In an effort to win customers, Walmart pledged in a TV ad to buy $250 billion in US-made products over the next decade. But as many of us in the ‘Made in USA’ manufacturing industry know, finding quality, terribly low-cost goods is proving a challenge when the American workforce is fairly waged and environmental regulations are in place.
The Christian Science Monitor reports Walmart has to grapple with a host of challenges, including a shallow pool of component suppliers, an inexperienced workforce, and other shortcomings that developed during the country’s long industrial decline.
“A lot of the tribal knowledge and skill sets are gone because the humans who used to do that work have either retired or died,” says H. Kim Kelley, the CEO of Hampton Products International, a privately held maker of locks, lighting and other household hardware. The Foothill Ranch, California-based company began selling products made in Asia to Walmart in the 1990s and is now supplying it with some U.S.-made products.
The Made in USA “reshoring” issue is so widespread that Walmart is making it the focus of a two-day summit it is hosting in August.
Walmart’s critics say the company bears some responsibility for the diminished capability of U.S. manufacturers. For years, its relentless insistence that suppliers cut costs prompted companies to shut domestic plants and shift production to low-wage countries.
Now, the retailer is asking companies to come back home – though they need little prompting. The forces pulling production back to the United States are powerful and real and include lower domestic energy prices, increasingly competitive wage rates, the benefits of greater automation, and a renewed appreciation for the value of being able to respond quickly to shifting U.S. customer demands. –The Christian Science Monitor
What do you think? Can Walmart and it’s suppliers can pull off a ‘Made in USA’ comeback? Join the discussion below!