[lbo-talk] Walmart, China and American De-industrialization

Dwayne Monroe idoru345 at yahoo.com
Thu Nov 18 16:59:44 PST 2004


The other night, on American "public" television, I watched a documentary about the Walmart retail chain.

Here's a link -

<http://www.pbs.org/wgbh/pages/frontline/shows/walmart/ >

The program began in the usual way things do when Walmart (and, as a close second, the Target chain) is the topic: discussing the troubles other retailers - even quite large and traditionally dominant ones such as Sears - are having keeping pace and retaining market share. Low paying jobs were discussed and, intriguingly, the way Walmart has managed to completely flip the past relationship between suppliers and retailers in which suppliers gave the orders.

Now Walmart, using the threatened sanction of denied shelf space, can demand lower and lower prices from their suppliers, driving some out of business and many others to relocate their manufacturing facilities to non American locations - principally China.

This element of the Walmart story - the switching of old supplier/retailer positions of dominance and the direct, explicit pressure Walmart places upon suppliers to move their manufacturing capacity to China - was something I was completely unaware of.

The correspondent traveled to southern China and visited factories set up by American firms to maintain profitability as Walmart continues to demand lower prices on goods.

The story told was always the same: the margins were getting thinner and thinner, Walmart demands that prices continually fall and suggested, if we were experiencing problems meeting their desired price points, relocating to China.

So entire industries are being dismantled and moved to meet the profitability requirements of the Walmart/Target machine.

Inter-capitalist exploitation is nothing new of course but to see this process occur at high speed in real time and on such an immense scale, with devastating consequences upon American manufacturing employment and competence is quite stunning.

I don't suppose the US' manufacturing base will be completely hollowed out but I don't think it's clear yet how far this de-industrialization process will go.

.d.



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