Walmart is in a period of unprecedented investment
Walmart, leading American multinational retailing corporation signs a deal with Renfro Corporation, one of the world's largest producer of socks, that anticipates creating about 440 jobs at Renfro's manufacturing facility in Fort Payne, Alabama, as part of Walmart's January 2013 US Manufacturing Commitment to buy an additional $250 billion of US products supporting American jobs over 10 years. Renfro Corporation is a long-time manufacturer of socks for Walmart under brands such as Fruit of the Loom, Russell, Dr Scholl's, Faded Glory, among others. With changes in energy costs and labour costs overseas, it is increasingly cost-effective and efficient to manufacture closest to the point of consumption, helping Walmart respond to trends and customer demand. Subir Ghosh spoke to senior officials from Walmart about the significance of the deal, especially keeping global trends and processes in mind.
Also earlier this year, Walmart had announced that it would add 10,000 retail jobs in the US with 59 new, expanded and relocated stores. The number of new stores is said to be fewer, but the number of jobs is more. What is the reason for this?
Walmart is in a period of unprecedented investment to better serve customers. To do that, we continue to find ways to operate more efficiently and effectively, true to our costconscious heritage. We are getting great feedback from our customers about the changes under way and plan to be aggressive going forward to serve them even better.
The new Walmart-Renfro deal is expected to create 442 new jobs. How significant is this, considering that the number 442 is far too small to be of much economic significance. And, apart from the one with Renfro, which are the deals with other manufacturers that will create new jobs in the US?
Walmart's commitment to buy $250 billion in products supporting American jobs by 2023 is having a tangible impact on communities across America. In the three years since we launched our initiative we have seen factories opened, jobs created and American products added to our shelves in stores and online. We evaluated 1,300 categories and are pursuing opportunities across the business. We have hundreds of active initiatives under consideration and have shared many successful examples including:
California Innovations, producer of the Ozark Trail 'super cooler'. The Canadian company with US operations is moving production of the cooler from China to a factory in Atlanta, Georgia, creating 350 jobs.
Edgewell Personal Care, a maker of personal hygiene products, which is bringing production from Canada to Dover, Delaware, creating 272 jobs.
What percentage of products retailed by Walmart in the US are in fact manufactured in that country? How do you expect to maintain a balance?
According to data from our suppliers, items that are made, assembled, sourced or grown here account for about two-thirds of what we spend to buy products sold at Walmart US.
Overall, how do you see US manufacturing shaping up? Has the US dragged itself out of the global slowdown? Are things looking better?
By investing in products that support American jobs, we are able to bring new products to our shelves that our customers want-and new jobs to our communities. Increasing domestic manufacturing will help create additional jobs in the US-that's good for American businesses.
In this context, how do you see the manufacturing of textiles/apparel? Walmart had embarked on the job creation agenda some 3-4 years before the current US President was sworn in. You were under no compulsion to manufacture in the US earlier, but are you now?
We've been focused on encouraging manufacturing in the US with our suppliers for several years now and launched an initiative in 2013. As the largest private employer in the US making significant investments in our business that impacts local communities nationwide, we're proud of the role we play helping create and support jobs in the US.
In January this year, six research and academic institutions were awarded nearly $3 million in grants by the Fund for their work focused on innovations in textile manufacturing. Could you elaborate on Walmart's plans and ideas w.r.t textile innovations?
In 2014, Walmart and the Walmart Foundation pledged $10 million over five years to fund the development of domestic manufacturing with a specific goal of advancing the production or assembly of consumer products in the US. This current round of grants will complete the $10 million commitment.
The Walmart US Manufacturing Innovation Fund is designed to provide grants in support of applied research projects advancing innovative solutions to key challenges that have the potential to lower the cost of making consumer products in the US. The fund is a collaboration between Walmart, the Walmart Foundation and the US Conference of Mayors who strive to find innovative ways to grow local economies.
The new US regime is said to be working on a proposal on how imports get taxed. How is Walmart handling this? Very broadly speaking, how do you see Walmart fitting into the new scheme of things?
We look forward to working with the Administration (and Congress); however, it is too soon to discuss policy at this time.
What are your India plans? At the last count, Walmart had 21 stores in India. What are the plans for expansion? The Indian government too wants everyone to ‘Make in India’. How do you plan to operate in a global scenario where every country wants to retain or even expand its manufacturing base?
It is in our best interest to have our suppliers succeed. We believe in helping them understand the Walmart business, changing global trends and achieving the right certifications if they are needed. We like to source from local businesses and support sourcing efforts in our countries like Make in India. Walmart India currently operates 21 stores across the country in 'cash and carry' format and plans to open 15 more stores in next five years.
Published on: 28/03/2017
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
20230103183907.png)
