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Big-Box Stores, Other Retailers Have Collective Power to Pause Threats Against China—and Profit Afterward

Written by barellis   
Monday, 10 May 2021 11:40

Big-Box Stores, Other Retailers Have Collective Power to Pause Threats Against China—and Profit Afterward

When both President Biden and House members strongly urge ‘out-competing’ China, let’s get to it.


By Barbara G. Ellis, Ph.D. 

00 May 21


Because of many Americans’ rising concern about U.S. increasing nuclear threats against China—ostensibly because it is working to replace us in world trade—it’s a mystery why CEOs of Walmart, Target, and other big-box stores, and small retailers have yet to form a consortium pausing all the war talk by fighting back. To create a crash program out-producing most of the Chinese-made household goods on their shelves, carousels, and aisles. And profit afterward from resurrected sales, both foreign and domestic.


President Biden just gave such a consortium a boost a few days ago when he told Congress:


“There’s no reason the blades for wind turbines can’t be built in Pittsburgh instead of Beijing. No reason why American workers can’t lead the world in the production of electric vehicles and batteries. …American tax dollars are going to be used to buy American products made in America that create American jobs.”


So did two bipartisan leaders of the Senate Foreign Relations Committee—chair Bob Menendez (D) and Jim Risch (R)—in hoppering the Strategic Competition Act of 2021. Menendez said the $1.1 billion bill over 2022 to 2026, the bill would be:


“…an unprecedented bipartisan effort to mobilize al U.S. strategic, economic, and diplomatic tools for an Indo-Pacific strategy that will allow our nation to truly confront the challenges China poses to our national and economic security…and invest in our ability to out-compete China.”


Collectively, retailers may not realize it, but they have as much clout and profits (perhaps more) than the military-industrial complex and war-hawking civilian cabal quietly directing U. S. foreign policy and urging the Biden government to unleash the Pentagon and vaporize China—without concern it will take Planet Earth with it. Walmart alone registered $129.3 billion in gross profits last year.


Currently, nearly every big-box store and neighborhood shops are packed with Chinese-made goods—clothing, tools, and home appliances to furniture, electronic products, and sporting goods. A recent shopping trip to my local Bi-Mart revealed all of these and much, much more: weight scales, safes, grills, space heaters/ACs and fans, television sets and radios, camping gear, toys, COVID masks and vinyl gloves, medical equipment, jewelry, clocks and wristwatches—and packaged food staples.


Just how dependent millions of stores are on China for household goods was shown last December when Walmart reported that it furnished nearly 80 percent of their wares. Most store executives and their buyers know India and other third-world countries are scarcely one-stop supply chains as is China. Most specialize in only one or two products.


Doing Nothing Means High Risks to Retailers

A war wipeout aside, a sudden presidential executive order of a boycott or sky-high tariffs on Chinese goods would immediately bankrupt most major, volume-selling retailers, along with millions of smaller shops. And what if China stopped selling to U.S. retailers, diverting these products to other markets?


Such measures would mean almost empty shelves and explain why many big-box executives and employees may be trembling at a U.S.-China conflict. Veteran retailers haven’t forgotten the deaths of two colossal forbears—Montgomery Ward and Sears Roebuck. They were the Amazons of the 1900-2000 eras in both mail-order sales from rural customers and gigantic brick-and-mortar stores for urban bargain shoppers. The advent of Walmart/K-Mart/Amazon big-box operations, and mergers, stripped them of their customers.


Unfortunately, American sales agents working the global markets have almost nothing in their sample cases so far because too many corporations moved operations to impoverished countries—especially China—to save money increasing profits for stockholders and top management. Those moves did save billions on labor, safety, R&D, factory upgrades, maintenance, and replacing aging machinery and buildings.


These decision-makers apparently never expected China to develop its own humming factories, much less outsell them in producing a cornucopia of household goods fetching low, low wholesale prices. Not counting high-tech electronic goods, Chinese enterprise has left this country almost as barren of American-made household goods as it was before the Revolutionary War when Britain barred industrial startups to protect its factories and profits.


