With much fanfare, Walmart announced a buy America program in 2013. It was obviously an important development because Walmart after all was the company that created the “China Price” by demanding that American suppliers meet the same price as the Chinese supplier. Walmart committed to hike its U.S. purchases by $250 billion by 2023.
Well, the program came with a hitch. The China Price was still in effect. Walmart would give preference to America suppliers, but only if they could meet the same price as the Chinese supplier. And this after Walmart and other multinational giants had helped level several American manufacturing sectors, notably electronics and textiles.
What is the status of the program?
Cindi Marsiglio, Walmart’s VP of U.S. Manufacturing, told me in early 2015 that the program was on plan, but that the next 12 to 14 months would be the most challenging. At that time, the company had a handful of success stories, but was not willing to put a dollar figure on the amount of additional buying in the United States.
A group called the Reshoring Initiative (which describes itself as a partner of Walmart’s) reported in mid-2015 that Walmart had supported at least 43 suppliers to add 4,579 or more U.S. manufacturing jobs since the initiative began. Still, no dollar figure, Walmart’s own benchmark. The jobs’ number is up to 7,000, according to a recent Bloomberg article. That’s 243,000 short of the goal.
Walmart’s program seems like a PR gimmick. And maybe it is. But there are some good things about it.
- At least Walmart understands that the decline of U.S. manufacturing is a problem. It’s in Walmart’s best interest to have a healthy U.S. supply base. There are many reasons. If the political climate changes, many Chinese sources could be cut off. Manufacturing creates a well-paid middle class—Walmart customers.
- Walmart has funded some research initiatives in what it calls an effort to rebuild American manufacturing expertise. I wrote about two in plastics tooling. The effort strikes me as token, and a bit odd in its choices, but at least it’s an effort.
- In cases reported by its PR group, Walmart has helped a few U.S. suppliers get more business. At its U.S. Manufacturing Summit held in June, Walmart agreed to list virtually all of the supplier ideas on Walmart.com. That’s a big difference from shelf space, but at least it’s something.
If Cindi Marsiglio’s reckoning is correct, the critical period for the development of the program has now passed. And there isn’t much to show for it.