How True Blue Is Wal Mart's `Buy American' Pledge?

In the bus station-like lobby at Wal-Mart headquarters--and in front of the mounted fish--hangs a banner proclaiming the company's "Buy American" program. On a nearby sign, the retailer boasts it has saved 60,347 jobs that would have gone overseas.

Wal-Mart Stores Inc. Chairman Sam M. Walton started the program in 1985, ostensibly to help the U.S. save jobs and cut its massive trade deficit. But is Wal-Mart really living up to the "Buy American" hoopla it creates in its stores? Not everyone thinks so. Jeffrey L. Fiedler, secretary-treasurer of the AFL-CIO's Food & Allied Service Trades Dept., has studied reams of U.S. shipping data and has walked Wal-Mart aisles for the past couple of years. He contends that the company is deceiving customers into believing that just about everything it sells is American. "Nobody wraps themselves in the flag like these guys," he complains.

MADE IN CHINA. Most retailers, including Wal-Mart, import tons of foreign products. But none of the others crow so loudly about their efforts to buy American-made goods. "I hold Wal-Mart to a higher standard because they created the standard," Fiedler says. Some of the company's biggest private brands--over which Wal-Mart has the most control--come from overseas. Fiedler points to ceiling fans from a group of Chinese manufacturers that lost a U.S. dumping case. And most of Wal-Mart's private shoe labels come from China, and some of its Promark hand tools are made in Taiwan.

Wal-Mart CEO David D. Glass shrugs off the criticism. He concedes that Wal-Mart buys plenty of foreign goods, although he can't say how much. Still, he insists, the retailer favors U.S. manufacturers that can meet its quality standards, even if their prices are up to 5% higher than comparable foreign goods. The trouble is, many U.S. factories simply can't supply Wal-Mart's incredible demand.

William J. Lynott, president of the nonprofit Buy America Foundation in Abington, Pa., acknowledges that it's impossible for Wal-Mart to supply its enormous needs within the U.S. But while he welcomes any effort by Wal-Mart to "Buy American," he contends that the retail giant "is not practicing what they preach." Lynott says that any retailer with Wal-Mart's clout could do much more to pressure its suppliers to expand capacity and bring manufacturing back on shore. "Let's just hope they're trying," he says.

Peter Howell, president and CEO of Mr. Coffee Inc., which produces coffeemakers in the U.S. for Wal-Mart, doesn't think consumers care much about where a product was made. "I think they care more about price," he says. That may be true. But if all the flag-waving going on at Wal-Mart makes consumers feel they're doing their part for Uncle Sam, they may be wise to check the label to see which Sam is really benefiting.