Beebe to attend Wal-Mart manufacturing event

Gov. Mike Beebe along with economic development officials from around Arkansas plan to attend a Wal-Mart organized manufacturing summit later this month that is part of the retailer’s effort to buy at least $50 billion in U.S. made products during the next 10 years.

The event, labeled by Bentonville-based Wal-Mart as the U.S. Manufacturing Summit, is scheduled for Aug. 22-23, and will be held in Orlando, Fla.

“Our goal is to convene suppliers, government bodies, thought leaders and other retailers to accelerate our mission of leading an American renewal in manufacturing,” Greg Hall, vice president of U.S. sourcing and manufacturing, told Site Selection magazine in a July 2013 interview. “If a supplier is evaluating U.S. production or expansion of U.S. production, attending this summit is designed to provide understanding of state and local incentives, opportunities, work-force capabilities, readily available raw materials, economics, etc., all in one place.”

Two-thirds of products purchased by Wal-Mart come from the U.S., but much of that is for food. The Jan. 15, 2013, announcement by Wal-Mart provided two areas in which the company hoped to help grow U.S. manufacturing.

“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,” noted the company statement.

As of July, Wal-Mart had been in contact with about 25 state governors and economic development offices about the program.

Matt DeCample, spokesman for Arkansas Gov. Mike Beebe, confirmed that Beebe would attend the summit. Others from Arkansas attending include Grant Tennille, executive director of the Arkansas Economic Development Commission; Tim Allen, president of the Fort Smith Regional Chamber of Commerce; and representatives with the Northwest Arkansas Council.

“The governor is going. We’re going to make a big push on that,” Tennille said. “I’m real hopeful that the Wal-Mart onshoring (effort) is going to be good for Arkansas.”

THE FORT SMITH MESSAGE
Allen said he plans to travel to the summit with several flash drives full of information that speak to the advantages of doing business in the Fort Smith area.

“I’m going to bring the Fort Smith message, and make the rounds and target, or select companies (that fit),” he explained. “Fort Smith has several buildings, very nice buildings that are food grade and good for manufacturing.”


Allen said recruiting new businesses in recent years has more to do with the people than the facilities.

“It’s often about the people, the workforce, and the training that we can provide. … I think, for a lot of reasons, that we can tell a good story with that,” Allen said.

Allen also believes Fort Smith may have a geographic advantage.

“One thing I will be talking about is our close proximity to the (Wal-Mart) corporate headquarters. I think logistically, just located 50 or 55 minutes south of the headquarters … I think Fort Smith is sitting in a good location,” Allen explained.

Landing any piece of the $50 billion onshoring effort will help the Fort Smith area. Of Arkansas’ three largest metro areas, the Fort Smith region has been the hardest hit in the past decade in terms losing manufacturing jobs. Between June 2003 and June 2013, jobs in the sector are down 23% in central Arkansas, down 34.16% in the Fort Smith region, and down 20.8% in Northwest Arkansas.

U.S., ARKANSAS MANUFACTURING TRENDS
Tennille, Allen and many of their peers around the state and country have good reason to hope the onshoring effort helps the U.S. manufacturing sector.

Historically, U.S. manufacturing sector employment has ranged between 17 million and 19 million. It reached a high of 19.553 million jobs in June 1979. Sector employment has been stuck below 12 million since May 2009. Prior to May 2009, the last time sector employment was below 12 million was May 1941.

In early 2010, Arkansas’ manufacturing sector appeared to find a bottom and entered a 14-month period (April 2010-May 2011) in which employment remained above the 160,000 level. By early 2012, sector employment resumed its decline. May and June of 2013 marked the first time employment in the sector was consecutively below the 155,000 level.

Between June 2010 and June 2013, Arkansas lost 7,700 manufacturing jobs, a decline of 4.75%. Among Arkansas’ neighboring states, only Mississippi also saw a decline in manufacturing jobs in the same period, but that was just a 500 job loss, or a decline of 0.36%.

During the same three-year period, the manufacturing workforce grew by 3,600 jobs in Louisiana; grew by 9,500 jobs in Missouri; grew by 12,300 jobs in Oklahoma; and grew by an impressive 55,900 jobs in Texas. Nationally, there was a 3.7% gain in manufacturing employment between June 2010 and June 2013. However, all states have seen a manufacturing workforce decline when compared to the previous decade (June 2003). (Link here to read more about the manufacturing job rebound fading in Arkansas.)

‘RECRUITING LIKE CRAZY’
Allen is not unfounded in his hopes that Arkansas cities may have a leg up on landing new business from Wal-Mart’s onshoring drive.

Beebe’s office and Wal-Mart launched in May the “Arkansas’ Own” program that features consumer products from Arkansas. According to Wal-Mart, the retailer carries more than 1,700 units made, produced or processed in Arkansas. Hall, in the Site Selection interview, said the Arkansas items come from 73 brands and 44 suppliers. The companies range from such global operations as Springdale-based Tyson Foods to “smaller, lesser-known companies.”

“Walmart's goal is to create awareness and drive consumer interest in Arkansas products and help the vendors and suppliers in our home state,” Hall noted in the interview.

Hall also said he hoped the $50 billion push would rise to $500 billion in purchasing of U.S. goods if other retailers participate.

Whether it’s $50 billion or $500 billion, the program has Tennille’s attention.

“We’re very focused on trying to take advantage of that (Wal-Mart onshoring program), … and recruiting like crazy in those areas,” Tennille said.