Friday, January 24, 2014

Walmart commits to support manufacturing in the United States

At the U.S. Conference of Mayors Meeting, Walmart U.S. President and CEO Bill Simon announced the creation of a new fund for innovation in American manufacturing and a new supplier commitment to bring production of bikes and jobs to South Carolina.

Funding innovation
Walmart and the Walmart Foundation will fund the new five-year program and work in collaboration with the U.S. Conference of Mayors to launch it this March. The fund will provide grants to innovators in the manufacturing sector and seeks to create new processes, ideas, and jobs that support America's growing manufacturing footprint.

"If we want to grow manufacturing and help rebuild America's middle class, we need the brightest minds in our universities, in our think tanks, and in our towns to tackle obstacles to U.S. manufacturing," said Simon. "The $10 million fund will identify and award leaders in manufacturing innovation and help us all work together to create opportunity."

Last year, Walmart announced that it will buy an additional $50 billion in products manufactured in th United States per year by 2023. Walmart estimates that its $50 billion pledge, in the 10th year, will result in Walmart buying an additional $250 billion cumulatively over the next 10 years. This pledge is in an effort to grow U.S. manufacturing and encourage the creation of U.S. jobs.

The Boston Consulting Group predicts that this $250 billion investment will create one million jobs, including jobs in manufacturing and related services.

Bringing manufacturing stateside
Kent Bicycles announced it is moving production from overseas to Clarendon, South Carolina. According to Kent, when at full capacity in 2016, the company will have added at least 175 new jobs and will be assembling 500,000 bikes annually. Based in Parsippany, N.J., Kent expects to start production in the fall of 2014.

"We look forward to bringing production to South Carolina," said Arnold Kamler, owner of Kent Bicycles. "Our company moved all manufacturing overseas in 1990 because it was so much more cost effective. When Walmart made its commitment to U.S. manufacturing last year, it opened our eyes to restarting some manufacturing here. We attended Walmart's August manufacturing summit and were able to focus our efforts quickly and make things happen with South Carolina."

"Those that have already taken the risk to move or expand manufacturing in the U.S. tell us they are experiencing a first-mover advantage—a significant leg-up in terms of market-share and momentum," added Simon. "Kent Bicycles is taking the opportunity to become one of those first-movers with its facility in South Carolina."

Manufacturing summit
Walmart also announced that it will host its second U.S. manufacturing summit in Denver, Colo., in August 2014. One focus of this year's summit will be connecting manufacturers in need of component parts to factories with excess capacity.

"Many factories aren't operating at full capacity. By working together, we have an opportunity to repurpose or help add production to some of these communities," said Simon. "This will help rebuild the American supply chain to support U.S. manufacturing and create more jobs."

Walmart's first summit in August 2013 brought together more than 1,500 attendees, including 500 suppliers, 34 states and government officials to discuss opportunities to create jobs, restore communities and drive economic growth. 

Walmart also revealed the results of a supplier survey, according to which 72 percent of Walmart suppliers believe that manufacturing in the U.S. will be cost favorable within four years or less. Currently, 40 different departments at Walmart are in active discussions with suppliers to manufacture in the United States.

The retailer has similar initiatives to purchase more products manufactured in Puerto Rico.


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