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Joining the PAC: Wal-Mart Opens for Business In a Tough
Market:
Washington --- Famously Apolitical Retailer Plunges Into Lobbying
And Becomes Top Donor --- A Big Defeat On Banking
By Jeanne Cummings - The Wall Street Journal
[back to top]
March 24, 2004
WASHINGTON -- China's entry into the World Trade Organization was
essentially a done deal in the late 1990s when Wal-Mart Stores Inc.
executives discovered a problem: U.S. negotiators had agreed to a
30-store limit on foreign retailers operating in China, an
insufficient figure for the ambitious Arkansas retailer.
Worse, executives at Wal-Mart headquarters in Bentonville, Ark.,
realized they couldn't do anything about it because they didn't know
the right people in Washington. The company spent literally nothing
on lobbying. "We weren't there," says Wal-Mart Senior Vice President
Jay Allen, throwing up his hands.
The incident brought home a lesson that had been nagging at
Wal-Mart for years. After decades of explosive growth, the retailer
couldn't continue to expand its empire without abandoning founder
Sam Walton's policy of shunning politics. So, in 1998, the retailer
hired its first lobbyist -- a retired Air Force lieutenant general
-- and set out to transform itself from a company without a
Washington presence to one that could bend public policy to suit its
business needs.
As it tried to flex its political muscles, Wal-Mart got a painful
education in the ways of Washington. It has endured setbacks, most
recently at the hands of community bankers who dashed Wal-Mart's
plans to expand into lending. Still, the retailer is beginning to
notch significant wins on global-trade issues and shows signs it may
emerge as a political powerhouse. Since the WTO deal was struck,
Wal-Mart has negotiated with Chinese government officials to
increase its store count there to 35, with plans for more. It is
also building up a state and local government lobbying shop in the
U.S. assigned to clear any roadblocks to new domestic store
openings.
In Washington, Wal-Mart has five lobbyists on its payroll, and a
bench of hired guns led by Thomas Hale Boggs Jr., one of Capitol
Hill's best-known lawyer-lobbyists. The company's political action
committee was the biggest corporate donor to federal parties and
candidates in 2003, with more than $1 million in contributions -- up
from $182,000 during the 1997-98 election cycle, according to
Federal Election Commission disclosure reports. Wal-Mart's PAC ranks
as the second-largest in Washington, according to the Center for
Responsive Politics, a nonpartisan organization that tracks
political giving.
"It's hard to go to a fund-raiser in Washington for a member of
the [House] Financial Services Committee without running into one or
two or three Wal-Mart lobbyists," says Ron Ence, a lobbyist for
community bankers.
Unlike most corporations, which contribute to both parties in
rough proportion to Congress's partisan split, about 85% of
Wal-Mart's checks go to Republicans. And recently Mr. Allen was
named a "Pioneer" by the Bush campaign, meaning he has raised at
least $100,000 by getting friends and colleagues to make
contributions of up to $2,000 each.
The partisan giving is a nod to Wal-Mart's hostile relationship
with organized labor and its dependence on free-trade agreements.
Wal-Mart defends its lopsided support, saying it's supporting
pro-business candidates. But sometimes it can get personal. Several
Democratic presidential candidates -- including presumed nominee
Sen. John Kerry -- have criticized Wal-Mart's labor practices. At
the company's managers meeting in Kansas City in January, Wal-Mart
executives showed footage of former Democratic presidential
candidates Howard Dean and Richard Gephardt criticizing the
company's health benefits. Managers booed and hissed.
The footage, says Mr. Allen, shows that Wal-Mart "had become an
issue in the presidential campaign, and we needed to engage at this
level" by donating to candidates who share the company's priorities.
Wal-Mart's pivot toward politics coincided with its rise to
become the nation's largest retailer, one with enough market clout
to drive down consumer prices, bust through trade barriers and force
competitors to demand cost-saving concessions from labor unions.
But its growth introduced challenges that couldn't be solved
without government help. The company, once celebrated as an
entrepreneurial success story, typified by the late Mr. Walton's
down-home style, found itself fighting off legal challenges from
unions, workers' lawyers and federal investigators.
Throughout the same period, friendly lawmakers warned Wal-Mart
executives to guard against the fate that had befallen Microsoft
Corp. The technology giant's courtship of Washington didn't start
until the Justice Department had filed an antitrust lawsuit --
leading to years of costly litigation and damage control. So
Wal-Mart executives directed Mr. Allen to hire the company's first
full-time lobbyist. The trick: finding someone who would remain true
to Wal-Mart's practical, no-frills culture, says Mr. Allen.
Norm Lezy was an Air Force lieutenant general with Pentagon
lobbying experience when he got a call from Wal-Mart. An old Air
Force buddy working for the retailer recommended him. Headed for
retirement, Mr. Lezy says he wasn't interested but agreed to be
interviewed to spare his friend embarrassment.
"What's the first thing you'd do if you got the job?" Mr. Allen
asked him. Mr. Lezy replied: "I'd like to drive around with a
Wal-Mart truck driver." Bentonville executives were sold. They put
on a hard press, and Mr. Lezy was won over.
Not long after, a man with silvery, shoulder-length hair and a
striking resemblance to Buffalo Bill showed up at Mr. Lezy's cubicle
in Bentonville. "I wanted you to see me before you got into my rig,"
said Carl Mayes, then a 17-year Wal-Mart truck driver, according to
Mr. Lezy.
The next morning, the two climbed into Mr. Mayes's rig to deliver
80,000 pounds of Wal Mart's Ol' Roy Dog Food to six stores in four
states. Over the miles, Mr. Lezy learned about the company's rise,
old timers' reverence for Mr. Walton -- known as "Mr. Sam" -- and
how drivers serve as executives' eyes and ears by talking to
customers.
Mr. Lezy headed to Washington in March 1999, and set up shop in a
small borrowed office at the Retail Industry Leaders Association. At
the time, lawmakers were hammering out a complex bill on banking, a
business Wal-Mart was keen to explore. Customers wanted the
convenience of in-store banks, and company officials figured
Wal-Mart could save millions of dollars in credit-card transaction
fees alone. Three months after Mr. Lezy arrived, Bentonville
executives asked federal regulators for permission to buy a small
thrift in Broken Arrow, Okla. They saw it as the first step in
creating a national banking chain in their stores.
Small bankers pleaded with Congress to spare them the fate of
mom-and-pop hardware and variety stores, which, they said, were
strangled by Wal-Mart. "It totally moved the ball into our court,"
recalls Bill McQuillan, president and chief executive of City
National Bank of Greeley, Neb., who testified on behalf of the
community bankers.
Lawmakers inserted a clause in the banking bill barring retailers
from buying thrifts. It was retroactive to May 4, 1999, and killed
Wal-Mart's thrift application. (Another blow came this month, when
the House passed a bill that would make it hard for a retailer to
expand into banking through the purchase of an industrial-loan
company.)
Mr. Lezy figured he was about to be fired when he got a call from
David Glass, then Wal-Mart's chief executive. But Mr. Glass gave Mr.
Lezy a pep talk and said he was committed to Wal-Mart's Washington
experiment.
Congressional allies rushed to offer advice, including Trent
Lott, then Senate majority leader. Mr. Lott arrived in Bentonville
in late 1999 with a simple message, according to a congressman who
attended the meeting: Increase your profile and open your wallet.
So Wal-Mart executives set out to beef up their political action
committee -- an account made up of voluntary employee contributions
that executives use to make political donations. (Federal law
prohibits direct corporate contributions to party committees and
candidates.) At an August 2000 meeting attended by thousands of
Wal-Mart managers, buckets were passed around for donations, as well
as forms authorizing automatic paycheck deductions for the PAC.
For some employees, the pressure to contribute became a point of
contention. "With my district manager sitting 3 inches over my
shoulder, you think I didn't sign up?" recalls Jon Lehman, a
Wal-Mart manager who quit in November 2001 and is now working with
union organizers to enlist Wal-Mart workers. Current Wal-Mart
employees, who asked not to be named, also report feeling pressured
to give to the PAC.
Mr. Allen says Wal-Mart doesn't force workers to give to a PAC;
such an action would be illegal. "I regret" that employees felt
pressured, says Mr. Allen. "That is not the intent at all."
Wal-Mart managers boosted PAC contributions to $703,500 in the
1999-2000 election cycle from $230,800 in 1997-98. When Sen. Lott
issued a call for help for Republican candidates in the late summer
of 2002, Wal-Mart's PAC donated $50,000 in September and $101,000 a
month later -- mostly to Republicans. "They came through, and people
knew it," recalls a former Republican senatorial aide.
The support brought its own rewards -- including free publicity.
In November 2002 the Bush administration proposed the removal of all
tariffs on manufactured goods imported to the U.S. by 2015. U.S.
Trade Representative Robert Zoellick stood on a stage before the
news media with two identical baskets of baby goods, prominently
marked as having come from Wal-Mart. The one without tariffs was $32
cheaper.
Wal-Mart's PAC today has swelled to nearly $1.5 million,
according to its March 2004 report. Nearly 19% of the company's more
than 60,000 domestic managers contribute, most through payroll
deductions that average $8.60 a month, says Mr. Allen.
Labor problems have deepened Wal-Mart's involvement in politics.
In the late 1990s, the United Food and Commercial Workers
International Union stepped up efforts to organize Wal-Mart workers.
It helped employees file a series of complaints about the company's
overtime, health-care and other policies with the National Labor
Relations Board. Dozens of class-action lawsuits were filed on
behalf of workers.
Wal-Mart responded by pouring millions of dollars into the U.S.
Chamber of Commerce's Institute for Legal Reform, which presses for
limits on awards in class-action suits. It also backed then-Sen. Tim
Hutchinson, an Arkansas Republican, when he introduced legislation
to bar unions from soliciting outside retail stores. Wal-Mart says
the legislation was intended to clear room for charitable groups
making solicitations, not to restrict labor activity. But labor's
congressional allies decried the "Wal-Mart" bill, which was soundly
defeated. In the fall of 2002, labor-backed Democrat Mark L. Pryor
defeated Mr. Hutchinson.
The company's labor problems reached a peak late last year, when
Immigration and Customs Enforcement agents raided several stores,
rounding up more than 200 undocumented workers hired by Wal-Mart
subcontractors to clean the stores. Wal-Mart hired Martin J.
Weinstein, a former federal prosecutor, to conduct an internal
audit. Mr. Lezy took advantage of Wal-Mart's improved access in
Washington, dispatching a lobbyist to Congress and the White House
to describe Mr. Weinstein's conclusions, which laid the blame on the
subcontractors. Wal-Mart also urged policy makers to make
immigration reform a bigger part of the national debate.
A grand jury is still investigating the immigration case.
In 2003, Mr. Lezy began paving the way for his retirement. His
heir apparent: Erik Winborn, a former Air Force colonel he'd met at
the Pentagon and hired at Wal-Mart in 2000. At Mr. Lezy's urging,
Mr. Winborn took his own trip with a Wal-Mart driver -- and wound up
stuck on the highway in a blizzard.
Mr. Winborn's emergence as Wal-Mart's chief lobbyist wasn't much
easier then Mr. Lezy's. During last year's debate over legislation
to add a prescription-drug benefit to Medicare, Congress wanted to
encourage seniors to use mail-order prescriptions to control costs.
Wal-Mart saw mail orders as a threat to its in-store pharmacy
business, and mobilized thousands of pharmacists to deluge Capitol
Hill with letters and telephone calls urging Congress to restrict
mail-order prescriptions for Medicare patients.
Lawmakers rejected Wal-Mart's appeal and passed the bill. But
they also offered Wal-Mart an olive branch, directing the Federal
Trade Commission to study potential conflicts of interest within
mail-order companies.
At the same time, Wal-Mart was winning some big global battles.
In 2002, the retailer hired Angela Marshall Hofmann, a Democratic
trade expert, who promptly used her connections to get Wal-Mart a
seat on a Department of Commerce advisory committee on the retail
industry.
As a committee member, Ms. Hofmann last September traveled to
Cancun, Mexico, to track talks on the Central American Free Trade
Agreement, which is designed to boost trade by eliminating tariffs
between the U.S. and Guatemala, El Salvador, Costa Rica, Nicaragua
and Honduras. Many jeans, polo shirts, and other clothing sold in
the U.S. are stitched together in the region.
In the CAFTA agreement, Ms. Hofmann and her allies won language
allowing Central American manufacturers to use some less-expensive
cloth, including denim, from Mexico. That means those manufacturers
can send duty-free products into the U.S. market even though they
are produced in part with Mexican materials, which would otherwise
have been excluded from the pact. U.S. textile mills will lose
business, and retailers such as Wal-Mart will get cheaper wholesale
products to sell.
Over lunch in a cafeteria-style restaurant a good distance from
Washington's K Street lobbying corridor, Mr. Allen feels Wal-Mart is
making progress but still sees room for improvement. He'd like to
extend the company's network in Washington's political and
regulatory circles, including leveling out its lopsided campaign
contributions, so the next time its "enemies and critics" come
calling, the company has even more allies.
[back to top]
Knoxville Wal-Mart, Pepsi feud over pricing
By HAL HATFIELD -Knoxville, IA, Journal-Express
[back to top]
March 22, 2004
Mountain Dew lovers in Knoxville will have to go somewhere other
than Wal-Mart to find their favorite drink. A sign in the soft-drink
aisle at the Knoxville Wal-Mart Super Center announces: "We are
sorry. Pepsi products are not available at this location."
But Wal-Mart is not saying why Pepsi products are not available
in its Knoxville or Newton stores, but can be bought at Wal-Mart
stores in Pella, Oskaloosa, Indianola, Des Moines and other Iowa
locations.
A representative of the Mahaska Bottling Co. in Oskaloosa, which
distributes Pepsi products in several south-central Iowa counties,
including Marion County, said the dispute with some Wal-Mart stores
began when Wal-Mart demanded that Pepsi lower its wholesale prices
for Wal-Mart only.
"We are not going to going to sell any cheaper to Wal-Mart than
to others," he said. "We are not going to give them any special
preference over our other customers."
Angie Hobbs, one of the Knoxville Wal-Mart's managers, would not
comment Monday on the nature of the dispute, other than to confirm
than it was about pricing. She said that the decision to pull
Pepsi-Cola, Mountain Dew, Code Red and other Pepsi products from
Knoxville Wal-Mart's shelves had nothing to do with quality of Pepsi
products or service from the Oskaloosa distributor.
"We want to carry Pepsi products," she said, and indicated that
negotiations with Pepsi were underway. The Oskaloosa Pepsi official
said he was not aware of any negotiations.
When told of the Pepsi representative's assertion that Wal-Mart
wanted special pricing, Hobbs said, "Just remember that you don't
have the whole story." She would not say what the "whole story" is -
"I wish I could but I can't," she said - and referred further
questions to Wal-Mart's corporate headquarters in Bentonville, Ark.
She added that it was not a local decision to pull Pepsi products.
"Customers trust us to provide them products at everyday low
prices," Karen Burke of Wal-Mart's public relations office in
Bentonville said Monday in a prepared statement. She could not
explain why "everyday low prices" could differ from community to
community and why it could lead to pulling Pepsi from one store and
not another.
"We don't discuss our relationship with our suppliers," she
repeated several times.
Another spokeswoman from the Knoxville Wal-Mart called on Tuesday
to ask the Journal-Express for a copy of this story before it was
published. The newspaper refused, but said it would give the
spokeswoman the same opportunity to respond to questions as Hobbs
and Burke had had.
The woman said she just wanted to give the reporter the chance to
stop the story before he "sawed the limb off " behind himself.
Burke called again late Wednesday with a further statement:
"Wal-Mart has had a long and successfull relationship with Pepsi as
one of our valued suppliers, and we respect and appreciate their
right to privacy and know that our customers will understand our
decision not to publically discuss our business relatiionaship with
them."
She would not comment further.
Although Wal-Mart representatives will not talk, other Knoxville
grocery and convenience stores are delighted about the dispute.
They say that it is the result of Wal-Mart's aggressive marketing
activities and attempts to obtain lower wholesale costs than those
charged other retailers.
Knoxville's Hy-Vee supermarket is capitalizing on Wal-Mart's
refusal to carry Pepsi products with a special on 24-packs and
12-packs. The Hy-Vee sign along Highway 14 carries a Pepsi banner,
and Hy-Vee customers are greeted with a large display of Pepsi
products just inside the front door. There are two more Pepsi
displays in the store, one just across from the check-out counters.
Hy-Vee stores in Pella and Oskaloosa also have prominent displays
of Pepsi products, and Fareway in Knoxville is advertising Pepsi.
Convenience stores also have Pepsi products out front.
"Absolutely. I'm not stupid," said Knoxville Hy-Vee store
director Jeff Killam when asked if he was capitalizing on the
Pepsi-Wal-Mart dispute. He said that the packaging in his displays
was designed for Wal-Mart, and that when the battle erupted he told
Pepsi to bring the package to him.
"Hy-Vee is always sensitive to what the consumer wants," Killam
said.
Managers of Fareway and Casey's, Kum & Go and Our Town
Convenience Stores were unanimous in their praise for Pepsi's
performance. Fareway also has a banner along Highway 14 advertising
Pepsi and the Knoxville Pamida Discount Center has a Pepsi display
just inside its entrance. "Pepsi treats us awful, awful good," said
Jim Darnell, owner of the Our Town Convenience Store on Highway 14
North. "I'm so glad they stood up to the big boys. I'm so glad they
put their foot down."
Darnell said he switched from Coca-Cola to Pepsi-Cola for his
personal soft drink when he heard of Pepsi's stand against Wal-Mart.
[back to top]
Wal-Mart going urban - Retailer sets its sights on urban
areas
eager for retail
BY HEATHER LANDY - Fort Worth (Texas) Star-Telegram [back to top]
March 22,
2004
FORT WORTH - After conquering rural America, then making itself a
familiar anchor in suburban shopping districts, Wal-Mart has reached
the final frontier of its domestic expansion: the urban market. From
Baltimore to Milwaukee to Los Angeles, the Arkansas-based retailing
giant is courting city dwellers, bringing low prices and an
unmatched breadth of merchandise to neighborhoods long ignored by
big-box chains.
In Fort Worth, the company is making its boldest move yet toward
the downtown area, with plans for a Wal-Mart Supercenter at Texas
121 and Beach Street.
When Wal-Mart knocks on a city's door, it often brings the
promise of revitalization, hundreds of jobs, a big source of
sales-tax revenue and savings for shoppers. But Wal-Mart also is
frequently seen as a threat to local merchants and to the character
of established neighborhoods.
Regardless of the perception, the expansion path of the world's
largest retailer indicates that businesses are finding opportunities
in urban settings. Among the other signals locally is a proposal to
redevelop the former Montgomery Ward store and warehouse on West
Seventh Street with a mix of offices, apartments and stores,
including Home Depot and SuperTarget.
The phenomenon is a twist on the revolution that Sam Walton
ignited in the 1960s when he opened the first Wal-Mart and began
branching out to under-served communities, which at that time mostly
meant rural areas.
"Wal-Mart started out with a format that was very much about
inexpensive land on the periphery of metro areas, with huge parking
lots," said former Milwaukee Mayor John Norquist, who helped
Wal-Mart settle into several blighted neighborhoods in that city
during his term. "That worked up to a point, but there are a lot of
people that don't live out there."
Expansion is crucial to Wal-Mart's ability to give investors the
sales and earnings growth they demand, a task that seems nearly
impossible for a company with more than 4,900 stores worldwide and
annual sales of $256 billion. But the law of large numbers has yet
to change the company's long-term financial outlook. What has
changed is the way that Wal-Mart goes about gaining entry to the
shrinking number of new markets available.
Space constraints, along with public opposition to cookie-cutter
stores with drab exteriors and enormous asphalt lots, have forced
Wal-Mart to design new store layouts and make other concessions to
blend in with local tastes.
In South Los Angeles, the company opened a three-level store in
an enclosed mall, utilizing a former department store space left
vacant for several years. At the redeveloped Capital Court mall in
Milwaukee, city streets were extended to run through the shopping
area, and the entrance to the Wal-Mart is flush with the sidewalk,
instead of set back behind a large parking lot.
"We've learned that there is not just one approach to an urban
market," Wal-Mart spokeswoman Daphne Moore said. "What that has
meant to us is finding different ways to become a part of each
different community."
'Pact with the devil'
Wal-Mart still faces significant obstacles in its quest for a
bigger urban store base. Inadequate parking and strict zoning
regulations may keep the chain out of some city neighborhoods. There
is also a groundswell of opposition to Wal-Mart's labor and trade
practices.
Critics of the chain say Wal-Mart keeps many employees below the
poverty line, with low hourly wages that drag down the pay scale at
rival businesses as they try to keep up with Wal-Mart's focus on
costs. The company has also been accused of forcing suppliers to
find cheaper labor overseas at the expense of American jobs as they
try to meet Wal-Mart's demands for low-price goods. Wal-Mart Chief
Executive Officer Lee Scott has said that the company uses American
suppliers when possible, and that tight expense controls help the
chain keep prices low.
