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Wal-Mart's Pushing Manufacturers Back to the US

Image via <a href="">Fast Company</a>.
Image via Fast Company.

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The "Made in USA" movement has been percolating for years, but it's finally starting to gain traction as a series of financially-motivated companies have moved their business back to the US from overseas. In a lengthy article, Reuters points out that Wal-Mart, the same cost-cutting company that helped drive manufacturers to places like China and Bangladesh in search of cheap labor in the first place, is also proving instrumental in their return.

Wal-Mart is a retail titan and their current "Made in America" crusade is effecting real change in the retail industry. To be completely fair, manufacturers preceded Wal-Mart's campaign. "In many cases, Wal-Mart's suppliers had already decided to produce in the United States, as rising wages in China and other emerging economies, along with increased labor productivity and flexibility back home, eroded the allure of offshore production," reports Reuters. Regardless, Wal-Mart's growing enthusiasm (no doubt inspired by the reaction it sees from its shoppers) for Made in the US merchandise means that "reshoring" is moving quickly.

"Wal-Mart still declines to sign long-term contracts with suppliers, but its market power is so immense that companies will sometimes make investments based on expected demand from the retailer," says Reuters. "Also, Wal-Mart has helped some suppliers make contact with state economic development officials who can offer tax breaks or other incentives." One such business is a sock company that, per Wal-Mart's interest, is spending $20 million dollars on factories in Tennessee and Alabama. That's all without a purchase order or a contract; its CEO says he "trusts" the chain.
· Insight: Wal-Mart 'Made in America' drive follows suppliers' lead [Reuters]
· Walmart on Sustainability: 'Our Customers Don't Want To Pay More for Products' [Racked]