Otter wants to attract Wal-Mart suppliers to Idaho

The jobs could pay twice minimum wage, the governor says.

adutton@idahostatesman.comAugust 27, 2013 

Gov. Butch Otter learned something last week that he says “defies economic gravity” and may bring more jobs to Idaho.

Otter was one of eight governors who met with Wal-Mart executives and hundreds of their suppliers in Orlando after the retail giant announced a push to buy $50 billion more U.S.-made items over the next decade.

When it came time to “give a pitch of why those 700 companies ... should look to Idaho” as a new home for their overseas plants, the chairman of Chobani raved about how eagerly Twin Falls and Idaho had welcomed Chobani’s new Greek yogurt plant, Otter told a Boise Metro Chamber of Commerce audience Tuesday.

But what shocked Otter, he said, was learning that Wal-Mart suppliers could save money if their products are made in places like Idaho instead of Bangladesh, India or China.

“A lot of those [overseas] plants were built 15, 20 years ago ... when their energy rates were really low, and so were the wage rates,” Otter said. Now the plants are outdated, labor is pricier and fuel alone has raised the cost of hauling goods across the ocean, he said.

Idaho has the second-cheapest energy in the country, Otter later told the Idaho Statesman. Idaho also has among the lowest wages in the country, though Otter told the Statesman the wages the Wal-Mart suppliers are paying in China — $4 an hour — are equivalent to about $18 here.

“I don’t know what the wage is going to be,” Otter said. But “if there is a vocational skill involved,” he expects hourly wages could be $18 or higher.

He imagines dishcloths being colored with Idaho dyes or Idaho carpentry workers using their skills to make Wal-Mart furniture.

Otter was so excited about pitching Idaho to suppliers that, during the luncheon, he asked Boise State University President Bob Kustra to enlist his business and marketing department’s help, scouting local Wal-Mart shelves for products that could be made in Idaho.

Though the idea was nascent as of Tuesday evening, Boise State spokesman Greg Hahn said, “It’s exactly the kind of thing we want to be involved in.”

Otter said the next step is to “build a profile” of Idaho as a choice destination for companies that supply the largest retailer in the U.S.

“We’re going to end up with a lot of interest and hopefully a lot of those companies,” he said.

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Audrey Dutton: 377-6448, Twitter: @IDS_Audrey

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