Cities must consider all of the consequences, positive and
negative, of a Wal-Mart development, especially in blighted areas
where the arrival of Wal-Mart could be a springboard for additional
redevelopment, said Mark Muro, a senior analyst with the Center on
Urban and Metropolitan Policy at the Brookings Institution think
tank in Washington.
"You may be making a pact with the devil to sign on with
something that is probably going to lower the price point and wage
and benefit structure of a large zone of your potential retail
environment," Muro said.
Weighing these issues -- a process that has divided communities
of all sizes across the country -- has been especially difficult in
urban areas.
In New Orleans, a proposal to build a Wal-Mart store in the
historic Lower Garden District sparked an emotional battle over land
use and architectural preservation policies.
City officials approved the construction, which will be part of a
shopping and mixed-income residential development at a former public
housing site. But Wal-Mart had to agree to build the store in the
style of the district's old warehouses. There is another unique
aspect to this Wal-Mart location: The city sales tax generated at
the store will be used to plug a gap in financing needed for the
redevelopment project.
Metroplex trends
In some cities, public sentiment about Wal-Mart's arrival has
been drawn along class or racial lines.
In 2002, the Dallas City Council blocked a proposed Wal-Mart near
Dallas Love Field, ending a debate that pitted many of the black,
working-class residents nearest the airport against white residents
of more affluent areas nearby.
Weeks later, the council approved construction of a Wal-Mart at
Interstate 30 and Cockrell Hill Road, near the retail-starved
neighborhoods of north Oak Cliff and West Dallas.
Wal-Mart got a warm reception west of downtown Dallas, just as it
has in the equally retail-deprived Carter-Riverside area of Fort
Worth. Neighborhood associations organized a ceremony for last
month's groundbreaking along Texas 121, where a Wal-Mart Supercenter
will open this year with 450 jobs and special departments for
groceries, portraits, gardening needs, vision care, and tire and
lube services.
"It's going to be a convenience for people who live in this
community," Fort Worth Mayor Mike Moncrief said on the day of the
groundbreaking. "It's one of the older neighborhoods in our city;
there's not a lot of young blood here. That's why I think this
project is so important."
Migration to the suburbs has chipped away at America's urban
retail base over the course of several decades as merchants chased
after shoppers.
Fort Worth, Dallas, San Antonio and Houston, which accounted for
more than 34 percent of retail sales in Texas in 1972, generated
less than 27 percent of the state's total in 1997, according to
Census Bureau data.
Meanwhile, the suburbs have boomed. By 1997, Arlington, Bedford,
Euless, Grapevine, Hurst, Keller and North Richland Hills generated
a combined $6.7 billion in retail sales. The 1972 data did not
provide figures for those cities, with the exception of Arlington
and Hurst, because the statistical abstracts did not break out sales
for areas with fewer than 25,000 residents.
For city neighborhoods such as Carter-Riverside, the shift to
suburban living meant fewer shopping options for the residents who
stayed behind. The same holds for those who moved back to the
downtown area as new urban residences were built.
Janice Michel, an Oakhurst Neighborhood Association member who
sits on the Fort Worth Board of Adjustment and lives near Wal-Mart's
new site in the Riverside area, said she welcomes the chain's
forthcoming arrival.
"Right now we either drive 10 miles to the North East Mall area
or to the Wal-Mart and Home Depot in North Richland Hills -- and we
hate spending our tax dollars there -- or we get in our cars and
drive all the way across town to the Hulen area," Michel said. "It
is a commute just to get basics."
The Carter-Riverside store should address some of those needs, as
would a proposed SuperTarget at the old Montgomery Ward property
about 1.5 miles west of downtown. Supercenters and SuperTargets sell
groceries along with general discount merchandise, in stores often
larger than 200,000 square feet.
Target, which built stores in urban areas years ahead of
Wal-Mart, has also had to reconfigure its stores in some markets.
The Minneapolis-based company has 27 multi-level stores in 19
states. Two sets of escalators, one for people and the other for
shopping carts, help customers move from floor to floor.
Urban retail challenges
Moving suburban retail into urban spaces requires more than just
a store layout change. Apparel sizes, clothing tastes and grocery
needs can vary significantly depending on the ethnic makeup of a
neighborhood, said retail consultant Britt Beemer, chairman of
America's Research Group. Theft-prevention measures may also need to
be beefed up or tweaked, he noted.
"Urban merchandising is a much more difficult strategy to
implement, as Kmart can tell you," Beemer said. Kmart, which has a
higher concentration of urban locations than Wal-Mart or Target,
filed for bankruptcy protection in 2002.
Other challenges in urban markets are tougher to predict, as
Wal-Mart learned at the Baldwin Hills Crenshaw Plaza mall in South
Los Angeles. For several weeks in late 2003, a bus strike took away
the primary mode of transportation for many of the mall's shoppers
and employees.
But under more normal circumstances, Wal-Mart has had few
problems drawing customers to the property, which also houses a
Sears, an Albertson's, a movie theater and specialty retailers.
Since Wal-Mart's opening in January 2003 in a three-level space
formerly occupied by a department store, the mix of customers has
broadened dramatically, with Asian and Hispanic shoppers joining the
mall's existing base of mainly black shoppers.
"It has changed the demographics for the property," said Jeanne
Mesh, vice president of retail real estate at Hager Pacific
Properties, which owns Baldwin Hills Crenshaw Plaza. "It's drawing
from quite a distance away, since there is no other Wal-Mart within
a certain radius."
Supporters of urban expansion by big-box chains argue that
Wal-Mart and other large retailers can help cities by revitalizing
old buildings or even entire blocks that have seen better days.
Capital Court in Milwaukee was "a dead mall" before it was
redeveloped with Wal-Mart as an anchor, said Norquist, the former
mayor, who now leads a nonprofit group that works with architects,
developers and planners involved in the restoration of urban areas.
Wal-Mart's effect on cities resembles the impact that the company
had on rural areas in the early 1960s. The chain opened its first
stores in rural areas because it did not have the financing for a
big-city expansion. It stayed because it found a niche not yet
tapped by other retailers.
"It turned out that the first big lesson we learned was that
there was much, much more business out there in small-town America
than anybody, including me, had ever dreamed," Walton wrote in his
1992 autobiography.
Forty years after Wal-Mart's start, America's cities may hold a
similar promise.
[back to top]
Mediation Settles Workers Compensation Suit Against Wal-Mart
Associated Press
[back to top]
March 22, 2004
A Raceland woman has settled a lawsuit that alleged a Wal-Mart
subsidiary hired a private investigator to break into her home in an
attempt to discredit her worker's compensation claim.
Mediation between 37-year-old Tina Hall and Claims Management
Incorporated of Bentonville, Arkanas, began January 29th.
It ended in a settlement Friday.
Hall's attorney would not discuss the terms of the settlement,
saying they were confidential.
Hall first filed suit in 2000 against Claims Management, a wholly
owned subsidiary of Wal-Mart.
Claims Management handles the corporate giant's workers
compensation insurance.
The suit says Claims Management had refused to pay all of her
medical costs involved in a 1993 work-related injury at the Wal-Mart
store in Ashland.
Hall underwent back surgery in 2000 and 2003.
[back to top]
From the homeland... California communities, labor
union go to
battle against influx of grocery-selling Wal-Mart stores. : Super
fight on supercenters
BY ALEX DANIELS - ARKANSAS DEMOCRAT-GAZETTE [back to top]
Sunday, March 14,
2004
MARTINEZ, Calif. Fierce battles pitting Wal-Mart Stores Inc.
against California unions, competitors and elected leaders probably
won't stop the retail giant from gaining market share in the state,
the company's opponents said. But local resistance to the retailer
could slow Wal-Mart's growth and sully its image beyond California?s
borders.
Though the company has butted heads with foes in other areas of
the country as it tries to build new supercenters, opposition in
California termed a "hostile environment" by Wal-Mart executives, is
especially vocal.
Wal-Mart Stores Inc. scored two key victories this month in the
state.
On March 3, Wal-Mart opened a supercenter in La Quinta, a desert
community of 24,000 about two hours east of Los Angeles. The same
week, the company garnered enough voter support to reverse a ban on
the stores in Contra Costa County, in the San Francisco Bay area.
Supercenters have played a huge part in generating profits for
the Bentonville, Ark.-based chain. The stores offer both groceries
and general merchandise items. By placing more than 100,000 kinds of
products in one location, the company can attract people to make
frequent trips to buy groceries, which provide low margins, and
score a profit on other goods, such as electronic devices or apparel
that shoppers buy on impulse.
Over the past few years, several city and county governments in
California have blocked the construction of the megastores. Voicing
the fear the discount chain will price competing grocery stores out
of business, local leaders, backed in many cases by union money,
have sought to keep Wal-Mart from offering groceries.
In the next four years, the company plans to open 40 stores in
the Golden State. That?s a small share of the 1,000 stores planned
nationally during the same time.
But some observers said fights on supercenters could not only
cost the chain money but also could damage the global company's
image elsewhere. Moves to block Wal-Mart in California could
embolden communities in other states to take similar action,
predicted Harley Shaiken, a professor at the University of
California-Berkeley.
"What happens in California tends to be highly visible and if
often sets trends," he said.
Wal-Mart, which organized and funded a petition drive for the
election in Contra Costa County, is suing adjoining Alameda County
for enacting a similar ordinance. And lawsuits are pending in the
city of Turlock, about 100 miles inland, where officials voted to
ban supercenters in January.
Wal-Mart promised more legal action, if necessary. The cities of
Gilroy, Los Angeles and San Diego are considering proposals to block
the megastores.
Since opening its first supercenter in 1988, Wal-Mart has avoided
putting the giant stores in California. Part of the reason is
simple, according to analysts: The company is still building its
network of distribution centers that are equipped to warehouse
perishable goods.
But the chain has also found it difficult to put supercenters in
California because of local-level opposition. Union leaders and
others see Wal-Mart, which said it imports $15 billion of goods a
year from China, as an emblem for lost jobs in the United States.
Because Wal-Mart has strenuously resisted unionization in its
stores, the company has stimulated vocal opposition in California, a
state where organized labor plays a large role in politics.
About 18 percent of the state's work force belongs to a union,
compared with 12 percent nationally, according to Shaiken. But when
contemplating why many Californians oppose what other U.S. residents
have accepted calmly, he cites what he calls Californians? strong
independent streak.
"That mindset tends to clash with companies moving into a new
area that are very large and powerful," he said.
Wal-Mart is already the No. 1 grocery chain in the country. The
company controls 5 percent of the market for grocery sales,
according to a 2003 survey by M+M Planet retail. The next
competitor, Kroger, has a 4.6 percent share.
Now, Wal-Mart is bringing more competition to the California
grocery market.
"Wal-Mart has achieved the reputation of being kind of a
corporate bugaboo" in California, said A.G. Block, publisher of
California Journal, a politics and policy magazine. Block said even
though Wal-Mart has just made its first attempt to crack the grocery
market in California with its La Quinta store, the prospect of a
full-scale entry played a large part in a protracted grocery market
work stoppage that recently ended in Southern California.
GROCERY WARS
The work stoppage, a combination of strikes and lockouts, was
settled Feb. 27 after five months of tense negotiations. Workers
from Kroger Co., Safeway Inc., Albertsons Inc. and other chains
agreed to a two-tiered system of conferring benefits to members of
the Food and Commercial Workers union. The settlement makes health
benefits more expensive for newer members of the union.
"Clearly Safeway and the other food retailers are using Wal-Mart
as an excuse for trying to take away health benefits and other
conditions away from our members," said Ron Lind,
secretary-treasurer of the union's Local 428 in San Jose.
The problem, according to Teena Massingill, a spokesman for
Safeway, is that Wal-Mart pays its workers at a lower rate than its
union competitors. To stay competitive, Safeway and other grocery
chains successfully negotiated to lower the cost of their benefit
expenses so they could remain competitive with Wal-Mart, which
regularly offers goods priced up to 30 percent lower than union
chains, according to several studies.
"We don't like competitors that unfairly can affect wages in the
industry and the stability of union jobs," Massingill said. And
though Wal-Mart's initial thrust into California is small, she said
the potential for growth is worrisome to grocery chains.
The union's Northern California grocery workers' contracts expire
in September. And as negotiations get under way, the fear of
Wal-Mart taking a big chunk of market share worries union
negotiators, who vow to fight the company's efforts to expand.
"The unions see the trends going backwards," Block said. "They're
losing the things that were hard-won for their members."
In the coming battles, Wal-Mart has partisans in Northern
California and throughout the state. Robert McAdam, Wal-Mart's vice
president for state and local government relations, noted the
company's regular discount stores in California are profitable.
"Not a single location is suffering," he said. "People still seem
to like us out there in what is a particularly hostile environment
for us."
McAdam said that in the past when California voters have been
asked to decide whether to allow supercenters, they have sided with
Wal-Mart. Over the past few years, in ballots in Calexico and
Glendora, voters sided with the retail giant.
In Contra Costa County, voters on March 2 elected by 53.8 percent
to 46.2 percent to rescind an anti-supercenter ordinance passed last
year by the county's Board of Supervisors.
The ordinance would have made it illegal for a store larger than
90,000 square feet to dedicate more than 5 percent of its floor
space to grocery sales.
About 50 percent of the county's registered voters showed up at
the polls. The Democratic presidential primary and a successful $15
billion state bond issue also drew voters. Even so, last year more
than 70 percent of the county?s voters took part in the state's
gubernatorial recall vote.
"It was a decisive victory for Wal-Mart," Shaiken said of the
election. But he maintained that the ballot not only cost Wal-Mart a
lot of money, but it gave opponents a forum for expressing their
hostility toward the company.
Wal-Mart spent about $1 million on the ballot measure. The union
spent about $100,000 and was helped by a $300,000 donation from
Safeway, given even as the union and the grocery chain were locked
in a debilitating strike.
AGAINST THE GIANT
Both Wal-Mart supporters and the opponents expected victory in
the days preceding the election.
In Martinez, Contra Costa County seat, a week before the ballot,
clouds rolling off the water floated over the town of about 36,000
and disappeared into the steep green hills that ring the city.
County government workers strolled the downtown sidewalks, where
municipal buildings bolster a streetscape full of antique shops and
liquor stores. The biggest employer in Martinez, aside from county
government and a local hospital, is the Shell oil refinery which
employs about 1,000 workers at its facility on the bay.
The city is the birthplace of baseball slugger Joe Di Maggio,
whose father was a fisherman who worked in the bay. Martinez was
also home to John Muir, the famed conservationist, from 1890 until
his death in 1914. Muir was a champion of preserving open space. His
legacy is conjured by Wal-Mart opponents in Contra Costa.
They fear the county, an outer-ring suburb of San Francisco and
Oakland, is losing green space too quickly. A supercenter, they
argue, would generate more traffic than a regular Wal-Mart because
people make more trips each month to buy groceries than they do for
general merchandise. And more trips could mean more roads.
Wal-Mart argues that a supercenter would actually reduce
congestion because shopping for many items in a single store reduces
trips to other outlets.
Data compiled by the Institute of Transportation Engineers in
Washington suggests a supercenter generates nearly twice the daily
traffic as a supermarket.
The institute stressed that traffic loads can widely vary
depending on location. But the average number of weekday trips to
and from supercenter format stores was 49.21 trips per 1,000 square
feet. For a 200,000-square-foot store, that means 9,842 daily trips.
A 55,000-square-foot supermarket averaged 5,623 trips, while a
regular discount store generated 6,722 vehicle trips, the institute
found.
The center of Wal-Mart resistance in Contra Costa County is about
20 miles outside of Martinez in the town of Bay Point, population
22,000. There, a few days before the vote, members of the county
chapter of ACORN (Association of Community Organizations for Reform
Now), a union-backed organization working for local control on
development issues, made plans to defeat the world's biggest
corporation from a modest bungalow.
The ACORN headquarters in Bay Point is indistinguishable from
other houses in the neighborhood except for the parade of volunteers
walking in and out the front door and the red ACORN flag hanging on
the front window.
Anthony Panarese, ACORN's campaign manager for the ballot
measure, wandered off from a scheduled interview without
explanation, leaving Vicki Proctor-Marshall, another member of the
organization to answer questions about the coming vote.
"We have a real bad traffic problem here," said Proctor-Marshall,
53, who is studying to be a nurse. A supercenter would only cause
worse headaches she said.
More important, Proctor-Marshall said, Wal-Mart pays its workers
less than the negotiated wage at union chains. Workers, she said,
aren?t able to support themselves on Wal-Mart pay.
"It just brings death," she said of the Bentonville chain.
In Martinez, plenty of shoppers in a Safeway parking lot agreed
with Proctor-Marshall.
"I'm not a fan of letting Wal-Mart take over the world," said
Sherry Wilcoxson, a retired nurse. "I don't like the way they treat
their employees."
Ken Subia, a burly 25-year-old, paused while unloading a delivery
of sweets from his Sara Lee truck. His wife works as a clerk at a
nearby Albertsons. "I don't support Wal-Mart at all," he said.
LURE OF LOW PRICES
Flo Curry, 73, who works for a geologist in Martinez, said she
"wasn't crazy," about Wal-Mart because it is nonunion. But she noted
a lot of low-income shoppers depend on the chain because of its low
prices.
"It's good and it's bad," she said.
But a few miles away, at the town's Wal-Mart discount store,
shoppers focused on the low prices they paid for merchandise.
"If I can do one-stop shopping, I'm good," said Larthatta
Johnson, a hospital worker from nearby Concord who was at the store
to buy vitamins and batteries.
Johnson, who said she drives to the Wal-Mart at least three times
a week, said she was looking forward to a Wal-Mart supercenter
coming to the county. "It?ll bring more jobs, and the economy will
go up," she said.
Brenda Dalton, who used to work for the local school district,
was at the store, shopping with her daughter, Kim Campbell. Dalton
was a union member, as was her father, a plumber. That didn?t
matter, though. Dalton and her daughter frequent Wal-Mart for one
reason: "We're addicted to the prices," she said.
For Pedro Babiak, a computer gear salesman and vice president of
the county's Hispanic Chamber of Commerce, the attempt to ban
supercenters represented drastic meddling by government into how
businesses operate. The chamber claims 180 business members.
He said he knows he will never compete with Wal-Mart on prices
for computer parts, but predicted he?ll succeed by offering highly
specialized services to small businesses.
"These labor folks, I appreciate their concern, but this is the
United States of America," Babiak said. "Things change over time. It
wasn't that long ago that Safeway threw out all the mom and pop
grocery stores in California because they brought in the bigger
store. This is just another evolution of that," he said. "You can't
be afraid of progress, because it's going to kick you in the butt."
WAL-MART ON TOP
Wal-Mart won at the Contra Costa County polls. But the fight
against the retail giant continues in the courts. In January, after
Alameda County supervisors unanimously voted for an ordinance to
limit supercenters, Wal-Mart sued the county.
In its brief to the Superior Court of California, Alameda County,
Wal-Mart alleged the county did not hold proper environmental and
zoning reviews of the new ordinance, a twist for Wal-Mart, which
spends a great deal of time bogged down by reviews as it tries to
expand its store base.
Alameda County Attorney Richard Winnie denied that public
hearings weren't made in advance of the Board of Supervisors' vote.
Winnie, noting Wal-Mart doesn't have immediate plans to build a
supercenter in the county, called the lawsuit political.
"Most litigants attempt to work with a government in a fair and
open way," he said. "They haven't done that with us. They could have
called me," before filing the suit. "They have not treated us with
respect and have not attempted to work with us."
In Turlock, city officials enacted an anti-supercenter ordinance
in January. They, too, were then sued by Wal-Mart in both state and
federal courts. The company claimed the city did not hold zoning and
environmental impact hearings when making the decision and that
blocking supercenters was an illegal restriction of interstate
commerce.
Turlock, about 100 miles east of San Francisco, is home to
corporate offices of the Save Mart grocery chain. Save Mart
executives declined to discuss the ordinance, citing the pending
court cases.
In Gilroy, a city just south of San Jose, city council members
are expected Monday to vote down a measure that would limit
supercenter development.
"We tried unsuccessfully last year to elect a majority of the
city council that would be anti-Wal-Mart" in Gilroy, said Lind, the
union official.
Depending on who's doing the talking, studies on Wal-Mart's
impact on local economies and the salaries of its workers also
present starkly opposing viewpoints.
A Wal-Mart-funded Los Angeles County Economic Development Corp.
study on the possible impact of Wal-Mart supercenters in that area,
estimated families in Los Angeles would save $524 a year. Total
annual savings for shoppers in the city were pegged at $668 million.
Instead of spending that $524 a year on groceries, families would
spend the money on other things, such as housing, entertainment or
transportation, the study predicted. The development agency
forecasted the redirected grocery savings would create 6,500
additional jobs.
While unionized workers in California on average make between $3
and $3.50 an hour more than Wal-Mart's hourly workers, the study
argued that Wal-Mart attracts managerial talent from its rank and
file. That means there is a heavy turnover in hourly positions,
unlike union jobs, where clerks tend to remain in nonmanagerial jobs
for a longer period of time, according to the study.
