Wal-Mart and the CFL

By Deane Barker on August 30, 2006

How Many Lightbulbs Does it Take to Change the World? One. And You’re Looking At It.: We tend to slam Wal-Mart when we think they’re evil, so we should probably pat them on the back when they do something good. And this is very good, because incandescent bulbs are evil, remember.

In the next 12 months, starting with a major push this month, Wal-Mart wants to sell every one of its regular customers—100 million in all—one swirl bulb. In the process, Wal-Mart wants to change energy consumption in the United States, and energy consciousness, too. It also aims to change its own reputation, to use swirls to make clear how seriously Wal-Mart takes its new positioning as an environmental activist.

This comes on the heels of Wal-Mart talking about selling E85 at all its stores.

Wal-Mart is exploring the viability of selling E85, a blend of 85 percent ethanol and 15 percent unleaded gasoline, but it costs about $100,000 to install each E85 pump. Those costs are only partially offset by tax credits—up to $30,000 for each filling station.

That would be cool because we have a little extra corn around these parts,

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  1. Though long, that article was pretty damn interesting all the way through. Very informative and different insight into the world of mass purchasing and retailing.

    This little segment, however, was buried near the end of the article, and probably concerns me the most out of everything:

    “This is at least as big a deal for GE. Between 2004 and 2005, it tripled its manufacturing capacity for compact fluorescents. By the end of 2006, GE will have tripled capacity again. Anticipating the shift to swirls, it plans to close an incandescent bulb factory in St. Louis.

    Making compact fluorescents is expensive and complicated, compared with incandescents, in part because of the electronic controls each bulb contains, and in part because swirls remain partly handcrafted. To make each spiral, a Chinese worker wearing gloves takes a tube of glass, holds it over an open flame, then wraps the heat-softened tube around a metal form. The job requires a deft touch so the tube doesn’t become flattened while getting its spiral shape. “

    Sooo…closing a plant in St. Louis, and increasing CFL production by 3 times. Then – for some reason – they make special note that a ‘Chinese’ worker will be handcrafting the bulbs.

    Which tells me, that in order to meet demand and pricing levels, they’ve gone ahead and outsourced their lightbulb production. This is not uncommon in today’s industry, but I find it a little bit disappointing all the same. Rather than retrofit existing factories (the St. Louis plant is pretty much where the incandescent bulb was first produced, so this is really a fitting requiem for it) and train American workers, they’re closing plants and paying Chinese workers slave wages to bend millions of glass tubes.

    Of course, there’s more to the story: as mentioned in the article, the market for CFLs is self-suffocating. Once everyone buys them, they won’t buy them again for another 10 years. There will be an initial push and great demand that’ll quickly fall right off a cliff. With a product like that, I guess it sort of makes sense to outsource it, because it’s a lot easier to deal with demand changes when it’s not unionized shops doing the work.

    So I understand where they’re coming from, but I just thought it was a rather interesting point to include in the article. I’m surprised he didn’t elaborate on that more after taking the time to mention it.

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