Top Retailer Wal-Mart a Target Of Strong `Buy American' Push
THE "Buy American" movement has increased purchases of goods made in the United States, but it is also creating sparks in corporate boardrooms.
Union officials say that when Wal-Mart Stores Inc., the nation's largest retailer, convenes its annual meeting today in Fayetteville, Ark., they will protest the company's purchase of more than 300 products from Communist-ruled China.
Wal-Mart, which has bragged for years that it gives preference to American-made goods, calls the union action "unnecessary," "ideological," and "self-interested."
But union members, protesting that Wal-Mart is boosting profits by exploiting cheap, foreign labor, refuse to back down.
The union tiff with Wal-Mart signals a more aggressive posture by some "Buy American" advocates, whose efforts have already dampened the sales of Hondas and Nissans, while boosting output at US factories building Ford cars and Chrysler minivans.
"We've gotten the attention of the American consumer, who now understands it is important to be aware of what you are buying," says Brian Flood, executive director of the Made in the USA Foundation.
Bob Swift, executive director of the Crafted With Pride in the USA Council Inc., says older Americans always saw the importance of buying US-made goods, but now young people are becoming aware. He says a recent TV ad campaign, linking the purchase of foreign-made products with the loss of US jobs, caused a big jump in the number of Americans who prefer US-made products. So did President Bush's trip to Japan. Proxy statement sought
All this may come to a head today in Arkansas, when the Food & Allied Service Trades (FAST), a department of the AFL-CIO, tries to get a proxy statement adopted at Wal-Mart's annual meeting.
Jeffrey Fiedler, secretary-treasurer of FAST, says his 3.5 million-member union singled out Wal-Mart for examination for two reasons: As the largest merchandiser, it is a national trend-setter, and it claims to always prefer American goods when they are available at the right price and quality.
Mr. Fiedler says: "We gathered up all the information on the company's `Buy American' program, and then started to go its stores.... We quickly saw that the reality differed greatly from the company's marketing program.... While there, we saw a phenomenal amount of stuff from China. ... This company wraps itself in the American flag, and we saw that there were many different flags flying in this store."
In its proxy solicitation, FAST lists 314 categories of products imported from China by Wal-Mart in 1990 and 1991, including adjustable wrenches, air mattresses, alarm clocks, wooden bottoms for rockers, woven nylon luggage, and youths' vinyl Western boots.
Fiedler says one of the great ironies is Wal-Mart's purchase of US-style blue jeans from a state-owned enterprise in China.
Perhaps the most sensitive part of FAST's argument with Wal-Mart comes under the heading of "forced labor." FAST officials worry that with the Chinese government using prison labor to manufacture a wide variety of goods, including shoes, flashlights, textiles, wine, and TV circuit boards, some of them could find their way onto Wal-Mart shelves.
The company strongly denies that. "It is the company's policy not to order or accept any goods, articles, or merchandise produced by forced Chinese labor," says a statement from Wal-Mart. "The company monitors compliance with this policy."
The statement adds: "Nonetheless, to avoid unnecessary friction, management informed FAST that it would review the entire matter with the company's board of directors. Despite the company's efforts to address FAST's concerns with respect to this issue, FAST has proceeded with its proxy solicitation."
Except for the statement, Wal-Mart officials declined to discuss FAST's complaints.
Meanwhile, some of America's largest companies are watching the fallout from the Buy American movement with increasing interest.
At Ford Motor Company, Joel Pitcoff, research and analysis manager, closely tracks sales of both domestic and foreign-nameplate cars and trucks.
During the first four months of this year, sales of US-name plate cars and trucks were up 1.3 percent, while sales of Japanese-branded vehicles were down 0.8 percent, Mr. Pitcoff notes. Slump in sales
In the auto market, foreign brands were holding steady at the beginning of the year; but in March and April, as the Buy American movement drew wider attention, sales of foreign cars began to slump.
Pitcoff says Japanese companies should have gained market share this year because US firms toughened sales policies with automobile rental concerns, which buy about 1 million cars a year. Instead, US companies gained market share while reducing fleet sales.
Ford surveys indicate why. One year ago, a Ford survey of import owners asked where they would go first to buy their next car. At that time, 34 percent said they would first try a domestic auto dealer. The same survey, repeated in March and April, found that figure now has climbed to 44 percent.
Another finding: One year ago, 40 percent of the owners of domestic makes said they would never buy a foreign car. That's now 50 percent.