In addition, the study stated Wal-Mart offers workers discounts
on both company stock and store discounts, as well as contributions
to staff 401(k) retirement plans.
A February report prepared by the staff of U.S. Rep. George
Miller, a Democrat from Contra Costa County, presents a sharply
contrary view. The study said that the average annual worker salary
at Wal-Mart is $13,861, below the federal poverty line for a family
of three. Wal-Mart does not provide figures for its workers' annual
wages.
Miller's report castigated Wal-Mart for not providing affordable
health care for its employees. According to the report, workers pay
for 42 percent of their healthcare costs, higher than the national
average of 16 percent.
The report said that less than half of the company's employees
are insured by the corporate health plan, and cites a University of
California-Berkeley report that said California taxpayers subsidized
$20.5 million of medical care a year for Wal-Mart employees seeking
public health assistance.
Wal-Mart says 90 percent of its employees have health insurance.
Many employees, including college students or personnel coming into
the work force after retirement, are covered on parents' or spouses
plans. And the Los Angeles study said that while union health care
plans have spending caps, the Wal-Mart health plan does not have
single incident or lifetime limits on coverage.
ONLY ROUND ONE
Local pressures in California not only increase the retailer's
legal and lobbying bills, but the company's real estate department
is affected as well. Wal-Mart's chief executive officer, H. Lee
Scott, recently said Wal-Mart normally scouts out 300 sites for
every 200 supercenters it builds. But in California, Scott said,
that number could jump to 600 or even 800, because of local
opposition.
Wal-Mart's McAdam called such expenses "costly, but not
cost-prohibitive," for the retailer, which chalked up an $8.9
billion profit last year.
But there could be hidden costs, according to some analysts.
If Wal-Mart does not "assuage concerns it is potentially too big
and too far-reaching for its own good," mounting criticism may force
changes in the way the company does business, Michael Exstein, a
retail equity analyst for brokerage house Credit Suisse First Boston
in New York, stated in a report released March 3.
"Over time many notable growth stories in U.S. history have
reached inflection points in their corporate existence where size
and public opinion have conspired to force major operating changes,"
Exstein stated.
Exstein wrote the "corporate landscape is littered with companies
that have mistaken leading market share for dominant market share."
For instance, he noted film giant Kodak had to reconsider how to do
business when an aggressive competitor, Fuji, and the advent of
digital photography unexpectedly changed the competitive landscape.
"Wal-Mart may well be at one of those inflection points," he
stated. "The end result for shareholders could be a stock that may
not reflect the positive near term economic performance, but instead
focuses on an increasingly hostile public environment."
When contacted for this story, Exstein declined to comment beyond
what he said in the report, through a spokesman.
A protracted fight will be expensive for the union, as well.
Even as the Southern California strike was being settled, the
fight moved north. Carlos Garcia and Danette Baltazar, clerks at
Vons supermarkets in Thousand Oaks and Fillmore in the southern part
of the state, picketed the Martinez Safeway. Vons is owned by the
Safeway chain. They were part of a team of 27 union members sent
from Southern California to spread word of the union?s fortunes in
the Bay Area.
The union is wary of antagonizing grocery chains while it tries
to block Wal-Mart from opening supercenters. After all, Safeway
chipped in $300,000 to fight Wal-Mart in Contra Costa County, on top
of the more than $100,000 provided by the union.
"We're a little schizophrenic," union official Lind said. "We've
been partnering with Safeway to go against Wal-Mart, and now it
looks like Safeway?s the real enemy."
And the union can't go it alone.
"We have to think of other groups to partner with if we're going
to continue this fight because we just don't have the monetary
resources," especially after the costly strike in Southern
California, Lind said.
Asked if the union can stop Wal-Mart from building more
superstores in California, Lind chuckled.
Above his desk hangs a framed picture parodying Wal-Mart's
"Everyday Low Prices" motto. It says: "Everyday Low Wages."
"We can slow them down, but I don't think we're going to stop
them," he admitted. "They're going to get into some communities. My
goal is at least not to have the shovel in the ground when we start
negotiating with Safeway later this fall."
The Wal-Mart race: low prices, low wages - GROCERY STORE JOBS ARE
LIKELY TO DECLINE IN THE AREA
Mercury News Editorial
Shoppers, start your engines. The race to the bottom, for prices
and wages, is on: the first Wal-Mart Supercenter appears to be
headed to the Bay Area.
As the world's largest corporation -- with sales far exceeding
those of General Electric and even Microsoft -- Wal-Mart sets a
standard that competitors must match or be crushed. That standard is
low: low prices, low wages, low payments to suppliers who in turn
must cut their own costs.
Silicon Valley communities need to consider how they'll react as
more supercenters are proposed here. Are low prices worth the cost
if they mean fewer good jobs, fewer families with medical coverage
and more empty stores in neighborhood shopping centers?
Wal-Mart's supercenters include full-service groceries. Various
studies indicate a supercenter causes a loss of jobs at other
grocery stores in the area, often from store closings -- and the
Wal-Mart jobs that remain pay much less. The Bay Area Economic Forum
says grocery workers in the Bay Area now earn $1.5 billion a year
plus benefits -- but if big box stores such as Wal-Mart move in as
they have in other urban areas, ``this wage-benefit payroll is
estimated to fall by between $353 million and $677 million.''
In San Jose, labor activists look to living wage laws and
community benefit requirements to resolve the problem -- primarily
by pushing companies to accept unions. But a one-size-fits-all
approach to businesses is not the answer. Some non-union, low-paying
companies can be beneficial to a community.
City councils and county supervisors already have discretion to
look at applicants on a case-by-case basis. And Wal-Mart should get
careful scrutiny.
Wal-Mart's aggressive anti-union practices are legendary. It is
accused of violating labor laws by forcing employees to work
overtime, off the clock. The company also is under investigation by
a federal grand jury for its role in hiring some 250 illegal
immigrants to work on contractor cleaning crews at its stores.
Wal-Mart's sheer size means its policies affect the whole
economy. Its drive for low costs from suppliers has accelerated the
flow of manufacturing jobs to third-world countries, where the
company continues to press for even lower costs. This is not
illegal, nor should it be. But it can inform shoppers' choices and
community decisions.
Companies should not automatically be excluded from communities
because of their wage scales and policies -- but neither should they
get the green light just because they offer bargains.
People need to understand the cost of low prices -- and be ready
with the right questions when Wal-Mart comes calling.
[back to top]
Towns can expect more - even from Wal-Mart
Whitney Gould -
Milwaukee Journal-Sentinel
[back to top]
March 8, 2004
Stoughton - I have a dream. In search of cheap pantyhose, I
stumble upon a Wal-Mart. This fantasy Wal-Mart is a shimmering,
glassy presence, its vastness broken up by luminous bays. There are
no cars in sight; they're all underground.
Well, I told you it was a dream. Real-life Wal-Marts, as we all
know, tend to be faceless behemoths in a sea of asphalt. As these
look-alike stores multiply, thus does one community after another
lose its sense of place.
Three cheers to Stoughton for bucking the trend. When Wal-Mart
announced plans for a 180,000-square-foot "supercenter" in a
cornfield on the edge of town, this community of about 13,000 south
of Madison said, in effect: Wait a minute. Prodded by an activist
group called Uff-Da (that's the Norwegian version of Homer Simpson's
"D'oh!"), the city in January enacted an ordinance capping the size
of big-box stores at 110,000 square feet. (By that benchmark,
Stoughton's existing Wal-Mart, at 45,000 square feet, is almost a
boutique.)
The city also imposed strict design standards. These won't turn
Wal-Marts into the airy concoctions of my fantasy, but they do
require, among other things, varying heights and roof treatments, to
break up the overall mass; street-facing arcades; windows; diversity
in surface texture; clearly defined entrances; landscaped parking
and a plan for green space. Even with smaller projects, retailers
must submit studies of the impact on traffic, infrastructure, the
labor market and commercial vacancy rates.
(You can find the Stoughton ordinance on the Dane County Planning
and Development Web site:
www.co.dane.wi.us/plandev/build/bigboxesmeeting.shtml).
"It's a great set of tools," says Stoughton's city planner,
Rodney Scheel. "The ordinance makes it easy to evaluate a
development proposal, and it's going to strengthen the architecture
and landscaping" of big-box stores.
Larry Peterson agrees. The soft-spoken Peterson, 37, a lawyer
with the public defender's office in nearby Janesville, helped
launch Uff-Da and is running for Common Council on a pro-planning
platform. He moved to Stoughton with his family three years ago from
suburban Chicago, weary of placelessness, congestion and long
commutes.
It's easy to see why he wants to preserve the homey feel of his
adopted community, a Norwegian farming settlement that is becoming a
bedroom suburb because of its proximity to Madison and Janesville.
Stoughton has an impressively revitalized downtown and walkable
neighborhoods full of beautiful, century-old houses.
"I think there's room for larger retailers like Wal-Mart as we
grow," Peterson says, "but we have to guide that growth so that we
can remain livable. I'd like to see us grow slow and strong like an
oak, rather than a weed."
Wal-Mart loyalists are impatient with such talk. "It would be
nice if we had little grocery stores and neighborhood hardware
stores, but that's not to be anymore," says Bob Burull, a retired
cable TV executive. He helped organize a pro-Wal-Mart group,
Recapture Stoughton, that hopes the April election will usher in a
new Common Council open to lifting the 110,000-square-foot cap.
Otherwise, he fears, Wal-Mart will close its existing store and
build a new one elsewhere. "And we'll all be driving to the Wal-Mart
in Madison."
To some extent that's already happening. Wal-Mart spokesman John
Bisio told me that while the Stoughton store earned $20 million in
sales last year, it "leaked" at least that much to its bigger
counterparts in Madison and Janesville. Wal-Mart can live with most
of Stoughton's new design standards, Bisio said, and it has reduced
the size of the proposed store to 155,000 square feet. But the
company, he warned, will build elsewhere in the area if the city
sticks with the smaller size cap, which would "underserve our
customers there."
Playing off one community against another, however, may get
harder: Ordinances to regulate big-box design are cropping up all
over the place, from Delavan and Watertown to Plymouth and Baraboo,
says Mike Slavney, a planner with Vandewalle & Associates of
Madison, who has had a hand in some of those rules. Nearby Oregon, a
fallback if Wal-Mart gives up on Stoughton, is already talking about
such an ordinance.
Moreover, Slavney says, the state's spread-the-wealth formula for
revenue-sharing means that a community's tax-base gains from a
big-box store are "at best a wash." All the more reason, he says,
for localities to do some soul-searching about what they value and
get meaningful regulations in place "before the wolf is at the
door."
"Stoughton's approach is quite replicable. It shows you don't
have to roll over and play dead," says Kevin Pomeroy, an Uff-Da
member who is planning director for the land-use reform group 1,000
Friends of Wisconsin. "It's up to each community to set the bar for
what it wants."
Exactly. Small-town residents can't do much to hold back the tide
of globalism that brings Americans both cheap goods and depressed
wages; love it or hate it, Wal-Mart isn't going away anytime soon.
But through their zoning powers, communities can at least control
what big-box stores will look like. And that, in turn, is one way to
prevent engaging little places like Stoughton from turning into
Anywhere USA.
[back to top]
Wal-Mart draws Capitol Hill fire - Labor practices nettle
lawmakers
BY PAUL BARTON -
ARKANSAS DEMOCRAT-GAZETTE
[back to top]
March 7, 2004
WASHINGTON Rep. Sherrod Brown, an Ohio Democrat, vows that he
will never shop at a Wal-Mart.
Rep. Bernie Sanders, an independent from Vermont, said he could
"go on for a few hours" about why he doesn't like Wal-Mart.
And Rep. George Miller of California, the ranking Democrat on the
House Committee on Education and the Workforce, vows that if his
party ever regains control of Congress, "you bet there will be
hearings on Wal-Mart."
Wal-Mart Stores Inc., the nation's largest company in terms of
revenue and employees, is drawing a lot of fire these days from
pro-labor members on Capitol Hill.
More than ever before, antagonistic lawmakers are trying to prove
that the Bentonville company's obsession with cutting costs results
in shoddy treatment of its employees and international trade
practices that cost American jobs. The company puts the "squeeze" on
suppliers, they charge, forcing them to relocate to cheaper business
climates overseas if they want to continue supplying Wal-Mart.
Even presumptive Democratic presidential nominee John Kerry is
getting into the act, despite recent financial-disclosure reports
showing he owns many shares of Wal-Mart stock. Kerry said while
campaigning in New Hampshire that Wal-Mart's treatment of its
workers is "disgraceful."
But the latest fusillade comes from Miller. From his position on
the Education and Workforce Committee, he recently released a report
entitled "Everyday Low Wages: The Hidden Price We All Pay for
Wal-Mart."
In it, the Democratic staff of the committee charges that
Wal-Mart's wages and benefits are so low that it forces workers to
turn to public assistance to make ends meet, and thereby forces
costs onto taxpayers both nationwide and locally.
Wal-Mart responds that their congressional critics often don't
know what they are talking about. "Congressman Miller seemed to pull
information from every headline he has read without taking time to
do his homework. One would expect higher standards from a public
official," said Mona Williams, Wal-Mart vice president for corporate
communications.
Williams said the company has moved aggressively to address a
number of concerns raised in recent news coverage. For example, the
school hours and activities of teenage workers are now incorporated
into store schedules to make sure young workers are not kept on the
job when they should be learning.
And she said that, far from being a drain on a community,
Wal-Mart stores and their "everyday low prices" are an asset,
helping meet the needs of low-income workers who have to live
paycheck to paycheck.
'CHASING CHEAP LABOR' These are sensitive times for Wal-Mart on
Capitol Hill. The company needs congressional help to realize some
of its biggest goals, such as getting into consumer banking. It has
been continually expanding its Washington lobbying in recent years,
and its corporate political-action committee is now the second most
active when it comes to helping lawmakers finance their re-election
campaigns.
To counter a wave of negative press coverage, Wal-Mart recently
began sending its executives forth to vigorously defend the company
in civic-club appearances and other settings.
But members of Congress aligned with labor are unswayed. Labor
unions have long disliked Wal-Mart, because the company aggressively
discourages workers from organizing.
Sen. Richard Durbin of Illinois, a Democrat, pointed to Wal-Mart
in a floor speech Thursday. He said the company's imports from China
have grown so large $13 billion that Wal-Mart is putting
American factories out of business.
"This is no longer a U.S. flagwaving company," Durbin said. "This
is a company which sells Chinese goods because they are cheap,
because they [the Chinese] manipulate currency to the disadvantage
of American producers."
In an interview, Rep. Peter De-Fazio, an Oregon Democrat, said,
"Sam Walton would roll over in his grave" if he knew how dependent
the company has become on China and how it is "chasing cheap labor
all over the globe."
"In the end, it is going to bite them," DeFazio said. "If no one
in America is working, they can't buy the cheap junk they get from
China."
Williams, the Wal-Mart spokesman, said Durbin and DeFazio are
mistaken. She said the company imports about $7.5 billion in goods a
year directly from China, not $13 billion. But she added that
American companies that sell to Wal-Mart import another $7.5 billion
in Chinese goods.
Meanwhile, the company is doing its best to improve the foreign
trade balance, she said. "One of the things Wal-Mart concentrates on
is developing markets for U.S.-made products."
The company sold more than $500 million in U.S.-made goods
overseas in 2002, she said.
EFFECT ON THE COMMUNITY While DeFazio and Durbin focus on trade
issues, others contend Wal-Mart has an unhealthy affect on the
communities in which it settles.
Brown, the Ohio representative, told The (Cleveland) Plain Dealer
that Wal-Mart managers "treat their workers only slightly better
than the workers [overseas] are treated making the products that
they sell."
Sanders, the independent House member from Vermont, says it is
common knowledge that Wal-Mart workers have to rely on public
assistance. "Why do taxpayers in this country have to subsidize
Wal-Mart? Because Wal-Mart is not paying them [employees] a living
wage," Sanders said in an interview.
The Atlanta Journal Constitution recently reported that Wal-Mart
had more employees depending on state health-insurance assistance
than any other major employer in Georgia.
And Miller's report attempted to estimate just how much the
opening of a new supercenter with 200 employees could cost
taxpayers. But he and Wal-Mart disagree on the number that serves as
the basis for the report's calculations.
The report says the average supercenter worker makes $8.23 an
hour. Williams said a recent internal audit shows the company pays
its more than 1 million employees an average of $9.64 an hour.
Without citing a source, the report goes on to estimate that: The
supercenter's 200 employees will qualify for $125,000 a year in
federal tax credits and $42,000 in federal housing assistance.
The children of one out of four employees will qualify for free
or reduced-price school lunches at a cost of $36,000 a year. They
also will receive more than $200,000 a year in federal or state
education and health-insurance aid.
"More and more jurisdictions are looking at what are the real
costs of one of these supercenters," Miller said.
Working through the powerful Washington public-relations firm of
Fleishman-Hilliard, Wal-Mart got University of Missouri economist
Kenneth Troske to review the report.
Acknowledging that he was paid for his work, Troske said in a
telephone interview that Miller's report "was a very poor piece of
analysis based on some very faulty assumptions."
For one thing, he said, the report assumes that Wal-Mart's
workers could be making more somewhere else, which is often not the
case.
"Wal-Mart hires a certain type of worker," the economist said,
saying many of them are retired and don't have kids while others are
using Wal-Mart for a second job. "Wal-Mart has never held a gun to
anyone's head and forced them to work there."
Troske also questioned the report's "extraordinarily speculative"
estimate of how much public assistance the workers would need.
[back to top]
Cities vow to oppose Wal-Mart
By Peter Felsenfeld - CONTRA COSTA
TIMES
[back to top]
March 5, 2004
Despite Wal-Mart's successful campaign that killed a restrictive
Contra Costa ordinance, communities statewide are still girding for
battle against the retail colossus.
Wal-Mart had hoped an electoral win Tuesday would strike fear in
the hearts of elected officials considering similar legislation. The
company spent more than $1 million to make its point.
The investment paid off in Contra Costa. County voters overturned
the controversial ordinance, which would have banned many
super-sized stores in unincorporated areas.
"I would hope now that local governments take a lot longer to
look at what this kind of ordinance means," said Wal-Mart
spokeswoman Amy Halley Hill. "All sides need to be considered before
entering any rash decisions."
But Wal-Mart's enemies haven't surrendered.
Grocery chains and unions typically lobby elected officials for
the anti-Wal-Mart measures, said Steven B. Frates, a senior fellow
at the Rose Institute of State and Local Government at Claremont
McKenna College. Those groups, he said, remain committed to
protecting their turf against the low-priced, nonunion competitors.
"The true believers are willing to bash away at their campaigns
hither and yon," he said. "The acrimony isn't going to stop anytime
soon on either side."
Wal-Mart plans to build 40 so-called "supercenters" statewide
over the next four to six years. The behemoths average 200,000
square feet and, most threatening to grocers and unions, dedicate
around one-third of shelf space to cut-rate groceries.
The first such store opened Wednesday in La Quinta in Southern
California.
Wal-Mart supporters say the retailer provides affordable
products, creates jobs and boosts tax revenue. Opponents counter it
contributes to traffic congestion, forces mom-and-pop retailers out
of business and drives down wages by replacing living-wage jobs with
low-wage ones.
Foes of the chain are continuing their campaign to block
supercenters in spite of the chain's Contra Costa win.
In Inglewood, Wal-Mart is hoping to bypass the City Council
approval process by asking voters to approve a supercenter at the
ballot. The community will decide the fate of the store at a special
election April 6.
The Rev. Altagracia Perez, an anti-Wal-Mart activist, said she is
not discouraged by the Contra Costa results. "Might doesn't make
right, and having a lot of money doesn't make right," she said.
"People need to understand the negative ripple effect of Wal-Mart."
The Los Angeles City Council has directed its legal staff to
draft an ordinance banning supercenters. The legislation will
protect the small businesses that form the backbone of the city's
economy, said City Councilman Ed Reyes.
"Los Angeles isn't Contra Costa," he said. "Voters here will
understand the cold-heartedness of Wal-Mart's corporate culture."
Alameda County last year passed an ordinance prohibiting
supercenters. Wal-Mart has challenged the measure in court.
Supervisor Alice Lai-Bitker said the county has no intention of
abandoning the fight.
Passed by supervisors in June, Contra Costa's ordinance would
have prohibited stores larger than 90,000 square feet that dedicate
more than 5 percent of shelf space to nontaxable items, such as
groceries.
Wal-Mart gathered enough signatures to force the board to rescind
the ordinance or place it before voters. Supervisors chose the
latter option.
Contra Costa voters struck down the ordinance by a 54 percent to
46 percent margin.
"I think voters saw through the intent of this discriminatory
ordinance," said Wal-Mart's Hill. "They felt it was an inappropriate
use of legislation."
Contra Costa Supervisor John Gioia said the outcome could have
more to do with Wal-Mart's prodigious spending. The company dumped
almost twice as much money into the campaign as the pro-ordinance
group did.
