story by Michael Tilley
mtilley@thecitywire.com
Gov. Mike Beebe said in late August he was optimistic Arkansas would soon see results from job recruitment efforts associated with the Wal-Mart manufacturing summit. The optimism was not unfounded.
Grant Tennille, executive director of the Arkansas Economic Development Commission, told The City Wire that an announcement is likely before the end of the month on one company planning to set up manufacturing operations in Northwest Arkansas. Tennille said a second company is “really, really close” to making a commitment to Arkansas.
Beebe was one of eight state governors to attend the “U.S. Manufacturing Summit” in Orlando, Fla., that was held Aug. 22-23. The event connected economic development officials from 36 states with about 600 Wal-Mart suppliers and retail vendors.
The summit was the first high-profile public event held by Wal-Mart following the Jan. 15, 2013, company pledge to purchase in the next 10 years an additional $50 billion in U.S.-made goods. Company officials have said they hope to boost U.S. manufacturing – often referred to as “onshoring” – by purchasing more sporting goods, apparel basics, storage products, paper products, textiles, furniture and higher-end appliances.
Tennille said the two manufacturing companies are in the plastics extrusion/molding sector and “do a lot of high-volume work” for Bentonville-based Wal-Mart Stores Inc. And while there will be a “relatively smaller number of jobs” with the two deals, Tennille said they are “good-paying jobs.” He also said the jobs number could grow if and when the companies move more of their operations to the U.S.
Some operations – especially those that are high-volume providers to Wal-Mart or suppliers to the retailer – that move back the U.S. will have to do so in a way as not to disrupt the supply chain.
“Hopefully, as they are able to move that (production) back in stages, then we are able to see that (jobs number) grow,” Tennille explained.
Beebe, following a Tuesday jobs announcement in Fort Smith, said he spoke Monday afternoon to representatives of the company planning to move some production to Arkansas.
“Oh yeah,” Beebe said emphatically when asked if the Wal-Mart onshoring effort will produce results for Arkansas. Later in the interview, Beebe said, “I’m very proud of Wal-Mart and Bill Simon.”
Simon is the president and CEO of Walmart U.S.
Tennille is not surprised two announcements may happen in the next few weeks. He said Wal-Mart is working with suppliers and in some cases agreeing to longer-term contracts for companies that move production back to the U.S.
“I’m not surprised that we’re getting results so quickly because what Wal-Mart is doing is not window dressing. This is real. They are looking at all suppliers, from top to bottom, and figuring out what may work. ... They might, just as an example, move them (supplier) from a one-year to a three-year contract if they bring some of that (production) back over here,” Tennille explained.
Randy Hargrove, director of national media relations for Wal-Mart, confirmed that the retailer is working with suppliers to incentivize onshoring. Hargrove provided the following statement to The City Wire:
“We can collaborate with manufacturers, make longer term product commitments on basic goods and help connect them with the best resources so they can make the most informed decisions about capital investments. One of the benefits to producing closer to home is responding to trends and seasonal business trends and customer demand changes. Having that flexibility is great for the customer, supplier and meeting customer needs.”