A store’s constant dependence on reliable suppliers increases costs, something I learned working in my family’s childrens-wear garment factory. Suppliers charged what the traffic would bear for fabrics, thread, snaps, and shipping boxes. We had to trust suppliers’ product quality, as well as their stability and longevity. Deliveries were not always on time. Sudden price hikes—never did they drop—on those supplies forced my parents to raise wholesale prices, sometimes causing them to lose both large and small stores to competitors.


The only way that is possible these days, it would seem, is if American corporations, cottage industries, co-ops, and budding inventors formed a mighty trading consortium and returned to the halcyon years of the late 1800s and early 1900s when this country was fast-becoming an incomparable world beater in trade.


That reality slipped away the moment major corporations and their stockholders and supply chains got greedy.


First came moving operations overseas. The Economic Policy Institute estimated “700,000 jobs [were] lost to China alone in Trump’s first two years.” And most signs indicate those companies are not coming back. So when America’s Captains of Industry and the 1% rage against China’s trading ascent, they have only themselves to blame.


Second, many remaining corporations today have leadership heavily addicted—or forced into—to stock-buyback profiteering to boost stock prices for their companies. Even four years ago, Business Insider reported that Standard & Poor 500 companies from 2003 to 2012 spent 54 percent of their profits on this casino game. The result: a catastrophic drop in assets spent on product sales and service, R&D for new goods and services, and upgrading current ones. Leaders borrowing cash for buybacks have further stripped assets and may now be headed for acquisitions and mergers.


A Crash Program of Startups for Producing Goods

So why not “out-compete” China with a crash program led by retailers to producehousehold goods for once which can be turned out almost immediately in every town and city by non-tech Americans using with “old-fashioned” tools like sewing machines and basement or garage-based enterprises?


More important, such a crash project in producing household goods need not come from waiting the usual months and years for President and Congress to act and control operations. Instead, initially it would come from large and small retailers collectivelylaunching a nationwide, WWII-like Manhattan project to start by replacing all their “Made-in-China” household products.


Our history is full of enterprise. Consider what those defiant, resourceful, hard-working American colonists did despite British rule, as previously noted. They ignored its colonial enforcers and quietly produced bedsteads and cabinets, pans and stoves, clothing and clocks, nails, knives, water pumps and plows, saddles and horseshoes—all vital household goods for survival. And they did it on their own nickel because Congress, a president, and American tax revenues had yet to come.


Consider, too, today’s COVID vaccines. If Big Pharma could produce them for millions within a few months, a retailer consortium certainly ought to do the same to replicate Chinese-made household merchandise. Impossible? Not at all with America’s enterprising spirit and some cash borrowed from a retailers’ consortium investment pool for immediate repayment of the grubstake.


The startup doesn’t have to be complicated or require thousands. My parents’ successful Northwest factory started in a large two-story barn and 10 acres bought at a foreclosure auction. They remodeled it to withstand the weight of used power-sewing and serging machines, as well as upstairs quarters for a sizable cutting table and machinery, storage space for fabrics and finished garments, and shipping boxes. The office was our kitchen, our living quarters next to the production room. Dad did fabric cutting, sales, packing, and billing. Mom and a neighbor did the sewing. I was assigned quality control (cutting threads, checking snaps). Hard-driving descendants of colonial enterprise, they sold the business for a small fortune after nearly 20 years of operations.


Here’s how a startup could begin today.


A consortium would duplicate that history of “necessity being the mother (and father) of inventions.” Let’s remember that major products were born on kitchen tables (Timex ) or in backyard workshops (Ford ), empty hangars (Costco ), garage stores (Bi-Mart ), from an ambitious employee (Walgreens ), a visionary employee (Walmart), and a 60-year-old department store janitor (Hoover vacuums ). Two women invented a pair of vital kitchen appliances such as the refrigerator (Florence Parpart) and the dishwasher (Josephine Cochrane).