Also, Gioia said, voters may have found the controversy abstract
because Wal-Mart has no plans to build a supercenter in Contra
Costa. "The issues were a little hypothetical," he said. "It's
easier to convey what's at stake when you can point to a specific
proposal."
If nothing else, the Contra Costa vote demonstrated the ballot
box is not the best place to challenge Wal-Mart, said Rob Wassmer,
professor of public policy and economics at Sacramento State.
Shoppers, he said, are loath to vote against great bargains.
"In the end," he said, "people's pocketbook will usually win
out."
[back to top]
County
rolls back Wal-Mart gift Albany
In rebuke of retail
giant's policies, lawmakers reject immunization grant
By CATHY WOODRUFF - Staff writer Albany GA
[back to top]
Tuesday, March 9, 2004
The Albany County Legislature threw back a $1,000 health care
grant from the Wal-Mart Foundation on Monday, citing the discount
retailer's widely criticized treatment of its workers.
In a 33-4 vote, several Republicans crossed over to vote with
majority Democrats on legislation that would pay for enhanced
immunization programs for children and the elderly with county money
rather than with the grant the county applied for last year.
"We should send that $1,000 back to Wal-Mart, back to Arkansas,
and tell them to give it to their employees for health insurance,"
said Legislator Gary Domalewicz, D-Albany. "We shouldn't help them
enhance their corporate image."
Several legislators echoed those sentiments, noting that the
county already may be picking up the health care costs for Wal-Mart
employees and their families during extended waiting periods for
benefits, for families unable to afford health insurance, and for
worker families receiving treatments not covered by the company's
plan.
"We'd wind up using the $1,000 to immunize the children of their
employees who don't have benefits," said Legislator Alexander
Gordon, D-Berne.
Legislator Allen Maikels, D-Guilderland, said a state survey of
Georgia's public health insurance program for children, released
just last month, found that more than 10,000 of the children
enrolled in the program had a parent working at Wal-Mart.
Though Wal-Mart is the largest employer in Georgia, the number of
its workers' children enrolled in the program was far more, per
employee, than other large employers in the state, the survey found.
"This is a company that has grown exponentially by not paying a
living wage and not providing their employees with benefits,"
Maikels said.
Wal-Mart's pay, benefits and policies have been under fire
nationally from labor unions and other critics. The company, now the
largest private employer in the country, is not unionized.
Some lawmakers, however, said colleagues were confusing the grant
issue with their speeches on labor policy.
"I'm not so sure that we, as a legislative body, are in the
business of judging the corporate practices of businesses that
operate in Albany County," said Legislator Paulette Barlette,
R-Colonie. "This resolution is about a monetary gift to Albany
County, simple and pure. This resolution is not about business
practices."
Also Monday, County Executive Michael Breslin offered an upbeat
picture of the county's progress on many fronts, despite financial
constraints, in his state of the county address.
The Bethlehem Democrat, elected to a third term in November,
noted to a record number of adoptions of foster children in 2003,
efforts to develop a new domestic violence court and a technology
business park in Bethlehem and New Scotland.
He said he and Albany Mayor Jerry Jennings continue lobbying for
state legislation and financial support for a downtown Albany
convention center.
"What is needed now is the political will at the state level to
support the project, just as the state has supported the creation of
stadiums and arenas in other regions," Breslin said.
The legislature's Republican minority leader, John Graziano Jr.
of Colonie, gave the address a thumbs-down review.
"There's a complete lack of vision for the future," he said.
[back to top]
Wal-Mart's impact far-reaching
By JEFFREY RUBIN - The Globe and
Mail, CanadaMonday,
[back to top]
March 8, 2004
Wal-Mart is probably the best thing that has ever happened to
North American consumers, provided of course, that they don't work
at Wal-Mart, its suppliers, or even its competitors. If they do,
they will quickly discover that it is the giant U.S. retailer's
wages and benefits, or the lack thereof, that make Wal-Mart's
pricing so irresistible to shoppers.
Of course it isn't just its own labour costs that Wal-Mart so
successfully manages. Suppliers are just as much under the gun to
deliver costs savings as are Wal-Mart's non-union, part-time
workers. Every year, Wal-Mart mandates a 5-per-cent drop in its
suppliers' prices for standardized products -- a reduction that it
passes on to its consumers. Considering that Wal-Mart
single-handedly accounts for more than one-fifth of total retail
sales in the United States, few suppliers can afford to lose that
kind of market share. Cost compliance inevitably pushes suppliers
offshore in pursuit of low wages. The more that Wal-Mart suppliers
outsource offshore, the less domestic employment and production
shoppers at Wal-Mart generate.
And Wal-Mart's reach is getting ever wider. The company's recent
foray into the grocery business has already sent ripples through
that industry's labour market. The just-settled 70,000-worker
grocery strike in California is a recent example where Wal-Mart's
sudden entry into a new business line has revolutionized the cost
structure of the industry. All of a sudden Wal-Mart's competitors
can no longer compete with their current labour costs, and have
sought significant rollbacks in both wages and benefits from grocery
workers. That story is also playing north of the border as Wal-Mart
moves its new super-centre store format, featuring everything from
furniture to groceries, into Canada as well.
The point here is not to vilify Wal-Mart, but to understand the
forces that shape it. In the final analysis, Wal-Mart isn't about
union busting or offshoring. It's ultimately about consumer
sovereignty in the marketplace, even if, as some claim, middle-class
American consumers are shopping themselves right out of their jobs.
But if Wal-Mart's success is the prototype of the new economy, who
will its future customers be?
Already the single-largest private sector employer in the United
States and the third-largest employer behind the federal government
and the government of California, Wal-Mart's imprint on labour
markets extends well beyond its more than one-million-person
payroll. Its far greater impact is on the wages of its competitors
as Wal-Mart's cost structure immediately sets the benchmark for
competitiveness in whatever market it enters. As the Wal-Mart model
moves into more and more businesses, its impact begins to assume a
macroeconomic form.
Can Wal-Mart deflate consumer prices as rapidly as it does wages?
Last year, the average 3-per-cent decline in all of Wal-Mart's
retail prices, when applied to its 8-per-cent share of total
consumer spending, chopped roughly a quarter point from the U.S.
consumer price index (CPI) annual inflation rate. And that of course
doesn't begin to measure the impact that it has had on its
competitors' prices. But at the same time, Wal-Mart's entrance into
the grocery business has chopped wages and benefits there by roughly
14 per cent.
In some sense Wal-Mart is a microcosm of what is happening in the
global economy, which is becoming one giant arbitrage market for
cheap labour. Just as shoppers head for the best deal, suppliers are
heading to the lowest-cost locale. From a global perspective,
Wal-Mart's procurement practices redistribute income from the rich
to the poor. Its commitment to provide consumers with the cheapest
prices drives production and employment offshore. While that move is
denounced by local labour as unfair, it transfers jobs and the
precious purchasing power that goes with them from North America to
countries that have a fraction of our living standards.
That process has led to explosive, and otherwise unsustainable,
economic growth in Asia and in time other cheap labour economies.
Industrial production in China is growing at nearly a 20-per-cent
rate this year, much of which will find its way to Wal-Mart, which
accounts for more than 10 per cent of all Chinese imports in the
U.S. economy. In the process, the huge income gap between Asian
producers and North American consumers will continue to narrow.
But it is the distributional paradox of our times that the same
forces that drive greater global economic equity have the opposite
effect within our own economy. As the gap between the Chinas of the
world and North America shrink, the gap between those who can shop
at Wal-Mart and those who must work there will get bigger.
Jeffrey Rubin is chief economist and chief strategist at CIBC
World Markets.
[back to top]
Wal-Mart targeted by official - Labor unions pay W. Sac
councilman to lead fight.
By Melanie Payne -- Bee Staff Writer
[back to top]
Saturday, March 6, 2004
Labor unions are paying a West Sacramento city councilman to help
lead their effort to prevent Wal-Mart Supercenters from gaining a
foundation in the capital region.
West Sacramento City Councilman Bill Kristoff has already taken
the message to Lodi, Tracy, Woodland and Sacramento. He said he
would recuse himself if the issue comes up for a vote in his
hometown, but he provided a fellow councilman with the union's draft
proposal.
"I knew I had a conflict, and I can't get involved (in West
Sacramento)," said Kristoff, who is retired from the U.S. Postal
Service.
City Council leaders in West Sacramento and Sacramento are moving
toward proposing ordinances that would block development of the
superstores.
Kristoff said that he was working on an ordinance blocking the
superstores when labor organizations asked him to do consulting
work.
The unions pay him $2,000 a month to talk with city planners,
business owners, environmental groups and elected officials about
the purported perils of superstores such as Wal-Mart Supercenter,
Kmart Super Center and SuperTarget stores.
The superstores sell groceries in addition to clothing,
housewares and sporting goods. Wal-Mart's low-price guarantee has
made it particularly successful at capturing market share from
traditional grocers.
Grocers provide higher wages and better benefits for workers than
Wal-Mart does, according to labor union leaders, who have largely
failed in attempts to organize Wal-Mart employees.
Ordinances like the one Kristoff has framed have surfaced in
several California cities trying to thwart plans by Wal-Mart Stores
Inc. to build megastores that range from 185,000 to 230,000 square
feet. But measures blocking this expansion have been challenged at
the ballot box and in court.
On Tuesday, voters in Contra Costa County overturned a ban on
superstores. Inglewood voters will decide the Wal-Mart question in a
special election on April 6. Lawsuits loom in Turlock and Alameda
County, where the nation's largest retailer has sued over ordinances
that would block the stores.
West Sacramento Councilman Mark Montemayor asked his peers in a
Jan. 15 letter to consider a proposed ordinance that would amend the
zoning code to prohibit new retailers that are larger than 130,000
square feet and that sell certain amounts of non-taxable grocery
items.
Dan Ramos, the project manager for Ranbo Riverpoint LLC, is
perplexed that such a proposal would even come up. He is developing
land that would be used for just such a megastore - 84 acres at Reed
Avenue and Interstate 80 in West Sacramento.
"Wal-Mart has contacted us, and they're interested in
negotiations on the site," Ramos said. "They've been talking to us,
and we had the signal from the city to go get them."
Montemayor said that his ordinance is not a change of heart on
the city's part but rather a clarification of the type of business
they want to attract.
"We've always wanted that parcel to be a major tax generator, and
foods are not taxed," he said.
Even though the labor union, through Kristoff, provided
Montemayor with the language in the proposal, he said, it is not a
labor issue but rather an economic development issue.
In Sacramento, Vice Mayor Sandy Sheedy is considering the idea of
proposing an anti-superstore ordinance to protect businesses that
have been in the city for years.
Supercenters complicate traffic, dominate urban settings and
destroy neighborhood shops, she said, and leave empty stores as they
expand.
Wal-Mart revitalizes areas when they move in, said company
spokeswoman Amy Hill.
"We have never closed a Supercenter anywhere in the country, and
we've been operating them since 1988," Hill said, adding that
Wal-Mart took over an empty store on Florin Road in the capital and
plans to open another in a vacant department store building at El
Camino and Watt.
Wal-Mart, based in Bentonville, Ark., has also closed some stores
locally, however. A Rocklin Wal-Mart along Five Star Boulevard
closed in 2002 when two new ones were built in Roseville. The
original store remains unoccupied. In Rancho Cordova, a Sam's Club
has stood empty since a new Wal-Mart was built in Citrus Heights.
The retailer has about 1,500 Supercenters, 1,500 regular Wal-Mart
stores and 500 Sam's Clubs nationwide. It plans 40 Supercenters in
California over the next four years, opening its first this week in
La Quinta.
[back to top]
Deptford [NJ] rejects Wal-Mart store - Planning board's 7-2 vote
baffles Mayor Bain
By GENE VERNACCHIO - Courier-Post Staff
[back to top]
Saturday, March 6, 2004
DEPTFORD The township planning board has rejected plans for a new Wal-Mart
Supercenter at the site of the former Deptwood Shopping Center.
Mayor Bill Bain said he was disappointed and confused by the
board's vote.
"The location is zoned for that and it meets the master plan
criteria," Bain said. "They didn't need anything from us."
Plans for the store, which would have operated 24 hours a day,
were rejected by a 7-2 vote. Bain and Township Manager Joseph
Picardi cast the only votes in favor of the store.
"I think we, as elected and appointed officials, have to look at
the overall picture of a town," Bain said. "We can't look at just
one little section of it.
"We could've made the traffic work," he said. "The job of traffic
control is on the township. The developer is only responsible for
egress through the property."
During earlier public hearings, residents said they were
concerned the store would increase traffic problems. Even Woodbury
Mayor Leslie Clark opposed the plans, saying the store likely would
create traffic congestion in her city.
Still, Bain said he was perplexed by the vote.
"We just changed our master plan to allow that to be built
there," Bain said. "I don't understand it.
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"This is a property that's been an eyesore," Bain said. "It was a
major shopping center since 1964 or 1965," Bain said. "I felt the
developer did everything the town asked him to do."
Attorney Barry Lozuke of Woodbury, who represented Wal-Mart
during the application, said he would not comment on whether the
retail giant would appeal the board's ruling.
Picardi said the denial has no bearing on an application for
another proposed Wal-Mart and a Sam's Club wholesale store at Route
41 and Clements Bridge Road at the former RCA Thomson site.
Picardi said the planning board is expected to consider that
application at 7 p.m. Wednesday.
Wal-Mart operates one store in Gloucester County in Turnersville,
which it plans to convert to its Supercenter format later this year.
The company also plans another store in Harrison at the intersection
of Routes 322 and 55. But Rowan University has been engaged in
negotiations for the site for an expansion of a planned western
campus.
[back to top]
Wal-Mart to Convene Board Meeting in China
www.chinaview.cn
[back to top]
March
4, 2004
SHENZHEN, March 4 (Xinhuanet)
-- The world's largest retailer Walmart announced here Thursday that it would hold its annual global
meeting of board of directors for the first time in the Chinese
mainland.
The meeting will be held in Shenzhen City in south China's
Guangdong Province. Walmart opened its first retail store in the
Chinese mainland in 1996.
Samuel Robson Walton, chairman of Walmart, said China has dual
importance to the US-based retailing giant, because China has
been for many years a major supplier of good quality goods and now is
a market with great potential.
The chairman said the board members should go to China in person
to have a good look at Walmart stores and the Chinese market.
Walmart has opened 35 outlets in 17 Chinese cities, including 30
supermarkets, three Sam's Clubs and two community stores, with a
total of 18,000 employees.
Walmart boasts its largest sales revenues among peer
companies, and it has more than 4,900 outlets all over the world.
The specific date of the board meeting is yet to be decided.
[back to top]
Wal-Mart needs to tell its side: analyst Shares rise on dividend
lift; analyst questions practices
By Jennifer Waters, CBS.MarketWatch.com
[back to top]
March 3, 2004
CHICAGO (CBS.MW) -- Even as Wal-Mart shares approached 23-month
highs Thursday, an analyst suggested that the stock is being curbed
by investor concerns about the company's sometimes controversial
business practices.
In fact, Credit Suisse First Boston analyst Michael Exstein said
that "an increasingly hostile public environment" could be holding
back the shares despite Wal-Mart's (WMT: news, chart, profile)
reasonably healthy sales and profit results in recent months.
The stock of the world's biggest retailer has risen 26 percent
over the last year, with shares higher by 72 cents to $60.27 in
midday trading Thursday. Meanwhile, shares of its nearest rival,
Target (TGT: news, chart, profile), have more than doubled that
pace, rocketing 57 percent to $43.38, off 20 cents.
The key measure of the sector, the S&P Retail Index ($RLX: news,
chart, profile), has also surged 57 percent in the past year.
Exstein pointed to a barrage of recent reports touching on issues
ranging from overtime pay to sex-discrimination suits against the
company to regulatory scrutiny of hiring practices after the roundup
illegal immigrants working on cleaning crews for the company.
Just this past weekend, two business-oriented newsmagazines
carried reports questioning Wal-Mart's employment and supplier
practices, noting that Wal-Mart shoppers benefit at the expense of
employees and vendors. A BusinessWeek viewpoint went as far as to
assert that "Wal-Mart gives globalism a bad name."
Wal-Mart has been mostly mute about the lawsuits and other
challenges it faces. In fact, the company didn't want to comment on
Exstein's report, according to a Wal-Mart spokeswoman.
But Exstein thinks it's time for Wal-Mart to speak up. "The
company needs to mount a more aggressive public relations strategy
in order to assuage concerns that it is potentially too big and far
reaching for its own good," he said in a note to clients.
'Pressure is mounting on the company to make substantive changes
to the way it does business.'
Analyst Michael Exstein
"Wal-Mart has done a poor job of telling its side of the big
story and in some cases has fanned the fires of unease with
stature," Exstein said.
Exstein sees the stock issue as dual-pronged: on one side sales
and earnings are rebounding through a combination of cyclical
improvements and better execution.
Indeed, Wal-Mart last month reported what it termed as
"excellent" fourth-quarter earnings that climbed 11 percent to $2.72
billion, or 63 cents a share. Total sales vaulted 12.2 percent to a
record $74.49 billion.
Late Wednesday, the company boosted its annual dividend a
whopping 44 percent to 52 cents a share, up from 36 cents a share
last year. While that's substantial, it remains a tad below a 1
percent yield.
Exstein said he thinks the stock has failed to reflect Wal-Mart's
performance because "pressure is mounting on the company to make
substantive changes to the way it does business."
He also warned of an "inflection point," saying such historical
moments have proved harmful to other corporate behemoths as their
"size and public opinion have conspired to force major operating
changes." Exstein cited Eastman Kodak (EK: news, chart, profile),
IBM (IBM: news, chart, profile) and Microsoft (MSFT: news, chart,
profile) as examples of companies that have had to cope with such
phases.
Though it's the world's largest company -- Wal-Mart raked in
$256.33 billion in sales last year -- Exstein said that it is not
infallible. "The corporate landscape is littered with companies that
have mistaken leading market share for dominant market share," he
said.
Unless the company comes forward and starts defending itself --
or, better yet, changes it practices -- Exstein said he fears
"Wal-Mart may become a victim of its past success."
Jennifer Waters is the Chicago bureau chief for
CBS.MarketWatch.com.
[back to top]
California tries to slam lid on big-boxed Wal-Mart
By John
Ritter, USA TODAY
[back to top]
March 2, 2004
BAY POINT: Calif. Wal-Mart's relentless rollout of new stores has
floundered in California like a beached whale. Two years ago, the world's biggest company announced
aggressive plans to build 40 of its trademark "supercenters" in this
lucrative market of 35 million consumers, the last untapped domestic prize for a global behemoth whose "always low prices" stretch
from China to Brazil.
But not a single supercenter has opened in California, and
Wal-Mart's (WMT) goal a new one every two months looks dubious.
Nearly everywhere it turns, the Bentonville, Ark., retailer finds
itself embroiled in lawsuits, politics and voter hostility toward
its profitable blend of groceries and discount merchandise.
On Tuesday, voters in Inglewood, San Marcos and here in Contra
Costa County will decide whether to prohibit "big-box" stores
epitomized by Wal-Mart supercenters. Los Angeles, San Diego, Salinas
and other cities are mulling similar bans. Lawsuits over
Wal-Mart are pending in Alameda County, Bakersfield and Turlock.
Across the USA, Wal-Mart faces backlash where it once found
welcome mats often with taxpayer-financed sweeteners to boot. From
Lawrence, Kan., to Sequim, Wash.; Milford, Ohio; Manatee County,
Fla.; Manor, Pa.; Stoughton, Wis.; Urbana, Ill.; and Florence, S.C.,
communities are questioning whether Wal-Mart's ultracompetitive
business practices critics call them cutthroat and predatory are in
their best interest.
"Ten years ago, fighting Wal-Mart was so unusual it was a
national story small town beats Goliath," says Al Norman, founder of
Sprawl-Busters, a Wal-Mart watchdog. "Today, these battles are
raging all over."
But last week, Fortune magazine crowned Wal-Mart No. 1 on its
annual list of the most admired companies for the second consecutive
year. "There's a reason Wal-Mart is the largest retailer in the
world," says George Whalin, a San Marcos retail consultant who
doesn't work for Wal-Mart. "Consumers want to buy things at lower
prices."
So why all the clashes? Supercenters were the catalyst, Norman
says. In the 1970s and 1980s, discount stores in Wal-Mart's initial
sweep through the South and Midwest were modest by today's standards
"40,000-50,000-square-foot little things," he says.
Not only are supercenters far grander 200,000 square feet or
about six football fields but they often leave vacant older
Wal-Marts behind. Norman counts 371 "dead" stores, up 39% since
1999.
"Communities are irritated that they're building stores right
down the street from older stores," he says. "And they're irritated
that they're getting the skeletal remains of the old stores."
California's lucrative market
In California, a volatile mix of circumstances makes the Wal-Mart
wars unique. To a growth-driven company that looks beyond
existing-store sales to satisfy Wall Street, the Golden State offers
huge potential. Because local governments get a share of California
sales taxes, elected officials are often eager for
revenue-generating big-box retailers.
