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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWho's really to blame for outsourcing American jobs and who suffers from it?
This little video, now about 9 years old, explains it.
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Who's really to blame for outsourcing American jobs and who suffers from it? (Original Post)
louis c
May 2016
OP
Jesus Malverde
(10,274 posts)1. That was very good...nt
DamnYankeeInHouston
(1,365 posts)2. Jib Jab is always beautifully done. Thanks.
Urchin
(248 posts)3. Here's the Long Version
In more detail:
rainy
(6,091 posts)4. Walmart was telling product makers what they were willing to pay and
if the maker could not sell at the amount then Walmart refused to buy from them. Thus the huge scramble for the cheapest labor.
JHB
(37,158 posts)7. Not as much with the labor, but example: Vlasic Pickles
One of Vlasic's products was a gallon jar of pickles, mainly for high-volume users: restaurants, delis, etc. Walmart liked it (for families, it would be a textbook "buy in bulk" item), it tested well, and they went national with it at a price so low Vlasic and Walmart were each only making about a penny a jar. All gravy for Walmart, a lot more lumpy for Vlasic...
For Vlasic, the gallon jar of pickles became what might be called a devastating success. "Quickly, it started cannibalizing our non-Wal-Mart business," says Young. "We saw consumers who used to buy the spears and the chips in supermarkets buying the Wal-Mart gallons. They'd eat a quarter of a jar and throw the thing away when they got moldy. A family can't eat them fast enough."
The gallon jar reshaped Vlasic's pickle business: It chewed up the profit margin of the business with Wal-Mart, and of pickles generally. Procurement had to scramble to find enough pickles to fill the gallons, but the volume gave Vlasic strong sales numbers, strong growth numbers, and a powerful place in the world of pickles at Wal-Mart. Which accounted for 30% of Vlasic's business. But the company's profits from pickles had shriveled 25% or more, Young says--millions of dollars. The gallon was hoisting Vlasic and hurting it at the same time.
Young remembers begging Wal-Mart for relief. "They said, 'No way,' " says Young. "We said we'll increase the price"--even $3.49 would have helped tremendously--"and they said, 'If you do that, all the other products of yours we buy, we'll stop buying.' It was a clear threat." Hunn recalls things a little differently, if just as ominously: "They said, 'We want the $2.97 gallon of pickles. If you don't do it, we'll see if someone else might.' I knew our competitors were saying to Wal-Mart, 'We'll do the $2.97 gallons if you give us your other business.' " Wal-Mart's business was so indispensable to Vlasic, and the gallon so central to the Wal-Mart relationship, that decisions about the future of the gallon were made at the CEO level.
Finally, Wal-Mart let Vlasic up for air. "The Wal-Mart guy's response was classic," Young recalls. "He said, 'Well, we've done to pickles what we did to orange juice. We've killed it. We can back off.' " Vlasic got to take it down to just over half a gallon of pickles, for $2.79. Not long after that, in January 2001, Vlasic filed for bankruptcy.
The gallon jar reshaped Vlasic's pickle business: It chewed up the profit margin of the business with Wal-Mart, and of pickles generally. Procurement had to scramble to find enough pickles to fill the gallons, but the volume gave Vlasic strong sales numbers, strong growth numbers, and a powerful place in the world of pickles at Wal-Mart. Which accounted for 30% of Vlasic's business. But the company's profits from pickles had shriveled 25% or more, Young says--millions of dollars. The gallon was hoisting Vlasic and hurting it at the same time.
Young remembers begging Wal-Mart for relief. "They said, 'No way,' " says Young. "We said we'll increase the price"--even $3.49 would have helped tremendously--"and they said, 'If you do that, all the other products of yours we buy, we'll stop buying.' It was a clear threat." Hunn recalls things a little differently, if just as ominously: "They said, 'We want the $2.97 gallon of pickles. If you don't do it, we'll see if someone else might.' I knew our competitors were saying to Wal-Mart, 'We'll do the $2.97 gallons if you give us your other business.' " Wal-Mart's business was so indispensable to Vlasic, and the gallon so central to the Wal-Mart relationship, that decisions about the future of the gallon were made at the CEO level.
Finally, Wal-Mart let Vlasic up for air. "The Wal-Mart guy's response was classic," Young recalls. "He said, 'Well, we've done to pickles what we did to orange juice. We've killed it. We can back off.' " Vlasic got to take it down to just over half a gallon of pickles, for $2.79. Not long after that, in January 2001, Vlasic filed for bankruptcy.
Read more at http://www.liveleak.com/view?i=bac_1342681195#RCqsP7WD8YMEi8FC.99
CrispyQ
(36,457 posts)8. Kick for Vlasic story.
'Well, we've done to pickles what we did to orange juice. We've killed it. We can back off.' "
Jeffersons Ghost
(15,235 posts)5. K&R a very good, brief movie
HughBeaumont
(24,461 posts)6. The "star" of the video is a Republican URL.
Fitting, no?