One of Walmart’s suppliers, Redman & Associates LLC, has attempted to reshore its manufacturing, bringing it back from China to Arkansas. Redman & Associates manufactures toys for Walmart, including battery-operated ride-on cars for children. Previously, it had contracted the bulk of its manufacturing to Sales Chief Enterprise Co. Ltd., a Chinese company. Once Redman & Associates attempted to reshore its manufacturing efforts, Sales Chief revoked Redman & Associates’ credit terms and demanded immediate payment, which has disrupted Redman & Associates’ supply chain and its ability to fill orders.
As a result of Sales Chief’s actions, Redman & Associates sued the company for $20 million, alleging breach of contract, tortious interference with a business relationship and misuse of trade secrets.
With the growth of American manufacturing, it is not unexpected that such differences would arise. Any U.S. manufacturer who is thinking about bringing its work back to this country should look long and hard at this example.