But many cities and counties have tough growth controls or
grass-roots opposition. Gridlock on streets and highways fuels
resistance to big-box developments on the suburban fringe that
aggravate traffic and sprawl.
Politically potent unions see jobs threatened by supercenters
selling groceries and offering consumers low-priced, one-stop
shopping for most of their needs. Wal-Mart loomed large over the
4-month-old Southern California grocery strike, which ended Sunday
after becoming the longest in the state's history. Supermarket
chains, under intense pressure to stay competitive in an industry of skinny profit
margins, want workers to pay more of health benefits, but the union
resisted.
A study by the Bay Area Economic Forum, an organization of major
employers, found that Wal-Mart's annual wages and benefits were
$21,000 less per average worker than those of local supermarket
chains.
"It's fear of the unknown," says Wal-Mart spokeswoman Amy Hill.
"The food workers union is trying to scare people and create a myth
that supercenters come in and shut everybody else down. But in 44
other states, people see that's not the case."
Since its first supercenter opened in 1988, Wal-Mart has shot
from nowhere to America's grocery king, grabbing 21% of the market.
A study by market researcher Retail Forward predicts that Wal-Mart
grocery and drug sales will almost double to $162 billion by 2007,
boosting its market share to 35% and "leaving a path of destruction
in its wake" among competitors.
Wal-Mart's $256 billion in annual sales is at least $60 billion
more than the USA's No. 2 company, General Motors (GM). At its
current rate, Wal-Mart will open 1,000 supercenters in the next five
years.
Non-union, non-grocery discount chains such as Ames, Bradlee's
and Caldors folded under the Wal-Mart onslaught, but unionized
supermarkets are digging in. "This issue is much more contentious in
California, because there's a tradition of 'I'll see you in court'
or 'I'll see you at the ballot box,' " Norman says.
Wal-Mart fights back
Contra Costa, a suburban county of 1 million northeast of San
Francisco, is a bellwether battleground because its demographics
mirror the state's. In June, the Board of Supervisors voted to limit
stores that devote more than 5% of space to groceries to 90,000
square feet. That effectively barred supercenters without naming
Wal-Mart. Bulk-food sellers such as Costco were exempted.
"Unincorporated areas are where we want to protect open space,"
says Supervisor John Gioia. "Large developments don't generate
enough sales tax revenue to mitigate the negative impact."
Wal-Mart gathered enough signatures to put a referendum on
today's ballot and will spend more than $1 million on the vote,
although the company says it has no plans for supercenters in Contra
Costa. With $500,000 from Safeway and unions, opponents have knocked
on tens of thousands of doors with a plea to keep Wal-Mart from
big-footing in local politics.
"This is about the right to choose," says Dee Dee Ferro,
president of a Bay Point chapter of ACORN Association of Community
Organizations for Reform Now. "We've already decided to ban
supercenters. Just because Wal-Mart has money, they can come in and
take over our land-use decisions?"
Wal-Mart foes say supercenters wipe out competitors, especially
independently owned neighborhood mom-and-pop stores. "No way they
can compete with bargain-basement prices," Ferro says.
Wal-Mart's painful impact on local business is a rallying cry.
The company says new stores create jobs, while opponents contend
they're merely low-paying substitutes for jobs swept away by
Wal-Mart. Besides more traffic and pollution a supercenter adds
3,300 daily trips Wal-Mart kills supermarkets that anchor
neighborhood strip malls, hastening urban blight, critics say.
In 1997-2002, Wal-Mart blanketed Oklahoma City with seven
supercenters and seven of its "neighborhood markets" that mimic
stand-alone supermarkets. It added a Sam's Club warehouse store to
three already in the metro area. Result: 30 competing supermarkets
closed, according to Retail Forward. In Dallas over the same period,
Wal-Mart added 34 stores. Winn-Dixie abandoned all of its 15 stores.
Opponents conjure up the ruthless image of a powerful
multinational bent on squeezing workers and suppliers, dispensing
poverty-level wages and abusing Third World workers. "We're a
blue-collar, middle-class area and we'd rather not engage in the
race to the bottom," says Rep. George Miller, D-Calif., who
represents most of Contra Costa.
But to legions of fans, especially cost-conscious shoppers,
Wal-Mart's low prices and vast selection guard household budgets.
Wal-Mart's speed, efficiency and innovation undercut competitors who
foolishly go head-to-head on price instead of finding other niches,
retail experts say.
"They're not the evil empire," says retail consultant Whalin.
"They're formidable. They're tough. They're very good at what they
do. But we know retailers around the country Target's an example
that do quite well in the same marketplace."
Wal-Mart says in court papers that an Alameda County big-box
ordinance limiting groceries illegally targets the company. But
county officials say such bans also could cover Target or Sears
superstores that sell groceries, though neither has plans in
California.
"If they're trying to just stop all big box, write the ordinance
that says no store over a certain square feet can come in," says
Wal-Mart's Hill.
Wal-Mart is nothing if not adaptable. Last month, its first
smaller, 99,000-square-foot supercenter opened in Tampa. It's meant
for urban areas and to circumvent bans of more than 100,000 square
feet.
Search for low prices
Supercenter prohibitions arguably penalize low-income consumers.
A year ago, a Wal-Mart store became a long-sought anchor for a
fading regional mall in a south Los Angeles community torn by 1992
riots. Residents no longer had to depend on mom-and-pops or long
trips to find low prices, says John Mack, president of the Los
Angeles Urban League. The store provided more than 300 badly needed
jobs.
A city council proposal to ban big-box stores that sell groceries
is short-sighted, Mack says: "This can't be a cookie-cutter
approach. What may make sense in the overdeveloped San Fernando
Valley and west Los Angeles may not make sense in underdeveloped
south Los Angeles."
Studies in San Diego and Orange County predict a net economic
loss for California when Wal-Mart jobs replace union jobs. Wal-Mart
fired back with its own study by the Los Angeles County Economic
Development Corp., a coalition of groups promoting new business,
that found shoppers usually pay 20% less at supercenters than at
union supermarkets.
Surveys show that eight Americans in 10 have shopped at Wal-Mart.
"People say Wal-Mart put small business out of business. Actually,
they put big business like Montgomery Ward and Kmart out of
business," says Roger Blackwell, an Ohio State University marketing
professor. "It's little David beating up on Goliath, not the other
way around, because 30 years ago Wal-Mart was just a little independent
chain."
Blackwell's take on Wal-Mart bashing: "People who want to hang
onto the past fighting the innovations Wal-Mart brings to the
marketplace."
For all the bad press and battles over new stores, the fact is,
Wal-Mart usually wins.
Al Norman's Web site, www.sprawl-busters.com , lists nearly 200
communities that have "beaten big-box stores," mostly Wal-Marts,
since 1998. But over the same period, Wal-Mart has opened nearly 600
new stores and expanded more than 500 others.
And it doesn't always lose at the ballot box. In Calexico,
Calif., two years ago, more than 70% of voters defeated a proposed
supercenter ban. Clark County, Nev., supervisors passed a ban but
quickly rescinded it when Wal-Mart began collecting signatures in
metropolitan Las Vegas.
In Inglewood, a working-class, heavily minority city of 117,000
bordering Los Angeles International Airport, Wal-Mart twice had to
troll for signatures to try to overturn a supercenter ban. Today's
outcome could foreshadow bitter battles to come: Voters will be torn
between the needs of low-income residents and the union sympathies
of airport and port workers.
As Wal-Mart opens its first California supercenter this week in
La Quinta near Palm Springs, the votes could move the war to a new
phase. Wal-Mart may be vulnerable to lawsuits if it uses the ballot
box to skirt environmental and other local mandates.
Still, for every place that snubs Wal-Mart, plenty of others
embrace it. "We'd welcome a supercenter," says Terrence Grindall,
economic development manager in Manteca, a city of 60,000 near
Turlock, whose supercenter ban triggered a lawsuit. "We're
pro-business."
Wal-Mart stands out on rolls of PeachCare; Sign-up ratio far
exceeds other firms' Andy Miller - The Atlanta Journal-Constitution
February 27, 2004
A snapshot of Georgia's program for uninsured children shows that
it's packed with kids of Wal-Mart employees.
A state survey found 10,261 of the 166,000 children covered by
Georgia's PeachCare for Kids health insurance in September 2002 had
a parent working for Wal-Mart Stores.
That's about 14 times the number for next highest employer:
Publix, with 734.
Wal-Mart is the state's largest private employer. But when the
top four companies on the list are measured by number of PeachCare
children per the number of employees in Georgia, Wal-Mart still
dominates.
The survey findings surface as Wal-Mart's pay, benefits and
corporate policies have come under fire nationally. Labor unions and
other critics have denounced the Arkansas-based retail giant for
what they call low-wage, low-benefit jobs. And unions fear the
influence Wal-Mart practices could have on employee benefits in all
industries.
Georgia's PeachCare program was launched in 1998 to provide
health insurance to children whose parents cannot afford or don't
have access to those benefits. Wal-Mart said it does not encourage
employees to use states' insurance plans for children or Medicaid,
the federal-state program for the poor. "We offer affordable health
coverage to all of our associates, both full time and part time,"
said Dan Fogleman, a spokesman for the company.
But the number of PeachCare children whose parents work for
Wal-Mart struck a nerve with a local advocacy group for low-wage
women.
"Most employees who make $7 to $8 an hour can't afford health
insurance," said Cindia Cameron, organizing director of 9 to 5,
National Association of Working Women. "When a very wealthy employer
passes off to taxpayers what is rightfully a labor force cost,
that's a serious public policy problem."
The PeachCare employer listings appear in an internal Department
of Community Health memo and were not publicly released. But the
results recently surfaced in an AFL-CIO report about Wal-Mart
benefits and subsequent comments by union officials.
Community Health officials declined to comment Thursday on the
Wal-Mart figure and the survey in general, and said no employer
survey for PeachCare has been done since then.
Employers on the PeachCare list in Georgia's survey include other
retailers, carpet companies, hospitals, banks and federal agencies
such as the U.S. Postal Service.
A recent study released by the Commonwealth Fund, a research
foundation, found the percentage of uninsured workers in large
companies rose to 11 percent from 7 percent between 1987 and 2001.
And benefits are typically less generous in the retail sector,
primarily because of high worker turnover.
The ratio of Wal-Mart employees' children per company worker in
Georgia, though, greatly exceeds those of Publix and Shaw Industries
and Mohawk Industries, the Nos. 3 and 4 employers on the PeachCare
list.
42,000 workers in state
Wal-Mart, with 42,000 workers in the state in 2002, had about one
child in the health care program for every four employees. The ratio
for Publix was one child in PeachCare for every 22 employees. For
Shaw, it was one for every 30 employees, and for Mohawk, one for
every 26 workers.
PeachCare now insures 185,000 kids. Eligibility is based on
family income. State employees' children, though, are not eligible
because of federal rules.
The enrollment number is expected to shrink if the Georgia
General Assembly adopts proposed premium increases and rule changes.
The AFL-CIO said the number of Wal-Mart employees' children in
PeachCare reflects the company's low wages and the relatively high
price of its medical plan.
"You have a company increasingly shifting the cost of health care
to taxpayers," said Shaun O'Brien, assistant director of public
policy for the AFL-CIO. Many Wal-Mart employees, the union says,
earn wages of $7.50 to $8.50 an hour --- not enough to make benefits
affordable.
Wal-Mart, with 1.4 million U.S. workers, is the biggest private
employer in America; it now employs more than 46,000 workers in
Georgia. The company is not unionized.
About half of Wal-Mart's U.S. workers are covered under the
company medical plan, considered a low participation rate for large
companies. But Fogleman said the total of employees with health
insurance is 90 percent, because many get coverage through a spouse,
a parent or a government program such as Medicare. The Georgia
employees with PeachCare children, he said, could be part time or
even temporary help working during the holidays.
The company says 40 percent of employees in the company medical
plan have never had health coverage before coming to work for
Wal-Mart. "We catch a lot of people who fall through the cracks,"
Fogleman said.
An architect of the PeachCare program said he isn't surprised by
the number of Wal-Mart employees with children in PeachCare.
"A lot of Wal-Mart employees are part time," said state Rep.
Mickey Channell (D-Greensboro).
Twenty-five percent or fewer of Wal-Mart employees work part
time, the company said. They aren't eligible for family coverage and
aren't offered individual coverage until they work for the company
for two years. Full-time workers must wait three to six months for
coverage.
Many labor disputes
Wal-Mart's image has been rocked by recent labor controversies.
Last year a federal raid rounded up 250 illegal workers doing
janitorial work for Wal-Mart contractors. And the company also
confronts a large gender discrimination lawsuit charging that it
pays and promotes women less than men. Wal-Mart said it disputes the
allegations.
Health insurance and Wal-Mart are major themes in a strike by
grocery workers in Southern California. The grocers want to reduce
employee health benefits so the companies can compete with a coming
wave of 40 Wal-Mart Supercenter stores in the state.
The outcome of the conflict, unions say, could set the tone for
medical benefits in industries nationwide. The grocers and the union
reached a tentative agreement to end the strike Thursday night, but
settlement details were not available.
High deductible
Wal-Mart workers can buy individual coverage for as low as $15.25
every two weeks and family coverage for $66.25, Fogleman said. But
those options have a deductible of $1,000, meaning that care is paid
for by the employee until that ceiling is reached. Then Wal-Mart
covers 80 percent of further costs.
Wal-Mart says its average spending on medical benefits per
employee is $3,100 per year. That's less than the industry average
--- about $4,400 for large retailers --- as calculated by Mercer
Human Resource Consulting.
The AFL-CIO report describes Wal-Mart's health benefits plan as
overly restrictive.
In addition to lengthy waiting periods for coverage, the plan
doesn't cover such expenses as children's vaccinations, flu shots or
eye exams.
The company's health care plan is designed for catastrophic
coverage --- paying for very expensive medical care, Fogleman says.
The goal is to keep insurance affordable, he said. One favorable
benefit is that Wal-Mart has no cap on lifetime employee health care
spending, unlike other employers.
The retail industry typically offers less-generous benefits and
imposes longer exclusion periods than others, in part because of
high employee turnover, noted Werner Gliebe of Segal Co., an
employee benefits and human resources consulting firm.
Wal-Mart employees pay about one-third of their health care
premiums. That's typical of retailers and exceeds the 20 percent
paid by an average Fortune 500 company worker, said Gliebe.
"You have a double whammy: People who are lower-paid having to
contribute one-third of the cost," Gliebe said. Typically, as a
result, fewer employees of retail companies enroll in their benefits
plan, he added.
GRAPHIC: Graphic: WHO USES PEACHCARE
Employers with 300 or more children in PeachCare in September
2002:
PeachCare ...............children
Self-employed............12,789
Wal-Mart...................10,261
Publix............................734
Shaw Industries..............669
Mohawk Industries...........657
Cagle's Keystone Foods.....463
McDonald's.....................454
Home
Depot....................421
Kroger...........................377
U.S.
post office...............354
Construction...................328
Sears............................325
Randstad
Staffing............305
Grady Healthcare.............300
Source: Department of Community Health. The figures are
self-reported information from PeachCare applications.; Graphic:
PEACHCARE FOR KIDS
* What it is: A health care program for uninsured children in
Georgia, part of a national initiative begun in the Clinton
administration.
* Eligibility: Available to children up to age 18 whose families
meet income criteria based on federal poverty guidelines. For a
family of four, $43,260 a year is the family income limit. State
employees' children aren't eligible.
* Member costs: Premiums are required for children ages 6 and
older. The cost per child per month is $10. Families with two or
more children pay $20 for all children. Georgia is considering
raising those premiums.
[back to top]
Trial Ordered In Wal-Mart Case
By Rob Moritz - Arkansas News
Bureau
[back to top]
February 27, 2004
LITTLE ROCK A woman who filed a lawsuit against Wal-Mart after
she slipped and fell on a recently mopped floor in a Paragould store
deserves a trial, the Arkansas Court of Appeals decided.
The ruling reverses a circuit court judge's decision to grant the
Bentonville-based retailer summary judgment in the case. The judge
ruled that the cleaning crew that left the water on the floor was an
independent contractor for Wal-Mart.
In Wednesday's unanimous decision, the Court of Appeals disagreed
and ordered a trial.
Stacy Wineland was in the Paragould Wal-Mart store on March 18,
2001, when she slipped after stepping on a wet floor that had just
been mopped by a crew with United Janitorial Services, Inc.
Wal-Mart argued that the floor was left wet by the cleaning crew,
an independent contractor, so the store should not be held liable.
Green County Circuit Court Judge David Burnett agreed with
Wal-Mart's argument and granted summary judgment to Wal-Mart.
In her appeal, Wineland argued Burnett erred because "there were
genuine issues of material fact" regarding the cleaning crew's
relationship with the store. She said material fact remained as to
whether UJS had a "master-servant relationship with Wal-Mart." An
employer is liable if such a relationship exists, she argued.
She also said Wal-Mart was negligent in failing to supervise the
cleaning crew and that the store was negligent in violating health
and safety regulations.
Court of Appeals Chief Judge John Stroud wrote that questions
about the crew's relationship with Wal-Mart should have been
answered before the summary judgment was issued.
[back to top]
Wal-Mart stands out on rolls of PeachCare Retailer's
sign-up
ratio far exceeds other firms'
By ANDY MILLER - The Atlanta Journal-Constitution
[back to top]
Published on:
02/27/04
A snapshot of Georgia's program for uninsured children shows that
it's packed with kids of Wal-Mart employees.
A state survey found 10,261 of the 166,000 children covered by
Georgia's PeachCare for Kids health insurance in September 2002 had
a parent working for Wal-Mart Stores.
That's about 14 times the number for next highest employer:
Publix, with 734.
Wal-Mart is the state's largest private employer. But when the
top four companies on the list are measured by number of PeachCare
children per the number of employees in Georgia, Wal-Mart still
dominates.
The survey findings surface as Wal-Mart's pay, benefits and
corporate policies have come under fire nationally. Labor unions and
other critics have denounced the Arkansas-based retail giant for
what they call low-wage, low-benefit jobs. And unions fear the
influence Wal-Mart practices could have on employee benefits in all
industries.
Georgia's PeachCare program was launched in 1998 to provide
health insurance to children whose parents cannot afford or don't
have access to those benefits. Wal-Mart said it does not encourage
employees to use states' insurance plans for children or Medicaid,
the federal-state program for the poor. "We offer affordable health
coverage to all of our associates, both full time and part time,"
said Dan Fogleman, a spokesman for the company.
But the number of PeachCare children whose parents work for
Wal-Mart struck a nerve with a local advocacy group for low-wage
women.
"Most employees who make $7 to $8 an hour can't afford health
insurance," said Cindia Cameron, organizing director of 9 to 5,
National Association of Working Women. "When a very wealthy employer
passes off to taxpayers what is rightfully a labor force cost,
that's a serious public policy problem."
The PeachCare employer listings appear in an internal Department
of Community Health memo and were not publicly released. But the
results recently surfaced in an AFL-CIO report about Wal-Mart
benefits and subsequent comments by union officials.
Community Health officials declined to comment Thursday on the
Wal-Mart figure and the survey in general, and said no employer
survey for PeachCare has been done since then.
Employers on the PeachCare list in Georgia's survey include other
retailers, carpet companies, hospitals, banks and federal agencies
such as the U.S. Postal Service.
A recent study released by the Commonwealth Fund, a research
foundation, found the percentage of uninsured workers in large
companies rose to 11 percent from 7 percent between 1987 and 2001.
And benefits are typically less generous in the retail sector,
primarily because of high worker turnover.
The ratio of Wal-Mart employees' children per company worker in
Georgia, though, greatly exceeds those of Publix and Shaw Industries
and Mohawk Industries, the Nos. 3 and 4 employers on the PeachCare
list.
42,000 workers in state
Wal-Mart, with 42,000 workers in the state in 2002, had about one
child in the health care program for every four employees. The ratio
for Publix was one child in PeachCare for every 22 employees. For
Shaw, it was one for every 30 employees, and for Mohawk, one for
every 26 workers.
PeachCare now insures 185,000 kids. Eligibility is based on
family income. State employees' children, though, are not eligible
because of federal rules.
The enrollment number is expected to shrink if the Georgia
General Assembly adopts proposed premium increases and rule changes.
The AFL-CIO said the number of Wal-Mart employees' children in
PeachCare reflects the company's low wages and the relatively high
price of its medical plan.
"You have a company increasingly shifting the cost of health care
to taxpayers," said Shaun O'Brien, assistant director of public
policy for the AFL-CIO. Many Wal-Mart employees, the union says,
earn wages of $7.50 to $8.50 an hour not enough to make benefits
affordable.
Wal-Mart, with 1.4 million U.S. workers, is the biggest private
employer in America; it now employs more than 46,000 workers in
Georgia. The company is not unionized.
