In 2001, Home Depot accounted for almost one out five tools sold by Black & Decker. Today, according to the Home Channel News, the Towson, Maryland based tool-maker is reeling from income losses that are partially caused by its “partner” the Home Depot. In the face of shrinking sales, Black & Decker is shutting down its American and British power tool production facilities, and relocating them to cheaper labor markets in Mexico, China and the Czech Republic. At least three plants will close in the U.S., and 500 jobs will be lost. Home Depot’s DNA is all over this deal. The home improvement chain also competes with B&D, making its own “private label” tools in foreign countries. Home Depot uses its cheaper, foreign tools to price out the U.S. firms like Black & Decker. This puts pressure on B&D to lower its prices to Home Depot by making cheaper tools, and one of the major “cost centers” is labor. So American workers lose their paycheck because of Home Depot’s “merchandising strategy”. The other big box home improvement chains do the same thing: substitute foreign for domestic products. Lowe’s has an import program they call “Lowe’s Global Sourcing”. The company still only imports 10% of its items, says the Home Channel News, but imports are rising rapidly, just as American manufacturing jobs decline. For companies like Black & Decker to remain “competitive”, they have to kill off their American plants, and source tools from Third World Countries.What does the American economy get? We exchange manufacturing jobs at high wages, for retail sales clerk jobs at substantially lower wages. Higher wage workers have more discretionery income to put into the economy, so we lose that economic stimulus. More and more we become an economy built on “trading down” to prevailing wage and part-time retail jobs. This is why Wal-Mart, for example, is the largest private employer in America, as the middle class races to the bottom. Big box home improvement centers are not just decking tool-makers like B&D, they are drilling a big hole in the center of our manufacturing base. But ultimately, we are the real culprit. When we buy a tool made by Ryobi at Home Depot, we contribute to the decline of our domestic economy. And now, if you think you’ve bought an American-made Black & Decker tool, you’ll have to Czech it out more carefully.
: Home Depot likes to say “Good Things Happen when Home Depot Comes to Town.” Just ask the laid-off workers who used to make Black & Decker tools. For more stories about the displacement of American manufacturing, search this database by “foreign” or “import”. See also the story about Fruit of the Loom.