Still, he has had trouble turning a profit. He laid off 500 employees two years ago. Even here, it's hard to meet Wal-Mart's prices. Wilburn expects that Oxford will close his factory in the next few years and move on to another country where basic cotton clothes, such as Wal-Mart's Old Glory khaki pants, can be produced for less.
"Our business is a lot of twill stuff," he said. "That will be gone."
*
Waving the Flag
It wasn't long ago that Wal-Mart was fighting to keep manufacturing jobs on U.S. soil.
In 1985, founder Sam Walton launched his "Bring It Home to the USA" program. "Wal-Mart believes American workers can make a difference," he told his suppliers, offering to pay as much as 5% more for U.S.-made products.
In his 1992 memoir, "Made in America," Walton claimed that the program had saved or created nearly 100,000 jobs by using "the power of this enormous enterprise as a force for change."
But the late Walton's much-trumpeted effort soon was overtaken by the rise of the global economy. The spread of the Internet and other technology, along with U.S.-led efforts to tear down trade barriers, made it easier to move goods and capital across borders.
To maintain its edge on pricing, Wal-Mart quietly joined other retailers in a worldwide search for the cheapest sources of production.
In apparel, the process begins with Celia Clancy. From a renovated warehouse near the company's headquarters, the Wal-Mart executive vice president oversees the world's largest clothing budget, estimated at $35 billion in 2000.
Clancy gives her buyers a "Plus One" mandate every year: For each item they handle, they must either lower the cost or raise the quality.
To demonstrate, she pulled a pair of girls' shorts off the wall of her cramped office and gave them a tug.
"This was a dumb little knit pull-on short," Clancy said. "We improved the fabric, put some more fashion in it and are selling it for the same price as last year -- $5.19."
Keeping prices low like this means squeezing costs at every step. Clancy and her buyers have trimmed back the number of brands, styles and color schemes. That allows Wal-Mart to consolidate its purchases of fabric, accessories and thread and to wrangle steep discounts from suppliers.
Clancy's buyers used to rely on a Hong Kong company and other intermediaries to find bargains overseas. This year, Wal-Mart established its own global procurement division to hunt for the cheapest raw materials, manufacturers and shipping routes. Last year, for instance, the company rerouted cargo from a port in Hong Kong to the southern Chinese province of Guangdong, where shipping rates were lower. The savings: $650,000.
In purchasing fabrics such as denim and khaki, Wal-Mart plans to approach three to five mills around the world and pit them against each other. "We'll be putting our global muscle on them," said Ken Eaton, head of the global procurement division, which has 21 offices in 18 countries.
Eaton believes he can reduce costs at least 20% by cutting out the middleman and buying directly from foreign factories. He feels a sense of urgency about his mission, in part because he believes the company's "Buy American" focus left it playing catch up.
"Honestly, we're kind of late to the party," he said. "There are a lot of companies out there that have been direct-importing and understanding the global aspect of sourcing for a long, long time."
As late as 1995, Wal-Mart said imports accounted for no more than 6% of its products. Today, consulting firm Retail Forward estimates that 50% to 60% of the merchandise in the company's U.S. stores is imported.
Wal-Mart Chief Executive H. Lee Scott Jr. said in an interview that the trend reflected an inescapable reality: U.S. consumers aren't willing to pay even a little extra for a "Made in America" label.
"The customer ultimately drives that," he said.
*
Big in Bangladesh
Wal-Mart is the most powerful corporate citizen in Bangladesh, even though it doesn't operate a single store in the country.
When the company complained to Bangladesh's Export Promotion Bureau this spring about delays in moving cargo, the response was swift.
Officials in the southern port of Chittagong are speeding up efforts to reduce paperwork and modernize facilities. Over the objections of labor leaders, port officials also are building a five-berth container terminal that will be privately managed. Already, giant cranes have helped shorten a ship's turnaround time from six days to fewer than four.
It's no wonder Wal-Mart wields such clout in this country, where nearly half the population lives in poverty. The company bought 14% of the $1.9 billion in apparel that Bangladesh shipped to the U.S. last year.
"Wal-Mart is our biggest customer and it's important to me," said Commerce Minister Amir Khasru Mahmud Chowdhury. But, he added, Wal-Mart's prices "are coming down all the time -- that's the biggest threat to us."