About half of Wal-Mart's U.S. workers are covered under the
company medical plan, considered a low participation rate for large
companies. But Fogleman said the total of employees with health
insurance is 90 percent, because many get coverage through a spouse,
a parent or a government program such as Medicare. The Georgia
employees with PeachCare children, he said, could be part time or
even temporary help working during the holidays.
The company says 40 percent of employees in the company medical
plan have never had health coverage before coming to work for
Wal-Mart. "We catch a lot of people who fall through the cracks,"
Fogleman said.
An architect of the PeachCare program said he isn't surprised by
the number of Wal-Mart employees with children in PeachCare.
"A lot of Wal-Mart employees are part time," said state Rep.
Mickey Channell (D-Greensboro).
Twenty-five percent or fewer of Wal-Mart employees work part
time, the company said. They aren't eligible for family coverage and
aren't offered individual
coverage until they work for the company for two years. Full-time
workers must wait three to six months for coverage.
Many labor disputes
Wal-Mart's image has been rocked by recent labor controversies.
Last year a federal raid rounded up 250 illegal workers doing
janitorial work for Wal-Mart contractors. And the company also
confronts a large gender \discrimination lawsuit charging that it pays and promotes women
less than men. Wal-Mart said it disputes the allegations.
Health insurance and Wal-Mart are major themes in a strike by
grocery workers in Southern California. The grocers want to reduce
employee health benefits so the companies can compete with a coming wave of 40 Wal-Mart
Supercenter stores in the state.
The outcome of the conflict, unions say, could set the tone for
medical benefits in industries nationwide. The grocers and the union
reached a tentative agreement to end the strike Thursday night, but settlement
details were not available.
High deductible
Wal-Mart workers can buy individual coverage for as low as $15.25
every two weeks and family coverage for $66.25, Fogleman said. But
those options have a deductible of $1,000, meaning that care is paid
for by the employee until that ceiling is reached. Then Wal-Mart
covers 80 percent of further costs.
Wal-Mart says its average spending on medical benefits per
employee is $3,100 per year. That's less than the industry average
-- about $4,400 for large retailers -- as calculated by Mercer Human Resource
Consulting.
The AFL-CIO report describes Wal-Mart's health benefits plan as
overly restrictive.
In addition to lengthy waiting periods for coverage, the plan
doesn't cover such expenses as children's vaccinations, flu shots or
eye exams.
The company's health care plan is designed for catastrophic
coverage — paying for very expensive medical care, Fogleman
says.
The goal is to keep insurance affordable, he said. One favorable
benefit is that Wal-Mart has no cap on lifetime employee health care
spending, unlike other employers.
The retail industry typically offers less-generous benefits and
imposes longer exclusion periods than others, in part because of
high employee turnover, noted Werner Gliebe of Segal Co., an employee benefits and human
resources consulting firm.
Wal-Mart employees pay about one-third of their health care
premiums. That's typical of retailers and exceeds the 20 percent
paid by an average Fortune 500 company worker, said Gliebe.
"You have a double whammy: People who are lower-paid having to
contribute one-third of the cost," Gliebe said. Typically, as a
result, fewer employees of retail companies enroll in their benefits
plan, he added.
[back to top]
Working: Wal-Mart practices lead race to bottom
By Mary Conroy -
Madison Capital Times
[back to top]
February 25, 2004
The first time I shopped at Wal-Mart I did so for its prices and
return policies. Tampax cost at least a dollar less there than
anywhere else, so every few months, I'd stock up. Once in a while,
I'd get lured by some other Wal-Mart items and buy them.
During that time, I was ignorant. It didn't occur to me to
question how Wal-Mart could affect employees, other businesses and
world trade.
But I'm better informed now. I cut up my Sam's card and haven't
been inside a Wal-Mart in years. And recently, a report from Rep.
George Miller, D-Calif., of the House Committee on Education and the
Workforce reinforced my decision to steer clear of it. The report
summarizes Wal-Mart's practices in areas ranging from unfair wages
to unaffordable health care. It also takes our government to task
for allowing Wal-Mart to hurt workers, other retailers and our
economy.
Consider Wal-Mart's union-busting tactics. When a small
meatcutting department organized a union at a Texas Wal-Mart in
2000, the company eliminated its meatcutting operations a week
later. Instead of complying with a 2003 court order to bargain with
the meatcutters, Wal-Mart is appealing the decision. Wal-Mart's
other labor law violations range from intimidating workers to firing
those who try to organize unions.
Super Wal-Marts threaten the standard of living for grocery
employees. While the average supermarket worker makes $10.35 an
hour, those at Wal-Mart average $8.32 an hour, and only get paid for
32 hours a week. Do the math: those Wal-Mart workers make less than
$1,000 a month.
Not only do they get low wages, but they have a hard time getting
benefits. That's partly because in 2002, Wal-Mart changed its
definition of "part-time" work from 28 to 34 hours per week.
Part-time employees aren't eligible for health insurance until
they've worked at Wal-Mart for two years. Even then, they can't buy
coverage for their families.
Even full-time employees find Wal-Mart's health plan a burden.
For 2001, workers there paid 42 percent of their health insurance.
With high deductibles and co-payments, a single worker could spend
$6,400 out-of-pocket before getting any benefits. That's nearly half
the worker's full-time salary.
What does this mean? It means that many Wal-Mart employees have
to go on public assistance. It means that Wal-Mart is forcing us
taxpayers to foot the bill for health benefits its workers deserve.
According to Bill Moyers of PBS, Wal-Mart's personnel offices
encourage employees to use charity and public assistance.
To be competitive with Wal-Mart, which pays so little in health
benefits, other employers feel they have to shift the cost of health
insurance to their employees. Right now some 70,000 unionized
California grocery employees are either on strike or locked out
because they refuse to agree to higher health care costs prompted,
their bosses say, by Wal-Mart's competition.
A University of California study predicted that if grocers offer
fewer benefits and ask employees to pay more, other employers will
follow suit. Thus, Wal-Mart has "sparked a new race to the bottom,"
Rep. Miller's report says. Such moves may bring an end to
employer-based health insurance programs.
Is Wal-Mart doing this because it's hurting? Absolutely not. In
2002, company profits reached $6.6 billion. While profits are up and
Wal-Mart is building new stores in small towns that once had healthy
downtowns, its employees share none of this economic boom.
Wal-Mart could learn a lesson from Henry Ford. Back when he began
his assembly-line factories, he realized one basic principle: if he
wanted America to buy his automobiles, his own workers had to be
part of that America. Therefore, he paid his employees enough so
that they could afford to buy the cars they made.
"Everyday low prices" may eventually mean everyday low salaries
and benefits for you and your family. In the case of Wal-Mart, both
individuals and communities get what they pay for.
Mary Conroy is a Madison-based free-lance writer.
[back to top]
A better way to control growth
Greg Feere, Tim Frank - San
Francisco Chronicle
[back to top]
Wednesday, February 25, 2004
Measure L, the referendum on a Contra Costa County ordinance that
would ban from unincorporated areas any nonmembership
"super-centers," will help protect the last remaining open space in
unincorporated areas of the county. It will also help slow the
worsening of traffic congestion and water and air pollution.
The Sierra Club and the Contra Costa Building Trades Council have
joined a groundswell of community groups in making this issue a
priority because the high quality of life that helps make Contra
Costa County competitive is at risk.
The motivation for our partnership is simple. First, there is a
growing body of evidence from all around the country that growth
management policies that stop urban sprawl lead to stronger economic
performance and job creation. A recent study commissioned by Good
Jobs First examined 155 metropolitan areas and found that those that
had adopted growth-management policies had construction activity per
new resident that yielded about $100,000 more over a 10-year period
compared with those that opted for the business-as-usual approach.
(See "The Jobs are Back in Town" report at www.GoodJobsFirst.org.)
Measure L won't just help to protect local jobs, but it will also
protect family-owned businesses and the environment. Specifically,
it would prohibit the construction of new super-centers on one of
the last unprotected landscapes of the county. Super-centers are
typically the size of several football fields and consume huge
amounts of open space. The fact that these big-box retail stores are
usually sited on the outskirts of town means longer commutes to buy
groceries, adding to increased traffic and air pollution. Moreover,
the number of long trips is significant. A study by the Institute of
Traffic Engineers found that super-centers that sell groceries
generate more than 4,000 additional car trips per day than an
average supermarket.
What's more, the consolidation of retail into ever-larger
super-stores is a huge threat to livable communities. Wal-Mart sells
some groceries at a loss in order to draw customers to the store,
then generates profits on the rest of the merchandise. Neighborhood
grocery stores can't compete with this model -- and for every
super-center that opens, two neighborhood supermarkets close,
according to Retail Forward, a market research firm in Columbus,
Ohio. Since most neighborhood shopping centers are anchored by
supermarkets, if the supermarket closes, neighboring businesses
suffer and some may even go out of business. The community is left
with a vacant shopping center, creating blight and driving down
property values.
For these reasons, Contra Costa County Measure L would protect
local families and businesses by prohibiting big-box stores that
generate more than 5 percent of their total sales from nontaxable
items such as groceries. The Contra Costa Board of Supervisors
originally passed the ordinance behind Measure L, because it saw the
importance of creating smarter growth plans within our communities.
Wal-Mart, however, wanted to overturn what local elected officials
saw as being best for Contra Costa County, and the company has now
spent more than $1 million on the effort to defeat the measure.
Measure L is about protecting our environment and family-owned
businesses -- but it's also about local control to decide how and
where we grow. The future of our communities shouldn't be dictated
by corporate executives in Arkansas. There is a better way: A "yes"
vote for Measure L is a vote for communities being able to plan
their own future.
Greg Feere is CEO of the Contra Costa Building and Construction
Trades Council. Tim Frank is senior policy adviser for the Sierra
Club Challenge to Sprawl Campaign (www.sierraclub.org/sprawl).
[back to top]
Workers' Rights Are Being Rolled Back
By Steven Pearlstein -
Washington Post [back to top]
Wednesday, February 25, 2004
While the Bush administration is gung-ho for democracy in Iraq
and Zimbabwe, there is one place it wants to be sure it never sees
the light of day: the American workplace.
I am talking here about a right that most Americans thought they
won back in 1935 -- the right to form unions and bargain
collectively. Over the years, that right has been whittled away by
legislation, poked with holes by appeals courts and reduced to
irrelevancy by a well-meaning bureaucracy that has let itself be
intimidated by political and legal thuggery. As a result, any
company willing to use intimidation and delaying tactics will never
have to sign a first contract with a union, even if employees really
want one.
That, certainly, is what anyone would conclude after reviewing
the record of the nation's largest employer, Wal-Mart Stores Inc.
Its file at the National Labor Relations Board includes roughly 250
cases that have gone through the board's arcane process since 1995.
And yet, despite ample evidence of Wal-Mart's proclivity to engage
in what look to be unfair labor practices directed by executives at
corporate headquarters, the NLRB has yet to systematically interview
them or look through their files.
Wal-Mart's tactics are right out of the union-busting handbook:
give psychological tests to screen out job applicants who are likely
union recruits; fly in SWAT teams from headquarters at the first
sign of organizing; find some lame excuse to fire workers who openly
declare their union sympathy; tell employees they could lose their
benefits if a union comes in; set up surveillance teams outside the
store to record which employees chat with union organizers; and, if
necessary, offer improved pay and working conditions on the eve of
votes. These aren't just allegations -- they are findings of fact by
the NLRB's own administrative law judges.
And what has happened when Wal-Mart loses one of these individual
store cases? Typically it has offered to rehire, with back pay, the
$8-an-hour clerk who brought the complaint and has long since gone
on to another job; posted a notice at the store's water cooler
promising not to do bad things again; and, in rare instances,
scheduled a new vote at a store that has since been packed with
company flunkies.
Given these toothless remedies, it's no surprise that only seven
groups of Wal-Mart employees have ever gotten to vote on having a
union, with only one of those -- 10 butchers at a store in
Jacksonville, Fla. -- actually voting in favor. And gosh, wouldn't
you know that just weeks later, Wal-Mart decided to eliminate the
meat-cutting function at the Jacksonville store and ship in pre-cut
meat instead. Although the company explained the change had been
under consideration for six months at least, Leonard Page, then the
acting general counsel of the NLRB, told me Wal-Mart couldn't
produce even a single document to prove it.
Some months after the Jacksonville incident, Page decided it was
time to get serious with Wal-Mart, and set up an appointment with
top executives at their offices in Bentonville, Ark. But the day
before his trip, he got a call from the White House thanking him for
services and instructing him to clear out his desk even though no
replacement had been named.
Page's successor, Arthur F. Rosenfeld, is a former management
lawyer and Republican aide on Capitol Hill of no particular
distinction other than his management sympathies. Rosenfeld gives no
interviews, posts no speeches on his agency's Web site and sends out
civil servants to answer written questions about Wal-Mart,
explaining there simply isn't enough evidence of a "pattern of
unlawful conduct at multiple locations" to justify an investigation
of Wal-Mart's corporate-wide labor practices.
I don't know if most Wal-Mart "associates" would -- or even
should -- vote in a union. What I do know is that with gutless
regulators like Rosenfeld in charge, they won't even get a chance to
decide. What the Wal-Mart case signals to every employer and worker
in America is that the right to form a union is now a cruel joke and
an empty promise.
[back to top]
General delivery; Retired Marine Jarvis Lynch Jr. directs
battle
against Wal-Mart
NICK MASON - The Bradenton Herald
[back to top]
24 February 2004
'We did our best to stay on the offensive constantly' Jarvis
Lynch Jr. believed the nearly 18 months of work by his neighborhood
group opposing plans for a Wal-Mart SuperCenter would be rewarded.
He was confident when he walked into the Manatee Convention and
Civic Center last month that Manatee County commissioners would
reject the project.
"The night before, I asked my wife about the vote," Lynch said.
"She said, 'Let's make a bet on it.' She said 7-0. I said 'No bet.'
That's what I thought it was going to be." Lynch and his wife, Pauline, were right.
"I was confident, but you just never know for sure," he said.
"There can always be a surprise of some sort, although I couldn't
begin to tell you what it might have been."
Lynch is president of Safe and Economically Viable Neighborhoods
Inc. (SAEVN), a nonprofit organization University Park residents
formed specifically to challenge the proposal for the
224,000-square-foot store and accompanying garden center at
University Parkway and Honore Avenue.
The retired U.S. Marine Corps major general commanded his
volunteer troops through the trenches of the county government's
land-use bureaucracy with the precision of a unit advancing in a
military campaign.
"There are certain military principles of war, and we adhered to
some of them," Lynch said.
"The objective was to have the board of county commissioners deny
the Wal-Mart application, and everything we did needed to relate
directly to that objective," he said matter-of-factly. "The other
principle was taking the offensive. We did our best to stay on the
offensive constantly."
Lynch and the SAEVN core group of about a dozen leaders decided
to pay for a professional analysis of vehicle traffic impacts the
proposed SuperCenter would cause instead of waiting for the
developer's study to be submitted to county planners.
"Severe traffic problems was a major concern," he said. "So we
funded a traffic study and then stayed on the attack and funded an
addendum. We weren't waiting for someone else to perform one; we had
it done."
Effort saluted Lynch was a Marine for 35 years and had major
tours of duty in Okinawa, Vietnam, Hawaii, Norway, Quantico, Va.,
and Parris Island, S.C. He retired as major general responsible for
recruit training of all male Marines recruited east of the
Mississippi River and all female recruits throughout the nation,
almost 20,000 recruits per year.
The detailed preparation and methodical execution of the campaign
by Lynch and SAEVN against Wal-Mart drew a salute from Clint Miller,
chairman of the East Manatee County Coalition citizens group.
"I think Jarvis did an absolutely outstanding job of marshaling
his troops behind him in combating the situation," Miller said.
"One of the things that I was impressed with is that they had
experts of various disciplines standing by to combat any arguments
presented by the county Planning Department or the applicant during
the public hearing," Miller said. "To me, that represents excellent
leadership and commitment."
"Jarvis was the perfect guy for this job," said Patricia Petruff,
a Bradenton attorney SAEVN hired. "He held his people together, and
his organizational skills helped focus their efforts."
Ed Vogler, Wal-Mart's attorney during the hearings, declined to
talk about about Lynch or SAEVN.
Lynch was appointed to lead the fight against Wal-Mart by Bill
Gruenwald, a member of the University Park Community Association
Inc. board of directors and chairman of the Chair Council
representing the 27 neighborhoods that comprise the University Park
subdivision.
"I hadn't really known Jarvis personally, but I heard about him
from friends and neighbors," Gruenwald said. "We went to lunch and I
asked if he would take it on, and he agreed.
"The first question he asked was, 'What's the chain of command?'
Gruenwald recalled of that afternoon in 2002 at the University Park
Grille & Cafe. "I told him that he was General Grant and I was Abe
Lincoln. He laughed."
Lynch had not been active in any community or political causes
since moving from Pensacola to University Park in 1994, but he dove
into his assignment with dedication.
"I learned a great deal about the county Planning Department,
about county government, the comprehensive plan and the land
development code," he said.
Battle plans SAEVN was created and Lynch and the core group began
compiling information about the Wal-Mart proposal, the history of
development approval for the site, the county's development rules
and reaching out to residents of other neighborhoods for support.
"It began in University Park, but as time went on we had support
from University Place, The Meadows, Longwood Run, Lakewood Ranch and
Mote Ranch," he said. "The center of gravity for SAEVN is University
Park, but we had supporters from other Manatee County and Sarasota
communities."
The core group of leaders met each Friday at Lynch's dining room
table, which was dubbed the "war room."
"You wouldn't believe it if I told you," Lynch said when asked
how much time he spent battling Wal-Mart. "I'd say, on average, six
hours a day, including weekends."
The effort climaxed with the all-day hearing Jan. 22 at the civic
center attended by about 500 people, most in SAEVN's corner, and the
commission's unanimous vote of denial.
"Ecstatic," Lynch said of the feeling the moment the
commissioners voted. "Glad it was over with, at least for now."
Lynch is not sure what to expect next from Wal-Mart. The company
might sue commissioners or submit a revised plan, triggering a
second round of review and hearings. He is ready for more action.
"Oh, yeah," he said. "It's our primary order of business."
Lynch said he and University Park residents intend to stay active
in politics. "I've learned that within University Park there are some
extraordinarily talented people with considerable experience and a
willingness to work for the common good," Lynch said.
Gruenwald said the SAEVN effort Lynch led is a beginning that
will flourish and mature. "I think he established relationships outside the community that
will be invaluable," Gruenwald said. "For example, we are part of
the East Manatee County Coalition.
"Jarvis and I have discussed what we do post-SAEVN," Gruenwald
said. "We've established that we will have a committee for all
external matters, including our government at the local and state
levels. We want to understand what is going on and influence what is
going on. SAEVN has given us a tremendous jump forward in that
regard."
AGE: 71 LOCAL RESIDENCE: University Park OCCUPATION: Retired in
1991 as major general, United States Marine Corps BIRTHPLACE:
Glassboro, N.J. FAMILY: Wife, Pauline, four grown children and three
grandchildren
Nick Mason, county government reporter, can be reached at
745-7081 or at nmason@bradentonherald.com.
[back to top]
Wal-Mart the largest corporate donor in US election
By Edward
Alden and Neil Buckley - FINANCIAL TIMES [back to top]
February 24, 2004
Wal-Mart, the largest company in the US, looks set to pass a new
milestone this year: it is well on its way to becoming the biggest
business contributor to the 2004 election campaign.
After years of little involvement in federal politics, the
Arkansas-based retail giant is currently the largest corporate donor
through its political action committee (PAC), having doled out
nearly $1.3m to federal candidates until the end of January,
according to Politicalmoneyline.com.
Wal-Mart's effort to beef up its presence in Washington is
unparalleled since Microsoft - another upstart from the US
hinterland - in the mid-1990s abandoned Bill Gates' boast that he
was from "the other Washington" and hired an army of lobbyists to
defend itself against a series of antitrust investigations.
Sam Walton, the founder of Wal-Mart, had a similar disdain for
Washington politics. As recently as the 2000 presidential election
year, Wal-Mart ranked 771st in direct contributions to federal
politicians.
But the company finds itself in the middle of a growing number of
disputes that is forcing it to pay more attention to the ways of
Washington. "As Microsoft found out the hard way, when you reach a
certain size you have to pay attention to what's going on in
Washington or it really bites you," says Erik Autor, vice-president
of international trade for the National Retail Federation, a
national lobbying group that does not include Wal-Mart.
The company is facing dozens of lawsuits over its employment
practices, as well as challenges from local governments that have
tried to block its expansion as a way to protect smaller retailers.
Trade unions that have watched well-paying grocery jobs disappear to
non-unionised Wal-Mart stores have launched a series of attacks
against the company. And with trade emerging as a hot election year
topic, Wal-Mart would be the biggest single loser from any
restrictions on imports, particularly from China.
In late 1999, Senate majority leader Trent Lott, then-Arkansas
congressman Jay Dickey and others sat down with the company's
management in Bentonville and warned that they needed to find a way
to play the Washington game. "We told them they should become a
participant in the process before the crises hit," says Mr Dickey,
who lost his bid for re-election in 2002.
