Reuters Insider - Walmart CEO: minimum wage hikes "do not solve the problem"

Second Chance Properties

29/01/2014 21:31

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 Source:             Thomson Reuters                                   
                                                                       
 Description:        Walmart CEO Bill Simon, in remarks to U.S. mayors 
                     in Washington, said the current debate over higher 
                     starting wages is "fine", but said the U.S. can't 
                     "spend our way to prosperity in America."         
 
 
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Transcript (May be auto-generated)

 Thanks so much -- kind introduction. I've been out about a lot lately speaking 
to pretty much anybody who -- about the opportunity that exists in our country 
today about creating opportunities. In America but I've been really excited 
about about this meeting because it's my chance to talk to the -- you can mayors
the problem solvers in our country. The ones who educate our kids and build our 
cities and towns. And this week take care whether they're citizens through a 
very difficult and devastating snowstorm. As -- you're closest to the 
communities you serve. And this is our opportunity to help to help solve some of
those problems we still live in a country that's full of magnificent 
possibilities. 

But we have challenges that we all have to face the challenges that we need to 
me. And I'm quite sure we can all agree that one of those challenges as we've 
heard a lot about today. Is the need for jobs. And I think we're at a pivotal 
moment in our nation's history. Coming out of a great debt it's devastating and 
difficult recession the recovery has been choppy and uneven and and in spurts. 
There's been growth but not nearly enough. Pressure on us -- business of an 
American business there's been pressure. On our customers there's been pressure 
on our economy. 

And we certainly felt that as a country. I mean a great examples in the service 
industry we saw people take an entry level jobs because those were the only jobs
that were available. And here years later many of them still find themselves in 
those jobs wondering what's next. And I think that's why much of the discussion 
today it's been around starting wages are entry level week in raising those 
wages. That's a very fine discussion we should have that discussion in this 
country. But I don't think it captures the whole point nor does it solve the 
whole problem. So yeah I think we would all agree that most people. Veteran 
minimum wage jobs. Took those jobs because they were looking for future they 
don't wanna be in those jobs long term. They wanna see those jobs patently 
somewhere an opportunity for them to grow decree a better life for themselves 
and -- About where you start it's about where and how far you can go. I think 
the last decade -- prove to us that neither. 

Can we cut our way to prosperity nor can we spend our way to prosperity in 
America we have to grow our way to prosperity. If we can do that we'll have a 
better lives for our kids. Folks I think American business needs to lead that 
initiative and lead that growth working -- cities and towns and state and 
federal government. At a Wal-Mart we're taking some action. In investing in our 
communities. And investing in American jobs. Last January exactly a year ago 
today it sounds the audience at The National Retail Federation conference to 
join us in a commitment to that opportunity. Opportunities we use business to 
create our own jobs. Opportunities that we can provide to those in need of jobs.
Including our veterans. An incredible opportunity we have at this time at this 
moment and you talked about it some this morning at breakfast to create 
opportunity. Through the resurgence. Of manufacturing. In the United States. 
Today I could I'd like to update you on our progress talk about next next steps 
and -- how we can all work together. At Wal-Mart as the mayor said we serve a 
140 million customers a week. Your citizens in your towns in your cities. And 
I'm extremely proud of the people who worked for us that do those jobs and these
are good jobs that pay in the top half of our industry. And contrary to popular 
belief that you may have read this recently in the examiner we have Bennett it's
good benefits and the mayor left. We do opera basically as -- -- -- impart on 
people in addition 401K plan and a bonus opportunity. And even discounts on 
merchandise. Maybe more so over the years we as a company have been focused on 
trying to recognize our people and provide them with opportunities that you were
car. And move forward. There's no limit to your to your opportunity. 

75% of our management teams in our stores started his hourly associates. In each
year a 160000. People receive promotions and our company 40% of those people in 
their first year. That's opportunity. Last year -- HDs ways for people to better
manage their careers. And now we're ready to take their career development the 
next step. Were offering more -- more defined pathways for them to success 
expanding educational opportunities. Training and workforce development. We'll 
hear more details in the coming months. 

Second last year we promised to offer a job any honorably discharged veteran and
his or her first twelve months off an active duty. Anyone. We launched that 
program on Memorial Day. And the commitment we anticipated that time would 
result in -- iron about a 100000 veterans over five years. Well I can't tell you
how proud I -- to tell you that in less than a year. We've already hired 30000. 
Veterans. Veterans like -- hope thoughts on served as a combat medic in 
Afghanistan. But you heard about are -- commitment -- -- -- an -- stock. Now 
hardly his dream job. He started in August. But because of his hard work and his
medical training in the military. Within a month he was promoted and became a 
pharmacy technician. And now barely six months it was time whether company he's 
in training to be an assistant manager and songs future's very bright and retail
management and that's opportunity. If you have any veterans in -- cities or 
towns that are looking for work you send them our way we wanna hire them. As a 
fellow veteran I know these men and women have leadership skills. We want to 
march. 

