Yes it would seem that statement makes no sense but Walmart could be trying to change this. Walmart is the largest retailer in the US and the poster boy company (if such a thing is even possible) of the American company who builds and manufactures whatever possible in China to exploit the cheap labor and lax environmental and safety conditions there. All to make and sell products at the lowest possible prices, and it certainly works. They are not the only company to do this, just the largest, most well-known and visible. In fact, if you know anyone that has ever dealt with Walmart in terms of selling a product to them, it spawned the term “The China Price.” I thought this was very interesting, here is what it is about. If you have a product you have created, designed, etc. and you want to sell it to them you have absolutely no leverage at all. Walmart takes a look at it, and tells you what they will pay for it. If you object, etc. they just tell you that what they gave you is “The China Price,” meaning that is what is can be made for there. If you don’t agree they just go ahead and move onto the next person who wants to sell them a product. So it is truly their way or the highway, there is no negotiation and they have a long history of treating their employees terribly. SO, that is why this is deserving of blogging even if it came out on Friday.
They just announced the creation of a $10 million dollar fund to push and promote the selling of American manufactured products. It will be distributed over 5 years and provide grants to companies to manufacture products here. Now before you scoff at the small amount of this fund, it must be noted that last year Walmart said it would increase the sourcing of US manufactured goods by $50 billion dollars! Now that is a serious amount. This amount would be over a 10 year span to not only buy US products but also to assist vendors in bringing their production back to the US from China or elsewhere. I can virtually guaranty you that there are some serious back channel talks going on between the Government and Walmart to make this happen. I doubt it will ever become public and these kinds of discussions with the Gov’t. and huge companies probably happen fairly often. If this were to happen it would be a solution to so many problems in the US, creating jobs for the poorest Americans, increasing manufacturing, and less reliance on and supporting other countries’ economies. Almost immediately after this news, the specter of the minimum wage hike is mentioned, and how that could potentially alter these plans. It mentions that there are some internal personnel changes happening within Walmart, and that could be influencing these possible new company directions. The end of the article is very revealing in that Walmart has acknowledged that inflation is outpacing their core customers, and there is only so much price cutting you can do before it seriously impacts the company’s bottom line. Big negotiations going on, potential huge impact on the US and the economic recovery. Keep an eye on this one, it could be a game changer if it happens. What do you think? While you don’t have to respond, and indeed the vast majority of you don’t, it would be fun to have an interactive discussion on some of these issues. Either way, thanks for reading as always and have a great day.
Walmart Fund to Support U.S. Manufacturing
Orin Rosenfeld
President
Rosenfeld Realty Advisors
9858 Glades Rd. Suite 209
Boca Raton, FL 33434
Phone: 561-756-1665
Fax: 561-470-0707
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