Monday, July 2, 2007

Wal Mart Shipping Ohio Jobs Overseas

Between 2001 and 2004 Ohio lost one of every six manufacturing jobs. This adds up to 170,000 jobs in 4 years. Cleveland alone lost 40,000 jobs. Why?
Wal Mart
Look at the charts below:




Last year alone, Wal Mart sourced out $18 billion worth of goods from China that used to be made in the U.S. In 1995, Wal Mart was big on "Buy American" with only 6% of its' merchandise imported. Today, over 60% of Wal Mart merchandise is imported. The import figure would be much higher, but the Wal Mart Supercenters that have groceries (mostly grown in America) has helped to keep the figure down.
I found reports on 4 companies that used to be in Ohio, but now have their plants in China, thanks to Wal Mart. Remember Huffy Corp., Rubbermaid, Mr. Coffee and Thomson Electronics? Those are just a few, but there are others--Hasbro, Ohio Art, Texas Instruments, Hoover, World Kitchen and Phillips have also closed their Ohio plant thanks to Wal Mart. How does this happen?
Wal Mart is the biggest company in the world. It generates more profit than McDonalds, Boeing, UPS, The Gap, Nike, Apple Computers, Circuit City, Best Buy, Heinz, Office Depot and Halliburton combined! Companies that supply Wal Mart can't tell Wal Mart what a product will cost. Wal Mart tells these companies what it will pay for their products. If they can't cut their price, Wal Mart will go elsewhere. Check out these examples:
Huffy Bikes Huffy accounts for 85% of all bikes sold in the U.S. Wal Mart is the largest seller of bikes in the U.S. Wal Mart told Huffy it had to lower its' prices or Wal Mart would stop selling Huffy bikes. Since Wal Mart was their biggest customer, they had to comply. Huffy was forced to close its' Celina, Ohio plant and move the work overseas. By 2005, even though Huffy made its' bikes in China, still could not meet the ever-increasing demands from Wal Mart to lower their prices. They were forced to reorganize and an agreement gave its' Chinese suppliers controlling interest in the company. Bottom line--gone is another American icon--now a Chinese company. How can the Chinese make a bike so cheap, that we can't compete?
At the Baoan Bicycle Factory in China, workers:*Work 15 hours a day, 7 days a week*Earn 25 to 41 cents an hour*Have no health insurance or pension*Are not allowed to talk during working hours*Limited to 2 poor quality meals a day*Are fired if they complain about working conditions or refuse overtime
Here's the irony of the situation. Wal Mart built a supercenter on the 50 acre site that was once the home of the Celina Huffy plant. Sick!
Rubbermaid The company was in business for over 85 years and they were born in Wooster, Ohio. They were renowned for their high quality and innovative designs. Around 1995, Wal Mart decided to carry Rubbermaid, and became their biggest customer. When Rubbermaids' raw material prices increased by 80%, they went to Wal Mart to ask for a price increase. Wal Mart told then to go fly a kite! Wal Mart replaced much of their Rubbermaid line with Sterlite, a cheaper brand made overseas. Rubbermaid's profits dropped by 30%. Rubbermaid finally closed its' flagship plant in Wooster. The cost? Loss of over 1250 Ohio jobs. The closing killed the city of Wooster, and cost the local school system over $1 million a year. The trickle-down effect cost almost 100 teachers their jobs and surely impacted hundreds (maybe thousands) of other businesses and individuals part (or all) of their livelyhood.
Thomson Electronics Thomson Consumer Electronics operated its' RCA television manufacturing plant in Circleville, Ohio. They supplied Sanyo with big screen televisions. In 2003, Sanyo was pressured to lower their prices by Wal Mart. Sanyo increased their (cheaper) imports (up to 4 million units) from China. Thomson lost almost all of its' orders from Sanyo, and closed their Circleville, Ohio plant costing Ohio over 1,000 jobs.
Mr. Coffee In 1985, Wal Mart demanded that Mr. Coffee cut their prices. In order to meet Wal Mart's demands, Mr. Coffee was forced to explore moving their plant overseas. According to a Mr. Coffee former executive, "Wal Mart encouraged offshore production even as it promoted a "Buy American" campaign". by 1997, 40% of their production was from China. In 2000, they closed their Glenwillow plant and moved it to Mexico (costing 340 jobs). In 2003, they closed their Mexican plant and moved it to China. The Chinese even undercut the Mexicans! In order to meet Wal Mart's price demands, they cut wages from $10.00/hr.(in Ohio) to 25 cents/hr.(in China). The irony:
The amount they saved by moving their plants overseas (an estimated $7 million) was paid out to their CEO (Jerry Levin) in performance bonuses. I'm kind of pissed off at this one. Not only at Wal Mart for making Mr. Coffee to play the "import card" but at Mr. Coffee executives for directly profiting from the misfortunes of the common man in Ohio.
In Conclusion If you want low prices, you go to Wal Mart. But what does this do for our country? It puts American workers out of work! Wal Mart is using its' power to force Americans to make a false choice between good jobs and lower prices. Wal Mart's size has allowed it to remake the American economy, substituting its' narrow interests for honored American values, including good jobs, family-supporting wages and affordable health care.

1 comment:

Unknown said...

All of the comapanies had a choice. They could of chose not to sell thier products to Walmart. Or they could have elected to improve their process to reduce cst of manufacturing in america. Many of the products you mentioned, have very little labor involved in the manufacture of them. Particularly molded rubbermaid products. I am a believer in buying american products if the quality is as good and the price is competitive. No company should expect to compete if they can't step up to the plate. I would buy a US car from the big three anytime over any manufacture. Walmart does alot of things wrong, but forcing companies to meet cost targets of what customers will buy is not one of them. If they raised rubbermaid prices 80% as you indicated you believe they should have. People would have went elsewhere for less expensive brands. Then both Walmart and Rubbermaid would have lost. That doesn't make good economic sense. the problem with N.A. manufacturing is not walmart. It is the management at US manufacturing. Nobody wins when all they due is blae their challenger. They succee when the step upto the challenge head on and find a way to compete.