The company rejects the Microsoft analogy and prefers to put a
more positive spin on its political contributions. Jay Allen, senior
vice-president of corporate affairs for Wal-Mart and treasurer for
the company's PAC, says he began discussing with senior management
five or six years ago the need for the retail giant to wield greater
clout in Washington. "It was not like there was one company or event
or issue [that influenced us]," he says, "It became increasingly
clear that we needed a presence there, to engage on legislative
issues that arise in Washington - like taxes, health care, trade,
food safety.
"The second issue was a need that frankly still exists today,
with everything that is going on, for people to understand us
better," he adds. "When you are not there it creates a void that
someone else is going to fill, and you may not like their definition
of you."
"They're doing a lot of this stuff to protect their reputation,"
agrees Michael Wilson, chief lobbyist for the United Food and
Commercial Workers' union, which has fought bitterly to block
Wal-Mart's expanding grocery business.
Since Mr Allen launched the effort, the company has assembled an
impressive rank of lobbyists, including Patton, Boggs and Blow, the
powerhouse Washington lobbying firm. It has weighed in to support a
prescription drug benefit for Medicare (to help its pharmacy
business), lobbied to restrict the ability of unions to organise in
its stores, and helped lead a business coalition pressing for
reduced taxes on offshore operations.
Wal-Mart's political contributions have been spread widely in
Congress, with more than 220 members of the House and Senate
receiving cheques of $1,000 to $17,500 so far this election cycle.
About 85 per cent of the money has gone to Republicans.
Ray Bracy, Wal-Mart's vice president of international corporate
affairs, says that until recent years its biggest issues had been at
the local level. "But more and more as we have become big, and
perhaps the target of criticism for many, we recognised that the
local problems were still there, but there also were looming large
national issues."
One such issue is trade. No company would be hurt more than
Wal-Mart by a backlash against trade, particularly efforts to curb
imports from China. The company imports about $15bn in goods
annually from China alone.
In retrospect, Mr Bracy says, Wal-Mart's absence from the
negotiations on China's accession to the World Trade Organisation in
the late 1990s was "a miss". The WTO agreement, for example, says a
retailer cannot own more than 30 stores in China without getting
government approval. "If we had been present at the table, we could
have said: 'where does 30 come from?'" says Mr Bracy. "We have 31
stores in Houston alone."
Despite its generous political contributions, however, Wal-Mart's
lobbying style still reflects its corporate obsession with keeping
costs as low as possible. Its Washington office, opened four years
ago, only employs five full-time lobbyists, a fraction of comparably
sized companies such as General Electric. And the company is facing
a series of disputes with state-level retail lobbying associations
over its demand for cut-rate membership fees. "What they normally do
is send you what they think they can get away with," says Chris
Tackett, president of the Wisconsin Merchants Federation.
[back to top]
Our view: Wrong place for a Wal-Mart....
By: North County Times -
Editorial [back to top]
February 23, 2004
Proposition G would rezone roughly 20 acres in south San Marcos
from residential to commercial use to allow construction of the
city's second Wal-Mart, a 139,000 square-foot store in the
University Commons development at Rancho Santa Fe Road and Melrose
Drive. An accompanying measure, Proposition F, would make other
minor adjustments to zoning in the area, but Prop. G is the main
issue.
The proposal has sparked a bitter campaign in the city, with
opponents excoriating Wal-Mart as a low-wage, low-benefit corporate
behemoth and proponents praising it for its low prices and the 300
jobs the company promises to bring to San Marcos. If you feel
strongly about Wal-Mart one way or the other, by all means vote
accordingly. But we think Wal-Mart is not the main issue. The issue
is that residential land should not be rezoned for commercial use.
North County has a housing shortage, not a commercial and retail
shortage. Those 20 acres are zoned for multifamily housing. There's
other land in San Marcos zoned for big stores like Wal-Mart. That's
where a new Wal-Mart should go.
Traffic on the already gridlocked roads at that corner is another
issue. The two sides have presented conflicting interpretation of
traffic studies. Opponents say the store would bring another 10,000
cars a day to the area that's a daily headache as it is. Proponents
say most of those 10,000 cars are on the streets already; a Wal-Mart
would simply cause them to stop off on a trip they would have made
anyway.
We think it's almost certain that a Wal-Mart would make traffic
worse. As a benchmark, city-planning textbooks estimate that a new
home generates an average of 10 vehicle trips a day. So 300 homes on
the site would generate 3,000 daily vehicle trips. Even proponents
of the Wal-Mart concede the store would generate 4,400 trips a day.
But in the interest of argument let's call the traffic volume a
wash. And let's say that whether to welcome a new Wal-Mart to San
Marcos or wail about it is a matter of taste. Low wages or low
prices? New jobs or low-paying jobs? Without taking a side on either
issue, we still think this is the wrong place for a new Wal-Mart.
The 20 acres in question is zoned for 300 units of single-family
and multifamily residential housing. That's exactly the kind of
housing that San Marcos and North County need ---- denser
development close to jobs to keep new residents off our already
overburdened freeways. And University Commons is right next to an
industrial park. We're with the neighbors on this one. We vote no on
Proposition G.
Vote NO on G and Wal-Mart!
[back to top]
Faced with opposition, Wal-Mart can play hard ball
By Greg Kane - Lodi News-Sentinel Business Editor
[back to top]
February 23,
2004
When late Wal-Mart founder Sam Walton's autobiography was
published following his death in 1992, millions of readers were
exposed to a quote that would be held up for years by the retail
giant's most vehement critics.
"If some community, for whatever reason, doesn't want us in
there," Walton wrote, "we aren't interested in going in and creating
a fuss."
Wal-Mart officials would like to replace the store on Kettleman
Lane and Lower Sacramento Road in Lodi with a 219,000-square-foot
Supercenter across the street on the southwest corner of the
intersection. (Casey Freeman/News-Sentinel) Fuss seems to follow
Wal-Mart everywhere it goes these days, more than a decade after the
book's release. The chain's plan to build 40 combination grocery and
department store Supercenters across California -- including one in
Lodi -- has been met with protests, lawsuits and, in some cases,
ordinances preventing such projects.
Rather than retreating behind its trademark happy face, however,
Wal-Mart has fought back with litigation, petitions and other means
of raising community support. When the Lodi Planning Commission
considered a size limit as part of its design standards Feb. 11,
Wal-Mart submitted a petition against the action containing more
than 1,000 signatures collected at its current Kettleman Lane
location. The city also received a letter from a law firm
representing the retail chain, claiming a size limit without proper
research would be a violation of state law.
For all its happy faces and service-with-a-smile mantras,
Wal-Mart can be a hard-edged political machine when its back is
against the wall.
"When everyone loves Wal-Mart, they have the little happy face
logo," said Steve Herum, a Stockton attorney who helped a citizens
group defeat two Supercenter projects in Bakersfield last month.
"When anyone disagrees with them, the happy face opens its mouth and
you see how sharp the teeth are."
In Bakersfield, the environmental documents for the two
Supercenters were approved without looking at sociological or
economic affects the stores would have on surrounding businesses,
Herum said. Representing a group called Bakersfield Citizens for
Local Control, Herum sued, and a Kern County Judge Kenneth
Twisselman ordered construction to be halted Jan. 30.
"Right now, the Wal-Marts are stopped dead in their tracks,"
Herum said.
The Supercenter proposed for Lodi, which would occupy 219,000
square feet across the street from the existing Wal-Mart at Highway
12 and Lower Sacramento Road, has not gone before the city's
Planning Commission. The commission did look at design standards for
stores larger than 25,000 square feet, however, with the intention
that a project such as the Supercenter would be forced to meet
stricter guidelines.
More than 100 Lodians turned out for the commission's Jan. 28
meeting, asking that a size limit -- 100,000 square feet was the
most common number -- be adopted by the city. At its Feb. 11
meeting, the commission considered such an option, but decided not
to include it among the standards.
Wal-Mart representatives -- including the developer for the
Supercenter project, the current store's manager and lawyers
representing the company -- addressed the commission at the meeting.
They warned that the city would be in violation of the California
Environmental Quality Act by adopting a size cap without proper
research, that such an ordinance would make the city look
anti-business and that Lodi couldn't afford to lose the sales taxes
such business would provide.
Critics argue that the retail giant's presence at community
meetings is just another example of it exerting its influence. But
Wal-Mart's Northern California representative, Amy Hill, said the
store can't be blamed for trying to be a part of the approval
process.
"Nobody tells our story better than we do," Hill said. "We are
the ones who are seeking approval with a store. It's not necessarily
a new phenomenon."
Though there is often community concerns when a new Wal-Mart
project is proposed, those fears are usually addressed through work
with community groups and organizations, Hill said. Most Wal-Mart
opposition has come from unions and retail outlets who don't
necessarily want any competition, she said.
"Wal-Mart is sort of a lightning rod," Hill said. "We certainly
have become the number one target for the grocery workers' union.
They have made no bones that they will fight all of our projects
tooth-and-nail."
Workers' groups don't want Wal-Mart in their community because
the company offers low wages and no health benefits, said Al Norman,
an author an activist who founded the anti-Wal-Mart organization
Sprawl-Busters. The all-in-one Supercenters could also put other
merchants out of business, leading to more empty stores in the
community, he said.
"This is a company that's willing to bulldoze mountains and fill
lakes in order to put a store in," Norman said. "These people have
no regard for local community sentiment."
It's not uncommon for Wal-Mart to become aggressive when trying
to get a project approved, Norman said. In fact, the corporation has
gone as far as using California's ballot initiative system to avoid
the approval process altogether, he said. Eureka residents voted
down a 1999 ballot initiative backed by a Wal-Mart-sponsored
citizens group to build a store on a site zoned for industrial use.
"You might call it the recall phenomenon," Norman said. "If you
want to change things in California, you don't need to put it
through the legislature. You can just put it on the ballot."
Things haven't gone that far in Lodi, where the Supercenter
project hasn't even reached the Planning Commission. As the approval
process nears, however, city officials expect Wal-Mart's profile to
increase as well.
"We would expect that Wal-Mart will increase its visibility in
the community as it continues along its next step in the process,"
said assistant City Manager Janet Keeter.
Wal-Mart plans to work with various community groups in addition
to attending meetings as its Supercenter project goes through the
approval process, Hill said. The company is willing to work with its
detractors, but won't be shunted aside because if some organizations
don't want them in town.
"We will not just roll over because people don't want to compete
against us," Hill said.
All of which leads back to Walton's quote from a dozen years ago.
Though it hasn't felt the ire of entire communities, Wal-Mart has
met resistance from pockets in many California towns -- including
Lodi. And almost every time, the fuss hasn't stopped the company's
plans.
"Sam Walton is dead," Norman said. "And with him went that phony
promise."
[back to top]
WHY EVERYONE DOESN'T LOVE WAL-MART
by Ann Woolner -
Pittsburgh Post-Gazette
[back to top]
22 February 2004
In tiny Sandfly, Ga., on Savannah's edge, residents celebrated
when they chased away a Target Super Store planned for their
neighborhood. But within a year, Wal-Mart Stores Inc. stepped in and
snapped up the site for a Supercenter.
"I've heard some people say we should have left well enough
alone," said Donald Stack, lawyer for two Sandfly churches fighting
against Wal-Mart in Georgia's courts.
Stack had just been in Atlanta to try to persuade the Georgia
Supreme Court to overturn a Savannah judge and revive the churches'
lawsuit to stop the Wal-Mart store. While the churches wait for the
court to rule, Wal-Mart doesn't.
Even as about 40 Sandfly residents boarded a rented bus and made
the four-hour ride to Atlanta on a recent Monday to watch Stack
plead their cause, the Supercenter had already risen from leveled
dirt.
"It just seems that Wal-Mart has total disregard for any
community they go into," says Herbert Kemp, president of the Sandfly
Community Betterment Association.
The fear here is that a store that big, open every minute of
every day and night, will dwarf the community and transform it.
Sandfly, with its 2,000 residents, many descended from former
slaves who began settling here in the 18th century, is but a speck
in the Wal-Mart universe. Still, the protest movement against the
invasion of big box stores is growing, joined by those angry at Wal-
Mart for other reasons.
Hundreds of communities around the country have organized, with
towns from Turlock, Calif., to Peachtree City, Ga., passing laws to
exclude these superstores. There is always a Wal-Mart store opening
somewhere, mostly Supercenters that occupy up to 200,000 square feet
of retail space -- not counting parking lots.
And beyond neighborhood issues, Wal-Mart has been drawing fire
for other practices, including the treatment of its workers and its
contribution to the outflow of U.S. jobs to Asia.
"A fair number of people are saying, 'I'm not as sure I want to
shop there anymore,' " said Patricia Edwards, who helps manage $5.5
billion at Wentworth, Hauser & Violich in Seattle, some of it in
Wal- Mart. "Then they look at their bank statements and say, 'I'm
not sure I can afford not to.' "
Which aspect of Wal-Mart concerns people most? Edwards laughs at
the choices.
Here's one. To protect against employee theft, many Wal-Mart
store managers until recently kept the overnight workers locked in,
unable to get emergency help quickly for injuries or sickness, the
New York Times reported last month.
There have been stories and lawsuits alleging Wal-Mart managers
force employees to work off the clock to avoid overtime pay. This
sort of thing, along with low wages and benefits, encourages union
organizing.
But, as Bloomberg Markets reports in its March issue, there is
evidence Wal-Mart has spies to hunt for organizers and retaliate
against union-friendly workers. Wal-Mart denies it.
Meanwhile, female Wal-Mart employees are suing in San Francisco,
claiming some 1.6 million current and former employees were paid
less and denied promotions because of their gender. And in October,
federal authorities arrested 245 undocumented aliens working in 61
Wal-Mart stores.
Then there is the matter of squeezing suppliers and contributing
to the national trade deficit and the loss of U.S. jobs. As the
world's No. 1 retailer bent on constantly lowering prices, Wal-Mart
muscles its suppliers to drop their costs, pushing manufacturing
jobs out of this country and into low-wage ones. The magazine Fast
Company had an extensive story on this in December.
And now come California grocers who lowered pay scales and
employee benefits, and set off a strike by the United Food and
Commercial Workers. Grocers contend they must compete against the
threat of Wal-Mart Supercenters, which sell groceries along with the
usual goods and are staffed with low-paid workers.
All of this is happening while Wal-Mart frenetically builds
mammoth Supercenters, replete with a new wrinkle: When Wal-Mart
determines that one of its traditional discount stores is unsuitable
for an upgrade, the company simply abandons it to build a larger
Supercenter nearby.
Wal-Mart's size, of course, makes it an inviting target. The
Bentonville, Ark.-based company has 1.2 million workers, $256
billion in sales for the 12 months that ended Jan. 31 and almost
3,500 Supercenters, traditional Wal-Marts and Sam's Clubs in the
United States.
Even so, you have to wonder what kind of company this is. Is it
necessary to spread so much misery to make investors so much richer?
Every third store Wal-Mart tries to build faces community
opposition, estimates Al Norman, who runs a consulting business in
Massachusetts and a Web site devoted to helping communities
challenge the stores.
In Sandfly, not everyone opposes the Supercenter. Susan Hunt, who
works behind the smoky bar at Deb's Pub and Grub, says she can't
wait to have a place to shop when she gets off work at 2 a.m.
To others, the fact that the Supercenter will be selling
everything from milk to mattresses all the time, drawing cars full
of shoppers and trucks full of goods, lighting the night over acres
and acres of parking lot, is hardly good news.
Its sheer size makes it monstrous next to the modest homes and
small-scale commercial strips that characterize Sandfly, which still
has an unpaved street here and there.
Wal-Mart spokeswomen didn't return telephone calls, but the
Savannah lawyer defending the company in the Sandfly suit, Harold
Yellin, said no one has offered evidence that Sandfly churches would
be harmed. Besides, Wal-Mart has promised to keep a 100-foot- deep
buffer of trees between the store and the road.
This doesn't satisfy the churches or the Sandfly Community
Betterment Association. "Wal-Mart will start a domino effect," said
association president Kemp. "And that is going to eventually wipe
out the majority of the remaining Sandfly residents."
Ann Woolner is a columnist for Bloomberg News. The opinions
expressed are her own.Ann Woolner
Caption: Stephen Morton/Bloomberg News Community activist Herbert
Kemp stands near the entrance to a Wal- Mart Supercenter
construction site in Sandfly, near Savannah, Ga. Residents in tiny
Sandfly celebrated when they chased away a Target Super Store
planned for their neighborhood. But within a year after a community
outcry prompted Target to fold its tent, Wal-Mart stepped in and
snapped up the Sandfly site for a Supercenter.
[back to top]
Wal-Mart vs. Contra Costa County
Ruth Rosen - San Francisco
Chronicle [back to top]
Sunday, February 22, 2004
ASK SHOPPERS in Martinez why they shop at the Wal-Mart there and
they'll tell you that the prices can't be beat, there's plenty of
parking and its one-stop shopping allows them to buy everything from
toothpaste to T- shirts.
So why have hundreds of communities across the nation tried to
prevent Wal-Mart from moving into their towns? And why, in
particular, did the Contra Costa County Board of Supervisors pass an
ordinance that would ban certain big- box stores larger than 90,000
square feet (the size of two football fields) from unincorporated
parts of the county?
Do all these people share some perverse pleasure in forcing
consumers to pay higher prices for the food and the goods they buy?
Of course not. The reason is that union members, environmental
activists, members of the clergy and elected officials realize that
every new Wal-Mart, which brings new jobs and low prices, also comes
with hidden costs -- to other retail workers, to small businesses,
to smart growth, and most of all, to taxpayers who discover, much to
their surprise, that they end up subsidizing the largest corporation
in the world.
The Los Angeles City Council, for example, released a 2003 study
that described how Wal-Mart super-centers drive down wages in the
local retail industry, create a strain on public services and damage
small businesses. The report concluded that Wal-Mart should be
banned unless the corporation increases wages and benefits for its
employees.
"Everyday Low Wages: The Hidden Price We All Pay For Wal-Mart" is
a new report just released by Rep. George Miller of Martinez, senior
Democrat on the House Committee on Education and the Workforce.
Wal-Mart's violations of labor law, according to the report,
"range from illegally firing workers who try to organize unions to
unlawful surveillance, threats and intimidation of employees who
dare to speak out."
Wal-Mart is also infamous for manufacturing 60 percent of its
products in China and other countries, often under grotesque labor
conditions; forcing its workers to work off the clock, and for
undercutting unionized janitors by hiring illegal immigrants.
None of this is news to many Californians. Seventy thousand
grocery workers in Southern California have been on strike and
locked out of supermarkets for more than four months. Their
employers have concluded that they can no longer compete with
Wal-Mart's low cost of business if they continue to offer decent
wages and affordable health-care benefits.
Critics of Wal-Mart describe this as a race to the bottom and the
death of the American Dream. The average union grocery worker earns
about $17 per hour, which has allowed generations of workers to
maintain a middle-class standard of living. Wal-Mart "associates,"
who work in the grocery departments of its super-centers, by
contrast, earn about $10 for the same work.
One reason Wal-Mart is so profitable is that it uses us, the
taxpayers, to subsidize its labor costs. Among the 44 million
uninsured Americans, according to Miller's report, are the majority
of Wal-Mart's workers, who simply cannot afford the premiums offered
by their employer.
The PBS news program, "Now With Bill Moyers,'' recently reported
that Wal- Mart's personnel offices actively encourage employees to
apply for public assistance. In addition, economists at the
Institute for Labor and Employment at UC Berkeley estimate that in
2002 California taxpayers subsidized $20.5 million worth of medical
care for Wal-Mart workers.
In other words, we taxpayers pay for the federal programs that
provide health care for the children of Wal-Mart's workers. We also
pick up the tab for the local public hospitals that provide health
care for Wal-Mart employees.
Wal-Mart, however, always insists that such accusations and
studies are false and never takes no for an answer.
After the Contra Costa supervisors passed the ordinance blocking
big-box grocers last June, Wal-Mart parachuted in
signature-gatherers to place the issue on the ballot. Determined to
overturn a decision made by the county's elected officials, Wal-Mart
is now arguing that the issue is really about "consumer choice."
But what it's actually about is Wal-Mart's efforts to boost its
profits by opening 40 new super-centers in California.
Those of you who live in Contra Costa County now face an
important decision: Should you subsidize the world's largest
retailer or should you support your county's right to protect the
standard of living of ordinary working families?
Vote "yes" on Measure L.
[back to top]
Wal-Mart hours case goes ahead
BY JULIE FORSTER - St. Paul
Pioneer Press
[back to top]
February 20, 2004
The Minnesota Supreme Court has declined to hear Wal-Mart Stores
Inc.'s appeal of a lower-court decision granting class-action status to store workers who say
they were denied overtime pay and work breaks, clearing the way for
the case to go to trial.
