Push to return manufacturing jobs to U.S. remains ‘very strong’ at Wal-Mart

Michelle Gloeckler says Wal-Mart Stores remains focused on helping return manufacturing jobs to the U.S., with the number of success stories growing and the 2015 manufacturing summit being moved to Bentonville to better connect buyers with products “that are ready to go.”

“It is still alive, well and very strong,” Gloeckler, executive vice president, consumables and health and wellness and U.S. manufacturing lead, said when asked about Wal-Mart’s focus on the manufacturing push.

Then Walmart U.S. CEO Bill Simon was the initial champion of the 2013 pledge to buy $50 billion in U.S. made products in 10 years. At the time, Wal-Mart estimated that over the next decade the investment would total $250 billion. The Boston Consulting Group predicted that the $250 billion investment would create one million jobs, including the jobs in manufacturing and related services.

The effort included a series of national television ads with popular pitch man Mike Rowe that ran in early 2014 during the Winter Olympics. Wal-Mart conducted a manufacturing summit in Orlando, Fla., in August 2013, with an estimated 500 suppliers attending and representatives from 38 state governments, including eight governors. Then Arkansas Gov. Mike Beebe was one of the eight attending. A 2014 summit was held in Denver, Colo.

However, when Doug McMillon was selected over Simon as CEO of Wal-Mart Stores to succeed the retiring Mike Duke, Simon eventually left the company, and the focus on manufacturing was pushed down the corporate chain of command.

‘BETTER FILTER’
Gloeckler said it is a mistake to think the company has reduced its commitment to the manufacturing push. She said the manufacturing summit planned for Bentonville will include a “better filter.” She said in years past they met with people who had product ideas, but this year they will focus on meeting with people and companies who “have a manufacturing plan” and can begin almost immediately to put products on shelves.

The 2015 Walmart U.S. Manufacturing Summit is themed “Investing in American Jobs,” and is set for July 7-8. The event will be held in the Arend Arts Center at the Bentonville High School. Arkansas Gov. Asa Hutchinson and Walmart U.S. CEO Greg Foran are scheduled to speak. Also expected to attend is Harry Moser, founder of the Reshoring Initiative, a group founded in 2010 to help manufacturers and others in the supply chain find cost-effective ways to return production to the U.S.

“Walmart will offer the unique opportunity to meet with buyers across our formats, as well as facilitate meetings for current and potential suppliers with key state economic development officials with knowledge of available U.S. manufacturing locations,” Wal-Mart noted on one of its websites touting the event.

Information requested by Walmart in the 8-page “supplier initial questionnaire” includes detail on the cost to produce item overseas compared to the U.S., why the company is interested in moving production back to the U.S., any plans or ability to add production capacity, and consumer demand for the product(s).

RECENT SUCCESSES
Wal-Mart officials said in October 2014 there were 150 projects being worked. Recent successes touted by Wal-Mart include a $16 million hosiery plant in Hildebran N.C., and a $21 million investment by Korona Candles in Dublin, Va.

The PEDS plant in Hildebran is expected to employ 150 in 2015 and grow to 205 jobs by 2018, according to the March 11 announcement. Socks made at the plant are also expected to be sold in Mexico and South Korea.

The April 15 announcement from Korona said the new plant will employ up to 175 by 2017.

“KORONA Candles have made tremendous efforts to bring Walmart customers quality, U.S.-made tealight candles to our more than 5,000 stores across the country,” Gloeckler said in the Korona announcement. “We are proud to support manufacturers who share our passion to create jobs for American workers and strengthen local economies.”

Wal-Mart also provides this report on “some of the announcements made so far.”

Some critics of Wal-Mart’s push say the $250 billion number is a small percentage compared to overall sales in the 10-year period. Wal-Mart is on track to reach $500 billion in annual sales. Others say Wal-Mart alone can’t make a significant impact on returning manufacturing jobs. Adrienne Selko, in a June 9 column in IndustryWeek about Wal-Mart being a trendsetter in reshoring, said other retailers will need to do more.

“Returning back to the original question however, it remains to be seen if Walmart can push the needle of reshoring in a major way, and in fact become a trendsetter. They need to be joined by other big box retailers,” she noted

THE RESHORING TREND
The Reshoring Initiative said 2014 was the first net gain of U.S. manufacturing jobs in at least 20 years. Moser said at least 10,000 jobs were added during the year. Better innovation and research and development, higher productivity, shorter supply chains,  and faster response to changing market conditions are some of the reasons touted by the Reshoring Initiative as why reshoring makes sense.

American manufacturing has seen a steady gain in jobs since hitting a low of 11.453 million in February 2010. However, millions more jobs will have to be added to return to job levels of just 10 years ago. According to the U.S. Bureau of Labor Statistics, U.S. manufacturing employment in May was 12.335 million, up from 12.154 million in May 2014, but below the 14.256 million in May 2005 and well below the 17.279 million in May 2000.

Arkansas’ manufacturing sector has not fared as well as the national trend. April manufacturing employment in the state was 154,600 in April, up from 153,500 in April 2014, but down 3.7% compared to 160,600 in April 2010. The number of Arkansas manufacturing jobs is down significantly from 10 years ago when April 2005 employment was 201,700.