As master inventor Thomas Edison pointed out: “Genius is one percent inspiration and 99 percent perspiration,” underscoring that an idea requires persistence and hard work whether making household or electronic goods. Interestingly, Popular Mechanics(2021 circulation: 1.2 million ) has played major role in the process in its 119 yearsMicrosoft , for instance. The monthly magazine continues to inspire budding inventors and engineers of whatever age.


For starters, a retailers' consortium has manifests of all “Made in China” goods in prospective members' stores. They should be photographed for online display so they can be duplicated in someone’s basement, garage, or abandoned building.


Heres How to Start a Startup

The next step for a consortium would be selecting a six-person “board of bosses” in a virtual meeting of stores. These would be factory-experienced people to sort out needed product lines, locate suppliers of raw materials and tools, and find safe production sites needing little upgrading. Today, almost every city and town have boarded-up buildings and shops—and owners desperate for tenants.


As for operations, by April 9.7 million are drawing unemployment checks. To attract them into startups, a flier could be included with those checks describing the wide span of household products. Side 1 would contain URLs displaying their photographs. Side 2 would include URLs for basic bookkeeping methods, tax requirements, and information from the U.S. Small Business Administration. The same flier could be mailed to high schools, community colleges, and university mechanical engineering departments. To save promotional dollars, social media certainly is the best avenue for finding qualified prospects who are jobless, restless, and irritable, and willing to work at anything rather than sitting in despair at home.


Employees could be drawn by an email lottery from responses and resumés. Those hired should given the same kind of heroic accolades now accorded to COVID’s front-line staffers. They are in the front lines against a nuclear war. A major byproduct of such a hiring campaign would be thousands of jobs—invention to production and sales. Apple had 147,000 full-timers alone in the U.S. last year to produce its many devices—and is still hiring. A consortium’s thousands of recruits would increase local purchases and local economies. Not to mention increasing revenues for federal, state, and local governments.


Financing a retailer consortium’s Made-in-USA campaign may seem to be an overwhelming challenge without obtaining federal subsidies, especially with a crash program’s usual tight deadline. But not necessarily.


Six years ago Walmart pledged to buy $250 billion in American-made goods, but the offer apparently went begging because of the dearth of such products. But what if that offer became seed-money to create a pool of billions from consortium members to invest in products from winning prototypes for each product line? The money would be spent for production costs, marketing, and deliveries. The consortium’s investment pool would be refilled either with repayments from profits in cash or stocks.


Moreover, if NATO can demand its 30 members contribute 2 percent of their GDP (gross national products) for war preparations, each consortium member certainly can afford to contribute at least 2 per cent of their GDP to halt U.S. war preparations by out-competing the Chinese with American-made household goods for this country and global markets. And trigger startups in other product lines, large or small, simple or complex.


If this crash project were started in late-May, heavily promoted in member stores and mailings, some products might be ready for Christmas sales.


Most important of all, the retailer consortium project could be echoed by producing not just blades for wind turbines, as Biden suggested, but the turbines themselves and far larger products. Who doesn’t yearn for a spiffy electric car selling for $5,000? A laptop for $200?


The U.S. can do the same by replacing its “America First” trading and political policy with a “Made-in-USA” label, accompanied by thousands of hustling stores and sales agents. A thousand rollouts this year with patents-pending could well force our decision-makers to put attacking China on “pause” and order the Pentagon to cool provocations. China’s rising middle class may be customers if we export these products. After all, a retailers’ consortium producing household goods is where it starts, with other and bigger ticket products to follow this example.


Such a crash project certainly is preferable to a vaporized world.

Barbara G. Ellis, Ph.D., is the principal of a Portland (OR) writing/pr firm. A veteran professional writer and editor (LIFE magazine, Beirut Daily Star, Mideast Magazine), Ellis also has been a journalism professor (Oregon State University/Louisiana’s McNeese State University). A nominee for the Pulitzer Prize in history for the great Civil War run of The Memphis Daily Appeal (The Moving Appeal), today, it’s contributions to progressive websites and political and environmental activism. your social media marketing partner
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