Creating Opportunity by Investing in American Jobs

U.S. Conference of Mayors, Washington, D.C.

By Bill Simon, President & CEO, Walmart U.S.

January 23, 2014

U.S. Conference of Mayors, Washington, D.C.

Good morning! Thanks so much for having me. It’s an honor to be with you.

This past year I’ve spoken to just about anyone who will listen about creating opportunity in America. But today I am really excited to be with the mayors. You are the people who get things done!

You do everything from educate kids to build parks to train your local workforce... This time of year—particularly this week—many of you are very busy plowing streets. As mayors, you are closest to the communities you serve. You are the problem solvers.

While we live in a country full of possibilities, we still face challenges. I think we can all agree that one of the biggest challenges facing us right now is the need for jobs. I believe we are at a pivotal moment in our nation’s history. Coming out of a devastating recession, we’ve seen spurts of growth, but not nearly enough. There’s been pressure on all of us. Our customers have felt it. We’ve felt it as an economy. We’ve felt it as a country.

In the service industry we saw people take any entry-level job available. Years later they find themselves still in those jobs. That’s why much of the discussion today is centered on raising entry-level wages. This is a fine discussion to have, I just don’t think it captures the whole point.

Most people in minimum wage jobs don’t want those jobs long-term…they want to see that those jobs create a future beyond their current role—an opportunity to advance. It’s not about where you start, it’s about how far you can go.

I think the last decade has shown that neither can we spend our way to opportunity, nor can we cut our way to opportunity. We have to grow our way to opportunity in America. If we don’t grow, the future for our kids is uncertain. 

American business has to lead that growth. It has to create that opportunity. At Walmart, we’re taking action and creating opportunity by investing in American jobs. So last January—exactly a year ago—I challenged the audience at the National Retail Federation’s annual conference to join us in a commitment to opportunity—the opportunities we create through our own jobs; the opportunities we can provide people who need jobs, including our nation’s veterans; and the incredible opportunity we have to support American manufacturing and to create more American manufacturing jobs.  

Today I’d like to update you on our progress, our next steps, and how we can all work together going forward.

Opportunity for Walmart Associates

First, opportunity for our own Walmart associates. We serve 140 million customers a week—your citizens, in your towns and cities. I am extremely proud of our associates and we are proud of our good jobs. Jobs, that contrary to popular belief, come with healthcare benefits—good health benefits, as you may have read recently. And every associate—full-time or part-time has access to a 401(k) plan, a bonus opportunity and even discounts on merchandise.

And over the years we’ve worked to build an company that recognizes our associates. If you work hard and show initiative, there is real opportunity to move up at Walmart.

More than 75% of our store management teams started as hourly associates. Each year, we promote 160,000 people and 40% of those promotions go to employees in their first year. That’s opportunity!

So, last year we introduced ways for our employees to better manage their careers at Walmart. Now we are ready to take their career development to the next level. We are creating more pathways to success—expanding education, training, and workforce development. We’ll be sharing more details in the coming months, so stay tuned!

Opportunity for Veterans

Second, last year we promised to offer a job to any honorably discharged veteran within his or her first 12 months off active duty. Launched on Memorial Day, we estimated that our commitment would result in hiring more than 100,000 veterans over the next five years. I’m proud to tell you that less than a year later, we’ve already hired nearly 30,000 veterans!

Veterans like Shaun Hope, who served as a combat medic in Afghanistan. Shaun heard about our hiring commitment and got a job with us as an overnight stocker in August–maybe not his dream job—but because of his hard work and medical training, within a month, he was promoted to become a pharmacy technician. And now—barely six months into his tenure with us—Shaun is in training to become an assistant store manager. Now that’s opportunity!

If any veterans in your towns are looking for jobs please send them our way. As a fellow veteran, I know these men and women are proven leaders and we need them on our team.

Opportunity for the American Worker by Expanding U.S. Manufacturing

The final initiative I’d like to spend most of my time talking about today is our commitment to help create jobs by expanding American manufacturing. 

Here’s why we are doing this. America has been a service economy for far too long. We can’t keep this up. We have to make things in America again. Making things is part of who we are. You see, we all identify with what we made in our hometowns. I'm from the Hartford, Connecticut area where we made Pratt & Whitney engines. And I guarantee you know what was made in your town. If you’re from Milwaukee…it's Harleys. Or If you're from Easton, Pennsylvania…it's Crayola.

Making things is not only a part of who we are, it is part of who we must be. And we can't afford to wait a minute longer. This is a challenging time for our country but it can be turned around. We can't wait for the circumstances to be perfect. They never will be.

Today, overseas, the middle class is growing and driving demand for consumer products.  This has increased wages and labor costs abroad. Meanwhile energy costs in the U.S. are lower than in many other places. Tax policies in some countries are changing and with higher transportation costs, it is increasingly necessary and efficient to build things closer to the point of consumption.

America is where the innovation is happening. The time is right to bring manufacturing back to the United States. One analyst, quoted in the Wall Street Journal last month said, “our favorite emerging market is middle America.”

