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Union Group Attacks Wal-Mart Over Goods Made in China

AP
Thursday, 31 May 2007 | 5:08 PM ET

Union-backed critics of Wal-Mart Stores Inc. are using a made-in-America campaign started by late founder Sam Walton in the 1980s to attack the global retailer for buying heavily from China.

WakeUpWalMart.com unveiled Thursday what it called an effort to turn conservatives against the retailer with ads alleging Wal-Mart had turned its back on Walton's values since he passed away in 1992 by increasing its buying overseas.

In materials provided to reporters on the sidelines of a Wal-Mart media conference, the group included a 1985 press release from Sam Walton in which he criticizes the loss of U.S. jobs to imports and pledges to buy American-made products whenever possible to protect domestic manufacturing jobs.

"We can restore our manufacturing capacity, improve our national economy and renew our pride in American craftsmanship," Walton wrote in a March 1985 open letter that urged manufacturers to work with retailers to bring as many competitive American products to the shelves as possible.

Wal-Mart said it is still committed to buying from suppliers that manufacture in the United States whenever possible.

"However, today we're a global company and it is necessary to source globally to ensure that we meet the needs and wants of our customers," Wal-Mart spokesman David Tovar said.

In recent years, Wal-Mart has bought roughly $9 billion in goods from China directly and another $9 billion indirectly, or goods produced in China for another company and then sold to Wal-Mart, Wal-Mart International spokeswoman Beth Keck said.

Keck said exports of U.S. goods were also increasing to fill Wal-Mart shelves in the 13 countries where it has stores. That includes beef from Kansas sold in Japan and American dairy products sold in Mexico, she said.

When Japan eased restrictions on U.S. beef last year, Wal-Mart's subsidiary Seiyu was the first retailer to resume offering American beef. "That's going very well," she said.

Wal-Mart is not alone in using the lower cost of China production to push down shelf prices for consumer goods in the United States, said China trade expert Peter Morici, a business professor at the University of Maryland and the former chief economist for the U.S. International Trade Commission.

But Morici, a critic of the burgeoning U.S. trade deficit with China, said Wal-Mart's size and supply-chain expertise make it a leader among domestic retailers in what he called pressuring suppliers to lower costs by moving production to China.

"Wal-Mart is the poster child of outsourcing," Morici told The Associated Press.

Morici said Wal-Mart is acting against its own interests by sourcing from China. He said the loss of U.S. manufacturing jobs is eroding the buying power of the same working people who make up Wal-Mart's core customers.

Wal-Mart's Tovar said WakeUpWalMart.com's two top officers, who were in Bentonville on the eve of Wal-Mart's annual shareholder meeting, were spending "hard-earned union member dues" on a publicity stunt.

"They know that Wal-Mart creates thousands of jobs, offers competitive wages to our 1.3 million associates, reduces health care costs through $4 generic medicines and in-store health clinics, and provides leadership on environmental sustainability," Tovar said.

WakeUpWalMart.com said it would be airing a 30-second television ad in 30 markets in the South and Midwest this summer, mainly during local news programs, for a total cost of $1 million.

The campaign targets conservatives in the South and among Republicans, who WakeUpWalMart.com believe are receptive to criticism of American companies buying heavily from China rather than from U.S. manufacturers.

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