Lastly and I'd like to spend most my time talking about this -- it's a hot topic
is discussed at this morning. It's an opportunity for us an opportunity. To help
create. Jobs. By expanding. American manufacturer. Here's why we're doing this. 
America's been a service economy now for far too long we can't keep this up. We 
need great cities like Pittsburgh making things and grow and we have to make 
things in America it's part of who we are in our DNA. I think we all identify 
with with the things that have been made in our home town. I grew up in the 
Hartford Connecticut area. We probably make Pratt Whitney aircraft engines we 
know that and it's a source of pride for so I guarantee that each and every one 
of you and everybody who lives in your cities and towns. No it's made in those 
towns. If you're from Milwaukee Harley-Davidson. 

Easton Pennsylvania makes cranial. Making things is not only part of who we 
aren't part of who we have to be used to country. And -- I don't think we can 
afford to wait a minute longer. We can't wait. To respond to this challenging 
time can't wait for things to be perfect because the circumstances will never be
perfect but they're improving. Today. Overseas. Middle class is growing its 
driving demand for products that are made in those countries. And that that's 
increasing labor costs abroad making us more competitive. Meanwhile energy costs
in the US are relatively less expensive. And all around the world other other 
parts of the world. Higher transportation costs in general. Are are increasingly
making it necessary and sufficient. To build things closer to the point 
consumption. Agent production for Asian demand American production for American 
demand. And America right now is where the innovations happening. The time is 
right for manufacturing resurgence here in the US. One analyst quoted in the 
Wall Street Journal last month said our favorite emerging market. Is middle 
America. That Wal-Mart we believe that too. Just for the record according to our
suppliers data from our suppliers two thirds of what we buy Wal-Mart US is made 
-- to -- here. Don't let this surprise you hope it doesn't. Remember we run very
large grocery business but we're gonna build on that we're gonna do even more. 
And last year we announced. That we will buy an additional. Fifty billion more 
American products. That's fifty billion more. And American products fifty 
billion more than we do today ten years from now and put that in the context. We
estimate. The -- fifty billion dollar pledge. By the time we get to the ten 
year. Will result in us buying 250. Billion dollars cumulatively. Over that ten 
year period 250. Billion dollars. According to Boston Consulting Group. That 
investment of 250 billion dollars will create. A million jobs. Million jobs when
you take those manufacturing jobs. And then the -- multiplier effect of the 
suppliers and related services around those jobs let me tell you about a person.
Because people matter. 

People are already benefiting from this investment -- as the father of four he 
lives in Burlington, North Carolina. He had a job at a printing facility. Shut 
down. And he and his wife were about to lose their home when an October to get a
job with Kaiser Roth. A company that makes socks and like ware for us. At a 
plant here in the US and in part because of our decision to -- to purchase more 
US made socks -- got got a job. And already his managers are talking to him 
about further opportunity in his words is quote it's so great is that it it 
captures this whole idea. What this job provides for us he says his opportunity 
the chance to grow and that's what's important. Folks are suppliers are engaged 
they really are. 

And those that have taken the risk to expand manufacturing here in the US they 
tell us that there are experiencing a very significant first mover advantage. In
marketeers and in in momentum. It over the past year we've seen it that math 
works it works in very very diverse categories from towels. Two shoes to 
curtains lightbulbs. Televisions and toys. It's happening and it's happening now
right now and this is these are really interesting numbers right now 72% of our 
suppliers of Wal-Mart tell us that they believe. That US manufacturing will be 
cost favorable for them within four years. Within four years 72% of them believe
I'll have a cost advantage here in the US manufactured and out takes several 
years to build a plant. So time from action is today. And at this moment. 

Beckett and in our home offices. And didn't in the conference room all around 
the country we have. Our merchants are in in discussions with -- over forty 
different merchandise categories and departments. Active discussions with 
suppliers about manufacturing products right back here in the US. In an August 
last this past August we saw how excited they were about it we -- the 
manufacturing summit. We had nearly 15100. Manufacturers from all around the 
world attend along with representatives from 34 states. Let me tell you about 
one of the first movers. And I'm really pleased to announce today that -- 
bicycles is bringing production back. Up from overseas to -- South Carolina. And
-- at full capacity in 26 team they'll make half a million bicycles right here 
in America. And there is a first mover advantage both pretend. And for the 
community where they've decided to establish because there already an active 
discussions. With many of their suppliers people who make component parts for 
those bicycles to create a manufacturing. Right there on site. 

