Walmart Spurs New Bicycle Plant in South Carolina

Joe Weinlick
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In a move that is expected to create 175 manufacturing jobs in Columbia, South Carolina, retail giant Walmart recently announced a new collaboration with bicycle manufacturer Kent International to build a domestic manufacturing plant. Vowing to invest roughly $4.5 million in the venture, Walmart's move to help secure jobs for American workers is part of its Buy American initiative—a campaign that focuses on buying products from domestic sources for its network of nearly five thousand Walmart and Sam's Club locations. This Walmart news couldn't come at a better time for the country's economy.

The idea for this campaign was first born in 1984 when Bill Clinton, then governor of Arkansas, asked the retailer's founder, Sam Walton, to buy a failing garment factory in the state. The move was expected to save many jobs and keep the company from declaring bankruptcy. Walmart's campaign to support US manufacturing saw a few successes but was slow to take off. Walmart news during that era typically focused on claims that Walmart placed more emphasis on buying from offshore sources instead of opting for American-made goods—the exact opposite of Walton's objective. In fact, the whole idea for domestic sourcing went nearly dormant until early in 2013 when it was revived by a new generation of Walmart brass.

Working with this bicycle manufacturer is just the tip of the iceberg. In a series of commercials airing during the 2014 Winter Olympics, Walmart reiterated its goals of the program and its commitment to the American economy. Over the next decade, Walmart plans to source roughly $250 billion in additional manufactured goods from American factories, eventually creating jobs for up to one hundred thousand veterans and increasing consumer spending. Walmart claims to currently buy two-thirds of its products from vendors within the United States.

Half of all bicycles sold in the United States are sold by Walmart, which is Kent International's biggest customer. Bicycle manufacturer Kent is a force to be reckoned with, even without Walmart's clout and influence, distributing its products throughout large retail chains like Toys-R-Us. Kent International began manufacturing bikes back in the 1970s, although by the 1990s, the cheap labor and materials available offshore led the company to outsource the production of its line to bicycle manufacturers in China and the Asian peninsula. Currently, the company imports nearly three million bicycles each year, but with its new collaboration with Walmart and the opening of the new US plant, Kent will be able to sell those bikes overseas and rely on bikes made in the forthcoming South Carolina plant to provide for the demand for its products domestically.

The site for the new Kent International factory is a dream for bicycle manufacturers, although it was chosen after much deliberation. The South Carolina site was eventually selected due to a combination of factors, including the area's 12.2 percent unemployment rate and tax incentives from the state as well as its accessibility to a seaport for receivables. In an area where minimum wage is $7.25 per hour, jobs with this bicycle manufacturer are slated to pay substantially more, although an exact range has not been announced. The company projects that when it reaches full production, it will produce close to five hundred thousand bicycles per year.


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