Wal-Mart: Unpatriotic or Lying Through Their Teeth?

Don’t you just love it when someone gets caught red-handed with cream squidging out of their mouth as they swipe that cream cake out of the fridge? Then they stand there and say ‘no, no, no, it wasn’t me at all’. Wal-Mart is doing exactly that and quite honestly it beggars belief that the people at the top of the company should imagine for one moment they aren’t going to have someone turn round to them and say that they have been telling fibs. Wal-Mart will just carry on lying until they go blue in the face.

Wal-Mart Goes Overseas

Wal-Mart  - Made in USA

Wal-Mart - Made in USA

Wal-Mart decided to go overseas in a bid to cut costs and sell cheaply-made products at high prices, cash in on the difference and make a mint. Manufacturing in Asia was lucrative, as it was for everyone. But, in a wave of criticism that followed in the wake of the financial crisis, they decided that they were not up for taking the flak from the public about how they had unpatriotically abandoned to country when they should have been producing back home for the boys.

Wal-Mart Back Home

Wal-Mart now tells us that they are “bringing jobs back to the US”. They are “leading an American renewal in manufacturing”. They have also stated that they are going to be purchasing $50-million worth of goods manufactured in the USA. The sum is really very little despite their upbeat hype and it’s $50 million over the next ten years, so that makes it even less. The economy is hardly going to change because Wal-Mart is bringing employment back to the USA over a period of a decade. Whoopee! Get down to Wal-Mart and buy the bunting, please (produced in China, of course).

The sum is so insignificant that if it were stolen, the Walton heirs wouldn’t even notice it had gone, would they? Are we supposed to rejoice at the faithful patriotism of the company that sells more groceries than manufactured goods anyhow? Producing manufactured goods is not a major part of their sales and so whether they are bringing that home or not is of little significance to the US economy.

Publicity Stunt?

But, after years of forcing, coercing and demanding that suppliers relocate to offshore manufacturing sites in Asia in order to reduce costs to a minimum and increase profits to a maximum, they have now announced that they are returning back to the USA.

Announced in true publicity-stunt fashion as if they were doing it for the good of the economy, they might just have pulled it all off had it not been discovered that in actual fact they were returning home anyhow. Prices in China have sometimes increased by +25% due to wage increases. The Chinese currency has also risen against the dollar and you only need to add the transport costs. The manufacturing can be done at cheaper the cost in the US today and Wal-Mart has done its math already. It can shore off about 15% on average today from the current cost of producing in China.

We all knew that producing at home was better than going to China, but Wal-Mart was dead set on getting their profits increased. We all knew that producing at home meant a reduced impact on the environment (if they ever cared about that). We all knew that manufacturing on US soil meant avoiding delays and waiting time and increasing reactivity to production changes. We all knew that US plants were more energy-efficient than Chinese ones. We all knew that, except Wal-Mart, perhaps.

Made in the USA?

Made in the USA?

But, please Wal-Mart don’t try to pull the retailer wool over the US’s eyes. We also all know that you wouldn’t be bringing the manufacturing home just to give the domestic market the jobs it sorely needs. If that had been the case, they would have done it years ago when it was even more needed instead of upping sticks and doing a runner double-quick to greener pastures.

We have known for years that energy prices have gone down and will continue to fall in the US even more in the future and that the US is able to be competitive today against the Asian sweatshops simply because they are going through their own industrialization process there with the workers demanding their rights and privileges.

The US can turn itself back into a production hub against the Chinese dragon. But, it won’t be able to do it on $50 million over the next decade.

Wal-Mart is rejoicing at the fact that it’s coming home like the prodigal son to the good old US of A. But, their effort is nothing more than just that: a mere effort and cosmetic to boot. Patching up the cracks is like the old Grandma that buys wrinkle cream. It’s already too late for it to do anything of any worth but the psychological cosmetics has a calming effect on her. Maybe that’s what the US will think about Wal-Mart coming home to daddy.

Wal-Mart: Always low prices, always! Perhaps, but at what cost?

Wal-Mart Woes

Wal-Mart has been caught with the cream dripping out their fat-cat mouths and they have the crumbs their too to prove it. They should have known better than to imagine that we would believe anything that they say these days.

  • Back in May they got fined $82 million for dumping waste in California and Missouri. Although the trial took ten years to see them slapped with a fine for that wrong-doing. Then they through toxic waste in the trash bins rather than having it treated. It’s so much easier to make millions and billions when you don’t have to respect the rules.
  • The working conditions of their employees are deplorable and they have seen strike action throughout stores over the past year (resulting in workers being dismissed because they had supposedly incited others to strike).
  • The Bangladeshi textile factory collapse caused major criticism as Wal-Mart decided that it wasn’t necessary to pursue collective action of US producers that have overseas suppliers to try to enforce stricter controls and regulations regarding safety.

Wal-Mart has had enough of the cream pie when it is the largest grocery retailer in the USA still today, preciously guarding 63% of the market today and raking in $258 billion in sales every year on average. Total revenue if worth $469 billion per year today. Not bad for a company that believed that overseas producers were better than home-based ones. Not bad for a company that does a make-believe act of contrition to make the US public think that they are truly sorry for what they have done by bringing the jobs home to America once again. It’s the majority of the people that shop at stores like Wal-Mart that allow and enable them to override certain questions that are nothing more than morality or patriotism.

But, those both go out the window when it’s a question of making a quick buck, don’t they?

Perhaps the Waltons should remember that they were made the richest people in America because they have 63% of the share of the retail market in the US sewn up by Wal-Mart today. Perhaps they should remember that they inherited their 9th place (Alice Walton), 8th place (S. Robson Walton) and the 7th place (Jim Walton) in the top ten richest people in the USA today simply because the average Joe is going to Wal-Mart to do the weekly groceries. Let’s hope that they actually know why they are going there.

About The Author

tothetick

Professional team of writers/analysts analyzing the financial markets.

Comment on Facebook

Leave A Response

* Denotes Required Field