So would you move there's a multiplier effect. And -- Arnold handlers and 
passionate about making this work in the economics are different you have to do 
it and to end. Because of bikes are going to be made here in the US is shipping 
costs are less and he can do more. With the assembly on his then vs that the 
store in your homes that you bought it that's clearly good news for us and 
retail. But it's really good news for moms and dads have put those things 
together in the darkened Christmas Eve so everybody who benefit from that but. 
This is what's really amazing and exciting and just think about. Soon your kids 
will be riding a bike it's made in America again. 

That's been passed. We don't have to celebrate the past and manufacturing. And 
wax nostalgic on it we can create the future in the opportunity. Right now. The 
folks it's very important to us that we get this word out because we need 
momentum in manufacturing suppliers. And so we're supporting that initiative 
with a advertising and social media campaign. But I've brought an ad with the 
series if you sneak peek at it it'll it'll start running next month. -- would my
books with. No one time and made things. 

Then -- took pride in the things I made. And my built in word and engines 
cranked. I opened my doors to all but. Together -- Phil Collins and truffles. --
it was mighty but. Then one day gears stop turn it. I'm still here. I believe I 
will rise again. We will build things. Built. This time to get back. What 
America does best. 

Every time I see those ads as we've been working on and it's it's emotional 
because. Everything there were shot and a real factory with real people whose 
lives have been impacted by this resurgence of American manufacturing and tell 
you how proud that makes us. So what's next I think we made some pretty good 
progress in the first year this initiative. But we have to be ready to meet the 
challenges that are on the horizon and there are -- cause substantial 
significant challenges. For example our suppliers tell us that some categories 
such as textiles. Apparel or more difficult to bring back. To the US for a lot 
of reasons and we need to mitigation and that space. Also they tell us that 
there are crucial components that just dark meat in the US anymore and we have 
to solve that problem as well. Finally very high end their lists that they need 
assistance from you. The system to navigating local infrastructures. Deciding 
where to site understanding what the possibilities in the resource -- -- And so 
we're taking steps to help solve those challenges. Today. We're announcing the 
creation of a ten million dollar fund to support American manufacturing. 
Renewal. Now this fund will provide grants to innovators in the manufacturing 
sector over the next five years. We've we wanna grow manufacturing and help 
rebuild America's middle class. We -- the brightest minds. In New York 
universities. In dark ink tanks. In your cities and towns tackling this issue. 
They come up with solutions to these problems and help move this -- Wal-Mart in 
the Wal-Mart foundation will fund the program and working collaboration with the
US conference of mayors that identified a war. Leaders in manufacturing. 
Innovation. This program seeks to create new processes ideas in jobs that 
support America's growing manufacturing footprint. Those are great words to say 
it. Let's work together to create this opportunity. Program launched in March 
and it really looked forward to working with you on this. Also I'd like to 
invite you all to the second US manufacturing summit held this August in Denver 
Colorado. In your cities and towns you may have some lurching businesses but 
there may also be factories. That are operating at full capacity. Needs some 
help. But our summit one of the things that will seek to do is connect. 
Manufacturers are suppliers. Who are indeed of those component parts that I 
talked about with factories in your cities or towns that they had excess 
capacity. Please help us identify them and bring them to Denver and will help 
connect them with the opportunity to produce more. Together we have the 
opportunity to -- purpose or help add production to some of these factories. 
It's a help us rebuild that American supply chain that we desperately need to 
support. This manufacturing initiative together we can get this -- I know we can
do you have any questions about it all you give us a call. Will be happy to 
engage with you. I've been working a lot with a lot of leaders all cross country
on this initiative. And I have to tell you the most successful of the ones that 
are personally involved and who believe. That this is an impaired. But I'm 
pretty interest is I was thinking about it that. The most successful governors 
about and I've been able to work with. Former -- and that's why I've been so 
excited to be here -- the US conference. To get things done. If you try to bring
these businesses you're cities and towns there's a couple of questions that you 
need to ask yourself and be prepared to answer. First can you provide the 
workforce training apprenticeships the educational opportunities. To build that 
the talent and the work. The -- employees at these new factories will need. 
Second what's the business climate in your city. But with the tax policies. And 
is your local team established. And aggressively working with these 
manufacturers. It's turned into a bit of competition Apatow you. But just think 
the rewards are absolutely incredible. If you bring -- accurate in your city 
your town. It'll be there for generations potentially. Generations and that's a 
long long term win the ability to build a legacy for your community. Thomas 
Edison famously said. That opportunity looks a lot like hard work will it 
feature doesn't centuries. This won't be easy it's gonna take all of us working 
together industry. Government at every level with a level of trust but I think 
we're gonna need to build upon. But we do this though we will remember this is 
the time that we came together. To help our country. I believe nothing less than
our futures state. It's not a Republican or Democrat issue this is not even a 
Wal-Mart issued this is an American issue. It's one that we need to tackle and 
we need to move now. Let's bring jobs back. Let's bring the opportunity that. 
Let's bring the pride that. -- look forward to working with the all on this 
thank you very much