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by bbor
846 days ago
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This a great, well researched response, and I don’t disagree with the sentiment, but I think we should be careful not go give these companies too much credit. America has, understandably, been investing less in manufacturing over time at a roughly steady rate of decline: https://www.stlouisfed.org/on-the-economy/2017/april/us-manu... manufacturing's share of nominal gross domestic product (GDP) has dropped from 28.1 percent in 1953 to just 12 percent in 2015
So I don’t think it started in the 90s with walmart. Although the Fed makes an interesting argument in that article: we don’t manufacture less, we manufacture the same but it’s just worth way less as inflation ticks along. They describe American manufacturing as “fairly constant”, which I think would be considered a very hot take by most Americans |
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One example: Place a massive order beyond the capability of the supplier to meet the demand but at a premium price to incentivize them to try anyway. Then cancel at the last minute when production is almost finished but doesn't quite meet the original quantity ordered. Finally come back a few weeks / months later and offer to buy the resulting overstock at a deeply discounted price.
Obviously the blame doesn't all belong to Walmart but when a company is struggling and desperate it only takes a couple of deals like that to put them on a fast track to liquidation of their assets until all that remains is a company dedicated to marketing imported products under a previously prestigious brand.
The company I have specific knowledge about, Rawlings Sporting Goods, shut down most of their US manufacturing at the end of the 1990s and moved everything to China. Walmart had a big hand in driving the nails in the coffin of that ~80 year old company.