News / Economy

Denver Event Aims to Close Gap in Walmart's 'Made in USA' Push

FILE - Walmart pledged last year to buy an extra $250 billion in U.S.-made goods over the next decade, it appeared to be just what was needed to help move America's putative manufacturing renaissance from rhetoric to reality, May 29, 2014.
FILE - Walmart pledged last year to buy an extra $250 billion in U.S.-made goods over the next decade, it appeared to be just what was needed to help move America's putative manufacturing renaissance from rhetoric to reality, May 29, 2014.

Wal-Mart Stores Inc, which has pledged to buy an additional $250 billion in U.S.-made goods over the next decade, is hitting a snag as it tries to meet that promise: Some vendors keen to participate in the initiative complain that after decades of offshoring it has become impossible to domestically source even commonplace components for their products.

So America's largest retailer has invited dozens of small- and midsize manufacturers that aren't necessarily interested in having a direct relationship with Walmart to come to Denver this week for a two-day matchmaking event.

The goal? To connect Walmart vendors hungry for key parts with manufacturers that have idle plants - and to put those plants back to work cranking out components, like small electric motors or polyester yarn, that have become hard to find.

“We're going to try to match up [vendors] who are looking for component parts with factories that have capacity in the hopes that we can rebuild that supply chain that doesn't exist anymore,” said Michelle Gloeckler, the Walmart senior vice president in charge of the initiative.

Critics of the retailing giant are quick to claim that Walmart, which built its empire on low prices, is partially to blame for the sorry state of U.S. manufacturing.

Mary Bottari, a former trade analyst for Public Citizen's Global Trade Watch, says Walmart's push for cheap goods “has fueled a global race to the bottom in wages and working conditions.” And the Economic Policy Institute, a union-friendly think tank, estimates Walmart's trade with China alone has cost the United States 200,000 jobs.

Walmart disputes those claims, and spokeswoman Brooke Buchanan says Boston Consulting Group has estimated that the domestic-sourcing initiative will create 1 million jobs in manufacturing and related service jobs.

Zippers and snaps

The “Made in USA” program was conceived as a way to help Walmart win back customers who have defected in recent years to even cheaper competitors such as Dollar Tree and Dollar General. So far the effort has failed to stem a five-quarter-long decline in U.S. sales.

Walmart says the 18-month-old program is a winner with customers. It hopes the Denver event, which has attracted 100 component part manufacturers as well hundreds of existing and wannabe Walmart vendors, will allow it to rapidly increase the number of U.S.-made products available in its more than 4,200 U.S. stores.

But the event is also a tacit acknowledgment that the “Made in USA” pledge is harder than it might have seemed when it was announced last year.

Not only are some raw materials and components hard to find, but many of the companies tempted to participate in the domestic-sourcing program are unprepared to do business with Walmart and its storied - but complex - inventory control and logistics system.

Walmart's suppliers say difficulties with the program do not invalidate the idea. A number of factors, including rising wages in China, plummeting productivity-adjusted wages at home and a new appreciation for short, responsive supply chains, mean they can compete with Chinese rivals.

“By eliminating the ocean freight, what we've done is lower the overall cost of goods. So I can not only beat Chinese prices, I can obliterate them,” says Keith Scheffler, president of Creative Things, an Arkansas toymaker that recently shuttered its last Chinese plant.

Still, vendors say they are forced to go overseas for such commonplace items as zippers and snaps.

Element Electronics, which makes flat-screen TVs for Walmart, has moved incrementally after finding “there was no known existing domestic supply base” when it moved assembly back to the United States, says Chief Executive Officer Mike O'Shaughnessy.

The company started simple, focusing on things like packaging materials. Now it is seeking U.S.-made suppliers of plastic and metal parts.

O'Shaughnessy figures three years may pass before domestic suppliers can supply all the parts Elements needs.

Supply-chain problems aren't the only challenge Walmart vendors face when they join the “Made in USA” push.

The retailer's “Retail Link” system presents vendors with a torrent of real-time sales, inventory and purchase information that they need to learn how to analyze so Walmart can minimize in-store inventories while keeping shelves stocked.

It's a difficult balancing act that even sophisticated suppliers like Mel Redman, a former senior Walmart executive who runs Redman and Associates, a toy manufacturer that supplies the retailer, struggle to achieve.

“Everything works backwards,” he says.

“What a vendor needs to learn to do is to work from must-arrive-by date backwards through the production schedule, lead time and lag time. It's very complicated.” 

You May Like

Video Americans, Tourists, Reflect on Meaning of Thanksgiving

VOA garnered opinions from several people soon after November 13 Paris attacks, which colored many of their thoughts

Video Thais Send Security Concerns Down the River

In northern Thailand, the annual tradition of constructing floating baskets to carry away the year’s bad spirits highlights the Loy Krathong festival

Video Tree Houses - A Branch of American Dream

Workshops aimed at teaching people how to build tree houses have become widely popular in America in recent years

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Belgium-Germany Border Remains Porous, Even As Manhunt For Paris Attacker Continuesi
Ayesha Tanzeem
November 25, 2015 10:46 PM
One of the suspected gunmen in the Nov. 13 Paris attacks, Salah Abdeslam, evaded law enforcement, made his way to Belgium, and is now believed to have fled to Germany. VOA correspondent Ayesha Tanzeem makes the journey across the border from Belgium into Germany to see how porous the borders really are.

Video Belgium-Germany Border Remains Porous, Even As Manhunt For Paris Attacker Continues

One of the suspected gunmen in the Nov. 13 Paris attacks, Salah Abdeslam, evaded law enforcement, made his way to Belgium, and is now believed to have fled to Germany. VOA correspondent Ayesha Tanzeem makes the journey across the border from Belgium into Germany to see how porous the borders really are.

