Big retailers are increasingly coming under fire from small and mid-sized manufacturers. Last month, more than 1,000 employees and owners of small manufacturing firms attended a rally in Connecticut to denounce Wal-Mart, Home Depot, Target, and other chains for forcing large manufacturers to move their factories to China.
As large manufacturers abandon their domestic operations, the small firms that once supplied them with parts are forced to downsize or close. “The major retailers and big manufacturers are doing us in,” explained rally-organizer Fred Tedesco, owner of Pa-Ted Spring Co. in Bristol. “They’re destroying small- and medium-sized businesses. They’re destroying jobs. They’re destroying the middle class.”
The rally was organized by a new coalition of small manufacturers called Mad in the USA. The group’s goals include reforming U.S. trade policy, educating the public about the practices of major retailers, and encouraging people to buy locally produced goods. Several unions have expressed interest in partnering with the coalition.
Wal-Mart now does so much business in China that it ranks as the country’s 8th largest trading partner, ahead of Britain and Russia. About 10 percent of the U.S. trade deficit with China can be attributed to Wal-Mart’s imports.
Small manufacturers complain that big retailers are not only shifting production overseas, but routinely mistreat U.S. producers. Tedesco contends the chains often order large quantities of a product at a steep volume discount and then cancel the remainder of the order after the first shipment, keeping the volume discount and leaving the producer with the excess inventory. The manufacturers rarely complain publicly, Tedesco said, because they fear reprisals.
Coalitions similar to Mad in the USA are beginning to form elsewhere. Manufacturers for Fair Trade, a new alliance of small firms in Pennsylvania, hopes to influence trade policy and the 2004 presidential race. “Large corporations have the money to be at [President] Bush’s table,” said Dan Jepson, owner of Jepson Precision Tool and one of the founders of the alliance. “We don’t have the money, but by God we’ve got the votes.”