Questions from Walmart’s strange Denver manufacturing summit

By Bart Taylor | Aug 19, 2014

Walmart is a study in contrast. For shareholders and Wall St. the company’s a rock star. For consumers, Walmart’s high-volume low-margin model has helped family budgets go further, at a time when wages are stagnant for a big majority of Americans.

But Walmart stores have also changed America’s economic fabric by forcing smaller retailers out of business. The iconic downtown retailer in small town America has effectively disappeared. Shopping at Walmart may extend a family budget but working at Walmart does it no favors.

Walmart’s wage scale is especially annoying to AFL-CIO union boss Richard Trumka, who trumpeted last week, “If Walmart is truly committed to rebuilding the American middle class, it can start with its own workers, most of whom make less than $25,000/year and struggle to make ends meet.”

Trumka was commenting on the occasion of Walmart’s annual manufacturing summit, held this year in Denver. If you missed it, you’re not alone. The event was largely ignored by the press (not a single mention in the Denver Business Journal, one article in the Denver Post), and strangely under-promoted by Denver and Colorado officials including the state’s economic and manufacturing entities. Walmart’s the world’s largest company, measured in revenue. Number one. Imagine Apple (18), Toyota (13) or Amazon (66) hosting an annual conference in Denver.

Denver’s Mayor Michael Hancock was visibly surprised to see several mayoral colleagues in the front rows during his opening remarks to delegates on day of the summit - and said as much. Governors from around the country were also in the crowd - including New Mexico’s Susana Martinez, who also addressed delegates and spoke of her state’s emphasis on manufacturing. Colorado Governor John Hickenlooper wasn’t on the agenda.

Why the uninterested, awkward reception from the Summit’s home state leadership?

One possibility is that state and local officials didn’t see value in jumping in to support a Walmart supply chain event, though plenty of other state-level, high-power contingents saw fit to fly to Denver to participate. Sacramento’s Mayor, Kevin Johnson, acted more the host, and didn’t miss the chance to point out the Denver Mayor’s quick exit after his remarks.

Another is that they simply weren’t invited to participate in a meaningful way. Clearly Governor Martinez, as with Mr. Johnson, has been involved with Walmart before. Yet it was bizarre to listen to Walmart executives and Martinez laud New Mexico’s manufacturing efforts - from Colorado. It’s true that the Hickenlooper agenda has focused on ‘advanced’ manufacturing even though his state is a national leader in less high-tech goods-producing sectors (think food and beverage). But still. Walmart could have done more to highlight the host state’s manufacturing prowess.

Was Colorado business not invited? Of the hundreds of companies exhibiting in the convention center, only a handful was from Colorado. (Qualtek was one; read Chris Fagnant’s perspective here.) The Summit’s objective - connecting U.S.-based manufacturers with each other and supply chain partners to build more U.S.-made stuff that ends up in Walmart stores - would have benefitted from the presence of more local companies

Clearly the mission to connect industry players to juice U.S. manufacturing is legitimate. Walmart’s national effort is commendable. But as at least a couple of the speakers in the opening session confessed, finding suppliers, or contract manufacturers, within a ‘two-hour’ drive of a maker operation can make the biggest difference.

It will be left to local initiatives, happening across the country, to facilitate the connections that will get U.S. manufacturing off the mat and moving ahead. I wrote of two Colorado events last week that should lead to very positive outcomes. Mayor Hancock mentioned one the city is involved with - the Colorado Apparel Manufacturing Summit, October 9 in Denver.

With a slate of events planned in the weeks ahead, industry and it’s policy and development partners will have ample opportunity to do what Walmart could not: bring together the local ecosystem in a celebration of the possibilities.

And leave the clenched-teeth behind.