A Story of WalMart, China, American Jobs and Marbles

[Bilko44]

Often people say that price is the only factor they use when purchasing a product. "A penny saved is a penny earned" they stress.

This is a story of what happened when one small company did business with WalMart.

In 2000, JABO, a company which manufactures industrial marbles (the rattle in spray paint cans), decorative marbles (those flat pieces of glass that decorate fish bowls and floral displays) and toy marbles (the marbles we kids played with on playgrounds) was very hopeful the new millennium would bring good fortune to its 132 employees at its plants in West Virginia and Ohio. They had contract with WalMart to supply 1,000's of bags of decorative marbles. In order to meet WalMart's delivery demands, JABO had completed a plant expansion and was operating 16 huge natural gas furnaces, many of them on a 24/7 basis.

WalMart's contract prompted a commitment to an expansion which was needed to serve the retail giant's needs. Profits for JABO were thin as the company worked to meet its product quotas even as rising fuel prices began to eat away at the bottom line. At least everyone had a job. That is, until WalMart paid a visit.

It was time to renew the production contract when WalMart executives informed JABO that they would have to drop the wholesale price if they were to continue the contract. Dave McCollough, operations manager of JABO was stunned. WalMart was well aware of rising energy costs, cost of living increases and increased health and benefit costs for American workers. What was going on?

WalMart informed JABO that they would allow the American company to continue the contract if they would meet a competitor's bid they had solicited from China.

On the surface, WalMart said it's the best price that they look at. In reality, it was WalMart playing dirty pool with the very people that fed WalMart's economy. Remember, in China, the marbles would be produced by cottage industries manned by a labor force including children with wages greatly less than American workers.

Lack of pollution controls in China is affecting our entire planet and China did not have to meet US environmental controls like JABO did. There were no Social Security taxes, employment benefits or medical plans in China to affect operating costs. The favorable balance of trade meant China could use fuel at a fraction of the cost of American energy.

So WalMart wasn't really comparing apples to apples, or, in this case, marbles to marbles. Instead, they were saying to America and its industries, work for less, move your standard of living to that of rural China and don't expect medical care or retirement benefits.

Now JABO faced the decision of its life and the consequences its work force would face. If JABO agreed to WalMart's terms, the company would exist a few more years as it slowly bled to death producing a product for WalMart below cost. If they refused to continue the contract JABO would be faced with massive layoffs and a huge debt repayment for facility expansion.

One way it would mean JABO would be in WalMart's pocket until the end came and the company failed, at which time, WalMart would pick up the phone and call China.

The other choice was to go it alone without WalMart, cut production and workers, renegotiate debt paybacks, look for new revenue sources and tough it out. At least this way JABO would be in control of their own destiny.

It is here, my dear reader, that JABO gained my undying respect.

They chose to go their own way, refusing WalMart's pressure tactics.

Today in 2006, JABO operates 6 furnaces and about 30 employees at their Reno, Ohio plant. They still produce industrial marbles and absolutely beautiful marbles for children and marble collectors. Of the 16 marble plants that once populated this area of West Virginia and Ohio, only 2 plants remain.

Did WalMart think they had anything to do with causing another hundred American workers to lose their jobs to China? How important was the price for a bag of marbles to WalMart? In case you're wondering, WalMart actually raised the price of the marbles, now that they control the market. Did that extra dime or quarter a bag justify what they are doing to the American worker?

WalMart used to have Buy American promotions in their stores. No more. That time passed along with the jobs of 1,000's of American workers.

The end of 2006 is just a few days away. JABO is about to close its books on the year. Dave, I am certain, will do everything he can to make 2007 a better year, if they can stay open.

And that, is why I think America has lost its sense of direction. Those one hundred workers that lost their jobs at JABO don't have a lot of money to spend at their local WalMart this year, do they?

[arbycoffee]

f u x k wally's world

[Sid]

wow that is some very interesting information....

[vespacar]

I like the way Jib jab says it, well once you get past the commerical, anyway!

http://www.jibjab.com/originals/orig...ab/movieid/122


Cheers,
James

[luckydog]

I seldom shop at Walmart, usually Publix for groceries and target fro regular goodies.

[johntofva]

We stand on the brink of tomorrow. The twenty century belonged to the United States. The twenty-first will belong to China. The time for action may have already past.

It was our industrial might that saved us during war. But it must also be said that during the great industrial age, factory workers lived in slums and by standards considered third world to us today. Those former U.S. citizens worked seven days a week and had to little to show for it. It is only that type of environment that can fuel low cost.

But other countries have survived and reinvented their selves with great success. "Made in the U.S." use to mean something. And if we are to survive, it must be made to mean something again. We think nothing of putting down $50,000 for a BMW or a Mercedes. Nor does it bother us to pay $5000 for a Breitling watch. That is because their brand name means something to us.

We can not blame China nor India. They are doing what is right for their nations. But what is the solution? What is the answer? Our leaders have tried to guide our industries into areas that will provide for the life styles we are accustomed. But will this save our nation? I do not know. But what I believe is; that one person can make a difference. I believe I can make a difference. And I believe you can make a difference.

I spend my money as local as possible. I shop in a grocery store and fill my cars in the county I live in, which helps employee my neighbors. I spend my money at retail stores in my state, which helps my state's revenue. And yes I buy "Made in the U.S." when possible. A simple idea.....maybe. But I love my neighbors.....and I love my state........and love my country.

I served in the military to protect my nation from foreign hostilities. Now is the time to serve my country as a citizens. Now is the time for us all to serve our country as citizens. By choosing how we spend our money, we make a difference. Because you and I together can add up to almost 250 million..............Look not outside, but inside.


Thanks for listening

John

[luckydog]

Most of the time when i call customer service, I get someone in India---some junk calls are from there also

Most of the banks here are owned by larger banks in other states.

Very few bigger businesses have their corporate headquarters here, Tropicana closed thier headquarters here in Bradenton and put a lot of white collar workers out of work.

Famous boat makers just moved to another state putting over 100 people out of work.

they move where the labor is cheaper and if you move with them you take a pay cut.

We own China 100's of billions of dollars and talk is they may switch to the Euro now.

Things were much simpler in the older days