Video Islamic State Unfazed by Losses in Iraq, Syria

Progress in the U.S.-led effort to beat Islamic State on its home turf in Iraq and Syria has led some to speculate the terror group may be growing desperate. But counterterror officials say that is not the case, and warn the recent spate of terror attacks is merely part of the group’s evolution. VOA National Security correspondent Jeff Seldin has more.

Video Taiwan Looks for Role in South China Sea Dispute

The Taiwanese government is one of several that claims territory in the hotly contested South China Sea, but Taipei has long been sidelined in the dispute, overshadowed by China. Now, as the Philippines challenges Beijing’s claims in an international court at The Hague, Taipei is looking to publicly assert its claims. VOA’s Bill Ide has more from Beijing.

Video Syrian Refugees in US Express Concern for Those Left Behind

Syrian immigrants in the United States are concerned about the negative tide of public opinion and the politicians who want to block a U.S. plan to accept 10,000 Syrian refugees. Zlatica Hoke reports many Americans are fighting to dispel suspicions linking refugees to terrorists.

Video After Paris Attacks, France Steps Up Fight Against IS

The November 13 Paris attacks have drawn increased attention to Syria, where many of the suspected perpetrators are said to have received training. French President Francois Hollande is working to build a broad international coalition to defeat Islamic State in Syria and in Iraq. Zlatica Hoke reports.

Video US, Cambodian Navies Pair Up in Gulf of Thailand

The U.S. Navy has deployed one of its newest and most advanced ships to Cambodia to conduct joint training drills in the Gulf of Thailand. Riding hull-to-hull with Cambodian ships, the seamen of the USS Fort Worth are executing joint-training drills that will help build relations in Southeast Asia. David Boyle reports for VOA from Preah Sihanouk province.

Video Americans Sharpen Focus on Terrorism

Washington will be quieter than usual this week due to the Thanksgiving holiday, even as Americans across the nation register heightened concerns over possible terrorist threats. VOA’s Michael Bowman reports new polling data from ABC News and the Washington Post newspaper show an electorate increasingly focused on security issues after the deadly Islamic State attacks in Paris.

Video World Leaders Head to Paris for Climate Deal

Heads of state from nearly 80 countries are heading to Paris (November 30-December 11) to craft a global climate change agreement. The new accord will replace the Kyoto Protocol on Climate Change that expired in 2012.

Video Uncertain Future for Syrian Refugee Resettlement in Illinois

For the trickle of Syrian refugees finding new homes in the Midwest city of Chicago, the call to end resettlement in many U.S. states is adding another dimension to their long journey fleeing war. Organizations working to help them integrate say the backlash since the Paris attacks is both harming and helping their efforts to provide refugees sanctuary. VOA's Kane Farabaugh reports.

Video Creating Physical Virtual Reality With Tiny Drones

As many computer gamers know, virtual reality is a three-dimensional picture, projected inside special googles. It can fool your brain into thinking the computer world is the real world. But If you try to touch it, it’s not there. Now Canadian researchers say it may be possible to create a physical virtual reality using tiny drones. VOA’s George Putic reports.

Video New American Indian Village Takes Visitors Back in Time

There is precious little opportunity to experience what life was like in the United States before its colonization by European settlers. Now, an American Indian village built in a park outside Washington is taking visitors back in time to experience the way of life of America's indigenous people. Carol Pearson narrates this report from VOA's June Soh.

Video Even With Hometown Liberated, Yazidi Refugees Fear Return

While the northern Iraqi town of Sinjar has been liberated from Islamic State forces, it's not clear whether Yazidi residents who fled the militants will now return home. VOA’s Mahmut Bozarslan talked with Yazidis, a religious and ethnic minority, at a Turkish refugee camp in Diyarbakır. Robert Raffaele narrates his report.

Video Nairobi Tailors Make Pope Francis’ Vestments

To ensure the pope is properly attired during his visit, the Kenya Conference of Catholic Bishops asked the Dolly Craft Sewing Project in the Nairobi slum of Kangemi to make the pope's vestments, the garments he will wear during the various ceremonies. Jill Craig reports.

Video Cross-Border Terrorism Puts Europe’s Passport-Free Travel in Doubt

The fallout from the Islamic State terror attacks in Paris has put the future of Europe’s passport-free travel area, known as the "Schengen Zone," in doubt. Several of the perpetrators were known to intelligence agencies, but were not intercepted. Henry Ridgwell reports from London European ministers are to hold an emergency meeting Friday in Brussels to look at ways of improving security.

Video El Niño Brings Unexpected Fish From Mexico to California

Fish in an unexpected spectrum of sizes, shapes and colors are moving north, through El Niño's warm currents from Mexican waters to the Pacific Ocean off California’s coast. El Nino is the periodic warming of the eastern and central Pacific Ocean. As Faiza Elmasry tells us, this phenomenon thrills scientists and gives anglers the chance of a once-in-a-lifetime big catch. Faith Lapidus narrates.

Video Terrorism in Many Forms Continues to Plague Africa

While the world's attention is on Paris in the wake of Friday night's deadly attacks, terrorism from various sides remains a looming threat in many African countries. Nigerian cities have been targeted this week by attacks many believe were staged by the violent Islamist group Boko Haram. In addition, residents in many regions are forced to flee their homes as they are terrorized by armed militias. Zlatica Hoke reports.

Video Study: Underage Marriage Rate Higher for Females in Pakistan

While attitudes about the societal role of females in Pakistan are evolving, research by child advocacy group Plan International suggests that underage marriage of girls remains a particularly big issue in the country. VOA’s Ayesha Tanzeem reports how such marriages leads to further social problems.

VOA Blogs

World Currencies


Rates may not be current.