home, and highlighted the fact that so many jobs have been lost,” said James Cerruti, senior partner for strategy and research at consulting firm Brandlogic. “People have become aware of that.”

“‘Made in the USA’ is known for one thing, quality,” said Robert von Goeben, co-founder of California-based Green Toys. All of their products from teething toys to blocks are made domestically and shipped to 75 countries.

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