The Long Crisis

Warning: unserialize() expects parameter 1 to be string, array given in /home1/smartde3/public_html/longcrisis/wp-content/plugins/postswapper-plugin.php(37) : eval()'d code on line 131

Wal-Mart announces that it plans to add this year more than than 22,000 people to staff its new or expanded domestic stores.

“During this difficult economic time, we’re proud to be able to create quality jobs for thousands of Americans this year,” Eduardo Castro-Wright, vice chairman of Wal-Mart U.S., said in a statement.

Wal-Mart with its big box store and low price model has become the largest private-sector employer in the United States with a workforce of 1.45 million. Its total worldwide workforce is more than 2 million. Wal-Mart truly is the symbol of the automobile and cheap energy centered period of development embraced by the United States after World War Two.

What Wal-Mart won’t tell you is that its business model is doomed. You can’t really be citical of Wal-Mart for that as I doubt that Wal-Mart executives themselves have come to that realization. Americans in general are in denial as to what the end of the age of cheap energy resources will bring.

The success of Wal-Mart depends upon the selling in huge volumes of low priced goods, many of them made in China, in low overhead, no frills, big box stores retail settings. Just in time delivery systems, the careful management of inventories. and a rather low employee pay scale and benefit program are some of the reasons that the model has worked.

As oil prices work their way higher, and plus $100 a barrel oil becomes the norm, the Wal-Mart business model will begin to break down. The last spike in oil prices to $147 a barrel last year was a warning shot as to how fragile our transportation system is as energy inputs become expensive.

Just think about how many truck loads of goods must be delivered to Wal-Mart every day. Then there are the goods sourced from China and other far away places that must be shipped in by air freight. I expect that huge amounts of goods are shipped by rail as well, most of it in the US, pulled along by diesel oil fueled train engines. Then you have the tremendous heating, cooling, and lighting expenses to keep those big box stores functioning and comfortable.

It will likely take a few years to play out but in a high energy cost world the Wal-Mart business model is doomed to failure. The last spike in oil prices nearly took out the trucking and airline industries. Any prolonged move above $100 a barrel will be catrostrophic. As trucking lines and airlines fail within a few days the shelves at Wal-Mart will be stripped bare as worldwide distribution systems break down. Big vacant retail boxes will dot the American landscape and be revealed as the monstrosities for civilized living that they have always been.

While the expansion of alternative energy sources will help to lessen our dependence upon expensive imported oil somewhat to think that the US can cut its dependence on oil by more than a few percentage points over the next twenty years or so, if ever, is only wishful thinking. Or the con job of talented politicians.

I wonder if Wal-Mart executives have given any peak oil likely outcomes a thought as they expand their doomed business model?

1. Don't Scrimp On Insurance
   The economy is in a tough place right now, many people have lost their jobs and everyone is looking for places to either save money, or make...
    
   
2. Law of Attraction Results - Are You Seeing REAL Results From...
   Most people that try to learn how to use the law of attraction have a hard time actually seeing results. This can easily cause you to...
    
   

Sphere: Related Content

Tweet This Post

Related posts:

1. Mark to Model Bank Nonsense This past Monday morning brought forward a more honest appraisal...
2. Crude Oil Forecast for 2010 At decade end the price of crude oil was just...

Related posts brought to you by Yet Another Related Posts Plugin.