At Walmart we believe that too. According to data from our suppliers, already two-thirds of what we buy at Walmart U.S. is made, sourced, or grown here.  Don’t let this surprise you—remember…we run a large grocery business. But we’re building on that and doing even more…

Last year we announced that we would buy an additional $50 billion in American products. That’s $50 billion more than we do today, 10 years from now. Let me put that into context for you:

We estimate that our $50 billion pledge in the 10th year will result in us buying an additional $250 billion, cumulatively, over the next 10 years. The Boston Consulting Group predicts that this $250 billion investment will create 1 million jobs, when you include the jobs in manufacturing and related services.

Let me tell you about someone who is already benefitting from our investment. David is a father of four and lives in Burlington, North Carolina. He had a job at a local printing facility that shut down. He and his wife were about to lose their home when in October he got a job with Kayser-Roth, a company that makes socks and legwear.  They are growing, in part, because of our decision to purchase more of their U.S. made socks. His managers have already approached him about a promotion. David says, “What this job has is opportunity. A chance to grow.  And that is important.”

Kayser-Roth is just one example of the terrific progress made this past year. Our suppliers are engaged. 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.

We have a great team leading this effort and over the past year we’ve seen that the math really does work in diverse categories from towels to shoes and curtains to light bulbs, televisions, and toys. 

Right now:

  • 72% of our suppliers believe that manufacturing in the U.S. will be cost favorable within four years or less. Seventy-two percent!
  • We have 40 different merchandising departments in active discussions with suppliers to manufacture their products right here in the USA. 
  • In August we held a manufacturing summit with nearly 1,500 attendees and representatives from 34 states.

Let me tell you about one of the first movers.  I’m pleased to announce that Kent Bicycles is bringing production from overseas to Clarendon, South Carolina. When at full capacity, in 2016 they will be making half-a-million bikes and they are already in discussions with suppliers who make their component parts for those bikes to create an onsite manufacturing hub.

Kent’s owner, Arnold Kamler, has been passionate about making this work. Because the bikes will be made in South Carolina, his shipping costs are less. He can do more of the assembly on his end vs. at the store.  Assembly time will be reduced by more than half. This is good news for American retailers… and Moms and Dads on Christmas Eve! Just think…soon your kids can ride bikes that were made in America again!

We don’t have to celebrate the past in U.S. manufacturing—we can create new opportunity now.

What’s Next? What Can the Mayors Do?

So what’s next? We’ve made good progress, but we have to be ready to meet the next challenges on the horizon.

Our suppliers tell us that:

  1. Some categories such as textiles or apparel are more difficult to bring back right now.
  2. Some crucial components that they need simply aren’t made here anymore.  
  3. They need assistance navigating state and local infrastructure. 

Support for Manufacturing Innovation 

So we’re taking steps to help solve those challenges. Today, we are announcing the creation of a $10 million fund to support American manufacturing and renewal. This fund will provide grants to innovators in the manufacturing sector over the next five years. If we want to grow manufacturing and help re-build America’s middle class, we need the brightest minds in our universities, in our think tanks, and in your towns to tackle these problems and come up with solutions.

Walmart and the Walmart Foundation will fund the program and work in collaboration with the U.S. Conference of Mayors to identify and award leaders in manufacturing innovation.  This program seeks to create new processes, ideas, and jobs that support America’s growing manufacturing footprint. 

Let’s work together to create opportunity. This program will launch in March and we look forward to working with you on this.

Second U.S. Manufacturing Summit

Next, I want to invite you to our second U.S. Manufacturing Summit in August in Denver, Colorado.

In your towns you may have flourishing businesses. But there may also be factories that aren’t operating at full capacity. At our summit, one of the things we’ll be doing is connecting manufacturers in need of component parts to factories with excess capacity.

Together, we have an opportunity to re-purpose or help add production to some of these factories. This will help rebuild the American supply chain to support U.S. manufacturing and create more jobs. Together, we can get this done. If you’d like more information, please give us a call.

I’ve worked a lot with leaders over the last year on manufacturing and the most successful are the ones who are personally involved and see this as an imperative. Interestingly, of the governors I’ve worked with, some of the most successful are former mayors.

As mayors, looking to bring opportunity to your towns, here are a few questions for you to ask yourselves: Can you provide training, apprenticeships, or new educational opportunities for your citizens? What is the business climate like in your city? Are there good tax policies? Is your local team ready to work with manufacturers? Just think. If you bring a factory to your town, it could be there for a generation. That’s a win that will last a long time in your city. That’s a legacy.

Thomas Edison once said that “opportunity looks a lot like hard work.”  This won’t be easy and it will take industry and government working together every level. If we do, we’ll remember this as the time we came together to change this country.

I believe that nothing less than our future is at stake. This is not a Republican or Democrat issue.  This is not a Walmart issue. This is an American issue. The time to move is now.

Let’s bring the jobs back. Let’s bring opportunity back. Let’s bring the pride back. I look forward to working with you.  Thank you.