A progress report: Walmart’s pledge to revive American jobs

It’s almost been a decade since Walmart committed to supporting American manufacturing jobs by buying $250 billion over 10 years in products grown or made in the U.S. That commitment was made in January 2014 with the expectation to support over 750,000 U.S. jobs.

In 2021, Walmart extended that commitment to 2030 with another $350 billion to be spent on goods made, assembled or grown in the U.S.

“When I joined Walmart in 1993, I remember reading about the company’s commitment to buy products that support American jobs. It was a continuation of Sam Walton’s ‘Bring it Home to the USA’ initiative, launched in 1985. Supporting American jobs is part of who we are,” Walmart U.S. CEO John Furner said in March 2021.

Furner said the 2021 commitment would support more than 750,000 U.S. manufacturing jobs. Over the decade, Walmart has showcased dozens of suppliers and the jobs they support by selling products to the retail giant.

The Reshoring Initiative estimates that 1.67 million jobs returned to the U.S. between January 2010 and Jan. 31, 2023. According to Harry Moser, director of the Reshoring Initiative, Walmart is one of the significant contributors to the growth of U.S. manufacturing jobs. He said Walmart’s efforts are to be applauded, although there is far less rhetoric on the initiative today than in the early years.

“As of 2020, we recognized 135 cases where Walmart supported the manufacturing onshoring sector. Today, I suspect that’s probably a minimum of 150, which is a lot,” Moser said.

Reshoring Initiative estimates Walmart’s efforts support around 300,000 direct manufacturing jobs in America and up to 1 million total jobs. Moser said the industry return rate has slowed in the back half of this year, but overall, he estimates 350,000 jobs will return to the U.S. in 2023, which would be flat to a year ago. The growth in job recovery is substantial from the 6,000 jobs reshored in 2010 when Moser began tracking onshoring.

Suppliers selling goods into Walmart have supported manufacturing jobs across the U.S., including Arkansas, with plastics and craft beer from around the state, sauces from Rogers and rum made in Fort Smith.

Moser said manufacturing in China is still 30% cheaper on average than in the U.S. But rising geopolitical tensions represent risks for U.S. importers. Reshoring Initiative provides a tool for manufacturers to calculate risks. It provides other tools that give manufacturers an estimate of their U.S. production cost compared to those abroad.

Moser said the high value of the U.S. dollar, rising interest rates, lower container and transport costs relative to the past few years, and the shortage of skilled labor are factors working against reshoring. That said, he expects federal subsidies supporting the computer chip and EV batteries industries to keep onshoring numbers steady for the next couple of years.

Kent Bicycle CEO Arnold Kamler said the company’s Bicycle Corporation of America facility in Manning, S.C., was returning to normal after the pandemic and an inventory oversupply resulting in layoffs late last year. Kamler said he opened the plant in 2014 to assemble bicycles on U.S. soil with state incentives and purchase orders from Walmart.

“We have invested more than $10 million in the facility in Manning. We added rim-making and frame painting to that assembly plant, but most of the components still come from Asia. We have staffed back up to 150 workers, and business is returning to normal. But we still have some inventory to sell through,” Kamler said.

The 55,000-square-foot plant is assembling and painting around 850 bikes daily, exclusively for Walmart. The plant is also making a higher-grade Ozark Trails bike, a proprietary brand for Walmart, that more closely aligns with bike shop quality. Kamler said the bikes are selling well.

Most of Kent’s bicycles are still made in China. He said his business will sell 2 million bicycles to Walmart this year. The South Carolina plant has rolled out 1.8 million bikes since opening nine years ago.

Kamler said there had been setbacks in reshoring some of the production. When the plant opened, it was the first time since 1998 that bicycles rolled off a line in the U.S. He said ongoing trade tariffs with China on parts are problematic, and he has been able to source some of the materials closer to home.

“We would love to see our competitors onshore some production so that we have more critical mass to support a U.S. bicycle parts industry and alleviate so many imports of component parts,” Kamler said.

Walmart admitted in 2019 that much of the low-hanging fruit around U.S. manufacturing had already been plucked, and more effort would be needed to fuel the effort. In 2021, Walmart launched its American Lighthouse concept to spotlight five critical areas targeted for onshoring: textiles, plastics, food processing, motors and metals, and pharma and medical. Walmart said it would use its connections to bring together stakeholders across industries to overcome barriers to onshoring for these five key industries.

It’s also been a decade of Open Call events for Walmart in association with buying American-made, grown or assembled products supporting U.S. manufacturing. The first event was held in July 2014. More than 500 inventors and potential suppliers came to Bentonville to pitch their products. Local entrepreneurs Hugh and Nicole Jarratt of Fayetteville got a deal to sell 1 million of their taco plates to Walmart. The plates were made at Polytech Moldings in Prairie Grove. The plates were a big hit, and Jarratt later sold a double dip bowl to the retail giant to complement the plates. The local manufacturer also made other products for Walmart suppliers, such as life sharpeners for Smith’s Consumer Products of Conway and Nautilus fitness equipment, also sold at Walmart.

Jarratt recently said his patent on the plate has run out, and lower-price competitors out of China are selling in the space. He is still selling the plates and bowls on Walmart.com from inventory stocks but is not continuing to make the products. Over the years, he has worked with Walmart, selling seasonal wader socks for duck hunters and detangler devices for flags this past summer. He also sells his products on Amazon and his own site. All of the products are made in the U.S.

“Walmart has been great to work with over the past decade on many different projects,” Jarratt said. “My advice for entrepreneurs pitching at this year’s Open Call (Oct. 24-25) is to know the true cost and logistics for sourcing and moving the product very well. Logistics have changed immensely since I started selling products over a decade ago.”

While the retailer promotes its reshoring efforts, Walmart has also been criticized for pushing jobs overseas — especially to China — by focusing on lowering costs in all parts of the supply chain. U.S. suppliers could not compete with the vastly lower wages in China, Vietnam, Mexico and other countries.