Omni said:
That same story has been repeated by many, many companies that work "with" WalMart.
Yep. Here's actually part of an interview with Jon Lehman, who worked as a store manager at Wal-mart for 17 years until he quit in 2001, disillusioned by Wal-mart's ethics:
So what you're saying is Wal-Mart's got all the leverage in the situation?
Yeah. So let's say I'm Black & Decker or whatever. I go to Wal-Mart in Bentonville. I go walk across the street or drive across the street, because the Wal-Mart buyer's calling me. He wants to negotiate pricing. So I go over there and sit down with the buyer, and he says: "I want you to make those cordless screwdrivers this year for less than you did last year. We bought 60 train carloads last year. We're going to buy 160 this year if you can sell them to us at this price."
And there is no saying no, because Wal-Mart already knows the cost of your raw materials, the cost of your production, the cost of your shipping, the cost of your everything. They know everything. …
And so what do these manufacturers do? They walk away, and, you know, I can envision these phone calls that take place back to their corporate: "You're not going to believe what Wal-Mart wants us to do." "What is it this time?" "Well, they want us to sell that same product that we sold them last year, but they want it at a 2 percent discount in cost this year." And they're already just making ends meet.
So now the company has to look at it and say: "We can't make it here in America anymore. We might have a union plant where we're paying you good, living, union wages. I think we need to close this plant, maybe move it over to China or move it down to Monterrey, Mexico. We've got NAFTA, so let's take advantage of it."
So you're saying Wal-Mart is shoving jobs out of America by the pressure it's putting on suppliers?
What I'm saying is we hear a lot of talk today in the media, and especially going into this campaign, that it's all about manufacturers exporting jobs and "Benedict Arnold CEOs" exporting jobs.
Well, I say look behind that veil. Let's look at the cause and effect here. Here we have the world's largest retailer. Now, they've got to have some effect on these manufacturers. Look behind the manufacturers. The manufacturers are trying to deal with this ... retailer out there ... that wants to look at their books, that wants to "partner" with them on these things.
So who's driving the process? … What does it look like to you? You've been inside Wal-Mart. You've seen it. You've talked to Wal-Mart buyers; you've seen suppliers; you've heard the story. ... You just said these companies are having trouble bargaining... I mean, it's pretty hard to escape the conclusion, isn't it, that Wal-Mart is a factor pushing the jobs to China?
Absolutely. The company's completed shifted its focus again from the founding principles of Sam Walton, who, by the way, used to really enjoy and take a lot of pride in what's called the "Buy America" program, "Made in America," "Bring it home to the USA." He was all about going to factories in America that were closing, like a flannel-shirt factory. I remember one example of that. They couldn't make flannel shirts in America as cheap[ly] as they could in China, so the factory closed. Three hundred-something jobs went down.
Well, Sam went to that owner of that manufacturer and said: "Look, if you'll make flannel shirts just for Wal-Mart exclusively for the next three years, I'll retool your plant. I'll give you a loan ... get your business up and going, and you just sell them to us." And that's what he was all about.
I recently heard a speech by Lee Scott, the CEO, and in his speech, what was disturbing to me is he said -- somebody questioned him about China: "Why are you doing so much business in China?" And he just kind of resigned himself to it and said: "Well, it's just the way it's got to be. This is a global economy now. We've got to do business with China. We have no other choice."
What happened to Sam Walton's founding principles? What happened to "Buy America," "Bring it home to the USA," good, American, union jobs? What happened to that?