The case seeks millions of dollars in back pay and penalties for
what plaintiffs allege is a pervasive pattern of forcing Wal-Mart's Minnesota work force to miss
required breaks and to work off-the-clock. Wal-Mart asserts that it
pays its associates for every minute worked. The order was filed
Tuesday.
The class action, on behalf of more than 64,000 current and
former hourly employees at Minnesota Wal-Mart and Sam's Club stores,
is proceeding in Dakota County District Court. A scheduling
conference to determine a trial date has been set for March 9.
The lawsuit is similar to about 35 others that are pending
against the retailer in various courts around the nation. Wal-Mart
has settled some overtime lawsuits before the complaints could go to
trial. In other cases, judges have also dismissed class action
status.
A little over a year ago, a federal jury in Oregon decided that
workers at 18 Wal-Marts and Sam's Clubs in that state were not paid for some overtime worked. Last
week, a federal jury decided that 83 of those employees deserve
compensation.
In the Minnesota case, Tuesday's ruling is a procedural victory
for the plaintiffs. According to court documents, Wal-Mart's internal auditors
concluded that hourly employees in a sample of 127 stores - six in Minnesota - were denied more than
76,000 rest and meal breaks for a one-week period in June 2000. A
plaintiff's expert in the Minnesota case used the audit to determine
that the retailer shorted workers about 497,000 hours in breaks for
2000 alone, court records show.
Wal-Mart has said the audit was invalid and that it should not be
interpreted that employees missed meals and breaks. The person who
drafted the audit used flawed methodology, the retailer claims.
[back to top]
Immigrant seized in Wal-Mart raid gets a reprieve -
Janitor can
temporarily stay in U.S. to testify in labor case
BY BRIAN DONOHUE - Star-Ledger Staff
[back to top]
Friday, February 20, 2004
One of the illegal immigrants arrested in raids at Wal-Mart
stores in New Jersey last year has been given a temporary reprieve
from deportation to allow him to testify in a federal criminal
investigation into the retail giant's labor practices.
Maximiliano Mendez was one of more than 250 janitors arrested in
immigration raids of 60 stores nationwide Oct. 23. The raids were
part of a five-year probe into the alleged use of illegal immigrants
by contractors hired to clean Wal-Mart stores.
Federal officials also have taken the first step toward
protecting several other illegal Wal-Mart janitors arrested in
New Jersey from deportation as prosecutors continue to gather
evidence.
The cooperation by Mendez, arrested in Old Bridge, was revealed
last week when he failed to appear for a scheduled deportation hearing in Newark because he was scheduled
to testify before a Pennsylvania grand jury the same day.
Because of the conflict, immigration Judge Esmeralda Cabrera
agreed to postpone Mendez's immigration hearing until March 8.
Under U.S. immigration law, illegal immigrants who cooperate with
criminal investigations can have their cases delayed or be issued a
special three-year visa that allows them to live and work in the
country legally.
Garrison Courtney, spokesman for the Citizenship and Immigration
Services bureau, declined to comment on whether any arrested
Wal-Mart janitors had been offered such a reprieve by federal
prosecutors or the Department of Homeland Security.
Besides Mendez, the immigration cases of 12 other New Jersey
janitors have been transferred from the immigration service's Newark
District to offices in Philadelphia, Courtney said.
A source close to the investigation said the move was made so the
janitors' immigration cases can be coordinated with the criminal
probe by the U.S. Attorney's Office for the Middle District of
Pennsylvania.
Immigration officials are prepared not to seek their deportation
if federal prosecutors make such a request, the source said. "They are part of the case," the source said, adding the
immigration files had been moved "in case they want to provide
benefits."
A grand jury in Williamsport, Pa., began hearing testimony in
December into whether Wal-Mart officials knew the cleaning companies
they hired were employing illegal immigrants.
Wayne Samuelson, U.S. attorney for the Middle District of
Pennsylvania, declined to discuss details of the investigation.
"There is a grand jury investigation being conducted, and it's
going to take a while," Samuelson said, declining further comment.
Wal-Mart spokespeople have repeatedly denied that company
officials were knowingly using illegal labor.
The 13 janitors arrested in New Jersey, all from Mexico, were
arrested at Wal-Mart stores in Old Bridge, Union and Piscataway and
released pending deportation hearings. The hearing for Mendez, a
19-year-old who speaks little English, was the first scheduled for
the group from New Jersey.
Mendez's participation in the criminal investigation was revealed
after a testy exchange between Gilberto Garcia, Mendez's attorney,
and Cabrera, the immigration judge. Garcia presented a letter from
the U.S. Attorney's Office in Pennsylvania and stated his client was
in Williamsport.
"Is he participating in a grand jury investigation, is that it?"
Cabrera asked.
"I have a letter that says that information should not be
disclosed," Garcia responded. "My client is cooperating with an
investigation."
Garcia declined to comment after the hearing. He confirmed that
the grand jury investigation was connected to Mendez's employment
and arrest at the Wal-Mart in Old Bridge.
Mendez, who had been living in Tinton Falls at the time of his
arrest, is one of 17 former janitors seeking class action status for
a federal civil rights lawsuit against Wal-Mart. The suit alleges
company officials knowingly used a web of subcontractors to shield them from blame
while they reaped the benefits of a low-paid and often exploited
army of illegal janitors.
By securing testimony from Mendez and possibly other janitors,
prosecutors may be trying to avoid what has been a major pitfall in
two recent cases against U.S. corporations accused of immigration
violations, experts say.
In 2002, a federal judge in Omaha dismissed immigration charges
against Nebraska Beef Inc., faulting the U.S. immigration services
for deporting more than 200 illegal workers before the defense had a chance to
obtain their testimony.
Last year, a jury acquitted Tyson Foods and three of its managers
of immigrant-smuggling charges after a trial in which company
attorneys accused the government of losing track of the 150 illegal
immigrants that had been allegedly smuggled into the country.
In the wake of those two cases, prosecutors are increasingly
attempting to avoid prematurely deporting witnesses who could
provide evidence for either side, said David Martin, professor of law at the
University of Virginia and former general counsel for the U.S.
Immigration and Naturalization Service.
"The immigration authorities are going to want to remove as many
as possible, but everyone having been burned in these earlier
examples, they will want to make them fully available to
defendants," Martin said. "The urge now is toward a middle ground."
[back to top]
Jury: Wal-Mart must pay 83 for overtime
Associated Press
[back to top]
February
18, 2004
PORTLAND, Ore. A federal jury considering how much Wal-Mart
Stores should compensate employees who worked unpaid overtime ruled
Tuesday that 83 workers are entitled to payments.
The jury assessed each case individually and rejected money for
25 employees in the second phase of a trial that highlighted working
conditions at the nation's largest private employer.
The decision comes 14 months after a federal jury in Portland,
Ore., became the first in the nation to rule that Wal-Mart, the
world's largest retailer, made employees at 18 Oregon stores work
unpaid overtime from 1994 to 1999. About three dozen similar suits
against the retailer are pending nationwide.
Exact compensation for each worker is still to be determined.
Payments are expected to be modest, from a few hundred dollars to
several thousand per worker, based on 30 to 60 minutes of overtime
per week.
Attorneys for the plaintiffs called Tuesday's verdict a victory.
"The jury found that they did work off the clock and should be
compensated for it," said James Piotrowski.
[back to top]
Wal-Mart nation: the race to the bottom
By Floyd J. McKay - Special to The Times
[back to top]
February 18, 2004
Los Angeles is not my kind of town. But the Angelinos are about
to take a stand that ought to be applauded across the country.
That stand is to say "no" to a Wal-Mart "supercenter" that the
retailing giant hopes to open in the city.
These superstores are not your father's Wal-Mart; they are
monstrous, sprawling over some 25 acres and employing up to 600
workers. Their lure, of course, is lower prices.
Wal-Mart, it seems to me, epitomizes the race to the bottom that
has the United States by the throat as the 21st century opens.
Why do people shop at these behemoths, when they know full well
that they are driving out of existence small businesses owned and
operated by their neighbors, employing other neighbors?
They shop because of price, and they are forced to do so by the
declining standard of living we have offered working people for more
than a generation. People who work for minimum wage, with little or
no benefits, who cannot afford to fix their car or their kids' teeth
have no choice but to search out the lowest price.
Wal-Mart buys offshore, without apology and for the cheapest
possible prices, from companies paying the lowest-possible wages.
As jobs in America are lost to foreign sweatshops to feed the
Wal-Mart engine, American workers are forced to accept jobs at lower
pay, with bad working conditions. They are funneled to Wal-Mart's
promise of cheap goods, in effect patronizing the very companies
that caused their economic misery.
This is a cruel travesty on working people in this country.
Wal-Mart is currently being sued in some 40 cases charging
various abuses of labor laws, and last fall it was reported the
company extensively employs illegal aliens as janitors. Wal-Mart has
successfully opposed unionization and frequently pays well below
competing stores.
All of these practices alleged abuses of labor laws, hiring
illegals, and the low rate of pay and benefits at Wal-Mart serve
to depress the labor market in communities in which the giant is
located. That is a major factor in Los Angeles' opposition to the
supercenter.
We live in a nation in which the real-dollar income of an average
family has declined for years, while corporate profits and executive
pay have skyrocketed.
The gap between rich and poor has widened at an alarming rate in
the past 20 years. In 44 states, the gap has increased not only
between rich and poor, but between rich and middle-class families.
None of the six exceptions is a Northwest state. Oregon has one of
the worst gaps, Washington is about average.
In some states, the inequity is staggering. In three of the
nation's largest states California, New York and Ohio families
in the lowest 20 percent bracket actually lost real income from 1978
to 2000. In 1999 dollars, the loss was between 5 and 6 percent. In
those same states, the real income gain for the top 20 percent of
families ranged from 37 to 54 percent.
Nationwide, from 1978 to 2000, the lowest 20 percent of families
gained only $972 annually, or 7.1 percent; the top 5 percent gained
$87,779, or 58.4 percent.
These findings, by the nonpartisan Center on Budget and Policy
Priorities (www.cbpp.org), were before the Bush tax cuts and the
current recession, both of which will further widen the gap.
You can't blame Sam Walton for this disparity, but operations
like Wal-Mart feed off the impoverishment of America.
Sadly, there are byproducts in quality of life, often unseen
until it is too late.
The greatest is the destruction of America's small and mid-sized
towns, increasingly bereft of small businesses and dominated by
big-box retailers acres of barren asphalt parking lots, corporate
managers on their way to the next-larger store, employees scrambling
to keep low-wage jobs.
My wife's recently deceased aunt could no longer shop in the
small Iowa town where she and her late husband ran a feed store. The
store is closed, as are the other small businesses. The elderly
woman had to drive or be driven past the empty shops several miles to Wal-Mart, the nearest place to get the basics of
life.
Wal-Mart is like a neutron bomb, sucking life out of small towns,
leaving buildings without the essence of civic life.
Those of us fortunate to earn middle-class incomes can make a
choice, and shun Wal-Mart. The tragedy is that for an
ever-increasing segment of America, the despicable race to the
bottom has left no other choice than to shop for cheap, regardless
of the consequences.
Floyd J. McKay, a journalism professor at Western Washington
University, is a regular contributor to Times editorial pages.
E-mail him at floydmckay@yahoo.com
[back to top]
Wal-Mart plans to do away with bar codes
The Dallas Morning News
- Charleston Gazette
[back to top]
15 February 2004
BENTONVILLE, Ark. - Linda Dillman was astonished that replacing
the bar code with a chip would cause such a tempest. "Lead">
Since the Wal-Mart Stores Inc. chief information officer
announced the company's plans in June, some of the retailer's
biggest suppliers have muttered under their breaths about its
powerful influence.
Technology companies peppered Dillman with questions about a fair
price for the chips. Consumer advocates, meanwhile, wanted to know
whether the chips would invade customers' privacy.
To all, Dillman has a simple answer: Get ready, because change is
coming. Wal-Mart is positioning itself at the front of an inevitable
technological revolution, even if it means dragging others into a
future they're not sure they want, Dillman said.
Radio-frequency identification, or RFID, was already one of the
most exciting and furiously debated topics in the technology world
when Wal-Mart stepped into the middle of it.
Now attention turns to three Wal-Mart warehouses in the Dallas
area, where the world's second-largest company plans to start its
conversion.
RFID chips beat bar codes by reducing human error and
opportunities for theft, business executives said. Bar codes require
a level of human interaction for scanning that RFID chips do not.
"We can track our product from the time it leaves through the
whole delivery system," said Dennis Mullen, chief executive of Birds
Eye Foods Inc.
"If it gets stuck somewhere along the line, we can take
corrective action."
RFID tags contain a small chip and an antenna, usually coiled, to
broadcast a signal. They were originally attached to Allied planes
in World War II to distinguish them from enemy aircraft.
Over the years, RFID chips have been used in everything from
anti-theft devices in clothing shops to Exxon Mobil Corp.'s
Speedpass, which allows customers to pay for their gas wirelessly.
As chips became capable of storing more information in a tiny amount
of space, technologists began exploring even more uses for RFID.
Retailers, technology firms and consumer products companies have
spent the last few years coming up with a complex numbering system
to identify RFID-tagged items in stores.
That system is now close to reality, leading technology companies
such as Texas Instruments Inc., Microsoft Corp. and International
Business Machines Corp. to believe RFID is on the cusp of explosive
growth.
If Wal-Mart had not seized upon RFID technology, someone else
would have, many business executives say. Wal-Mart is part of the
standards organization that will make RFID tags work in the retail
industry, but so are big competitors such as Target Corp.
"People who cannot come up to speed on this technology are going
to be left behind," said Mullen of Birds Eye. "Eventually, it's
going to be a way of life."
RFID has a dazzling allure in the retail industry, where
enthusiasts envision every product having a digital tag instead of a
bar code. A can of soda, for instance, could be tracked from
manufacture to warehouse to store to a customer's RFID-equipped
refrigerator.
That scenario unnerves privacy advocates, who worry about a
corporation's being able to track a customer's every move.
Wal-Mart's plan, thus far, is nowhere close to that vision,
Dillman said in an interview at the company's northwest Arkansas
headquarters.
The retailer is asking suppliers to attach RFID chips to their
crates and cases of products. At this point, only those large
shipping containers would be tagged, not individual products.
Most suppliers have until 2006 to add the chips, but the top 100
suppliers have to do it by 2005, the retailer says.
The RFID chips, like bar codes, will contain information about
the products inside the crates. Readers the size of clock radios are
to be planted in Wal-Mart's warehouses to wirelessly detect radio
waves emitted by the chips.
The RFID readers will thus continually compile data about the
whereabouts of Wal-Mart's inventory. RFID readers in the back rooms
of stores will allow the company to determine whether it's about to
run out of products such as deodorant or paper towels.
In a makeshift laboratory tucked inside one of Wal-Mart's
distribution warehouses in Bentonville, RFID infrastructure
architect John Laffoon and his colleagues have been subjecting
various products to rigorous tests.
A package of soda bottles or soap bars slides on a conveyor belt
underneath a reader, which instantly registers the products'
identification codes on a nearby computer monitor.
Laffoon's job is to trick the reader. If he turns a package of
deodorant canisters so that its RFID tag is facing away from the
reader, for instance, the package might sneak by. RFID signals have
trouble traveling through liquids and some metals - the basic
ingredients of deodorant.
Wal-Mart, its suppliers, and technology companies are busy
working on ways to make even those tough products RFID-readable.
The idea is to make sure each crate of products is always visible
when it passes under a reader. And there would be no human
intervention - employees wouldn't have to check which way the tags
faced or if a crate had been moved.
RFID's "big win," Dillman believes, is in the backroom of
Wal-Mart stores, a place that is even more susceptible to human
error as employees try to keep up with constantly depleting stock.
Consumers would always find their products on the shelves, and
Wal-Mart and its suppliers could avoid losing sales, Dillman said.
Everyone benefits, theoretically.
Publicly, Wal-Mart's top suppliers say they're happy to comply
with its 2005 deadline. The grumbling goes on in private, but
Dillman has heard it.
"There aren't people who are going to come to us and say it,"
Dillman said. "We hear it from the background noise."
The chief complaint, of course, is about money. An RFID chip
costs 20 cents or more, and the antenna and packaging for the tag
add to the price. Suppliers must also pay for the infrastructure
needed to add the tags to their shipments.
And if they want to take advantage internally of RFID's
capabilities, they have to pay for readers, software, employee
training and more.
Not only is Wal-Mart asking suppliers to make an expensive
investment, it's setting a deadline. Some suppliers would rather
wait until the cost of chips comes down, but they can't if they're
supposed to be ready in 2005.
Wal-Mart's 2005 deadline may reduce the price of RFID chips more
quickly than they would have fallen otherwise. The U.S. Defense
Department announced a similar deadline for suppliers soon after
Wal-Mart's plans became public, which should also help prices fall.
If other companies put RFID plans into motion, as expected, tag
prices could come within the 5-cent range - the point Dillman and
many suppliers believe is appropriate for supply-chain tagging.
Even with tags at their current prices, some suppliers are eager
to move ahead with RFID, believing it will offer them an advantage
over rivals that don't move as quickly.
"You can always come up with reasons why you shouldn't do
something like this," said Ian Robertson, director of
Hewlett-Packard Co.'s RFID program. "But if everyone did that, the
world would never have moved forward."
Still, even those who have embraced the Wal-Mart initiative see a
daunting year ahead.
"It's going to be a challenge," said Mike O'Shea, who oversees
RFID strategy at Irving, Texas-based Kimberly-Clark Corp., maker of
Kleenex tissues and Huggies diapers. "But Wal-Mart and
Kimberly-Clark didn't get where they are today by seeing how low
they could set the bar."
Dillman said she expects Wal-Mart's top 100 suppliers to do what
the chain is asking, but she fears that as many as half of them
don't understand the value of RFID. Wal-Mart has dispatched
executives across the country to help suppliers, guiding them
through the testing process.
Most companies will find that the technology will save them
money. In the rare occasions in which RFID doesn't seem to work,
Wal-Mart is willing to compromise.
"We won't force somebody into a bad business case," Dillman said.
"It's a firm deadline. However, we're going to work through with
each supplier what the issues are for them."
Dillman is hardly a wide-eyed RFID fanatic. The 47-year-old had
heard of RFID before she became chief information officer, but the
company was only beginning to seriously study it.
An early proponent was Wal-Mart vice chairman Tom Coughlin, who
had read Intel Corp. co-founder Andy Grove's book Only the Paranoid
Survive and felt that RFID would be what the author described as a
"strategic inflection point" - a change that ultimately separates
successful companies from failures.
Under late founder Sam Walton's direction, Wal-Mart rose to power
by developing some of the most sophisticated inventory-tracking
technology in the retail industry. The retailer drove prices down,
in part, by knowing more about what it owned than competitors did.
To Dillman, RFID is just part of that tradition.
"Some company cultures don't allow people to experiment," she
said. "We're not afraid to test things."
[back to top]
What if Wal-Mart took over the world?
Bob Mook - Fort Collins
Coloradoan [back to top]
15 February 2004
I have a premise for a science-fiction novel. Set in the not-too
distant future, it involves a small band of maverick businesspeople
who battle the world's dominant employer.
The company - let's call it Mal-Wart - enslaves about 99 percent
of the global population through its manufacturing, distribution and
retail operations.
But that's not all. Mal-Wart controls all major industries:
building and construction, banking and finance, energy,
transportation, technology, health care and media.
The company rules these sectors with a brutal efficiency that
obliterates the competition and leaves oppressed workers across the
globe overworked and underpaid as prices for goods and services
plunge lower and lower.
Anyway, to make a long story short, the scrappy businesspeople
lose.
You expected a happy ending?
n n n
The real-life Mal-Wart is the world's largest employer.
Last year, 7.5 cents of every dollar spent in any store in the
United States went to Wal-Mart Stores Inc.
According to Fast Company, Wal-Mart is bigger than ExxonMobil,
General Motors and General Electric. It does more business than
Target, Sears, Kmart, J.C. Penney, Safeway and Kroger combined.
And the company still is growing - rapidly. In fact, executives
boast it has just scratched the surface.
Wal-Mart plans to open about 50 to 55 new discount stores and 220
to 230 new Supercenters for fiscal year 2004.
The chain will build a second Supercenter in Loveland, and it may
be eyeing a location in Windsor, as well.
Rumors that Wal-Mart might close its Fort Collins store at 4625
S. Mason St. appear unfounded for the time being.
Sprawl-busters.com reports that Wal-Mart had 325 buildings for
sale or lease as of February 2003.
But I question whether the Fort Collins closure will happen.
Somehow, closing stores doesn't seem like Wal-Mart's style - unless
you're talking about competing stores.
Given Wal-Mart's aggressive growth strategy, expect to find
Wal-Marts inside of Wal-Marts someday.
All will become Wal-Mart.
It is the corporate equivalent of "Star Trek's" Borg: "You must
assimilate
resistance is futile
"
On the positive side, a recent study concluded that 12 percent of
the economy's productivity gains in the second half of the '90s
could be attributed to Wal-Mart. And the chain is credited with
holding down inflation.
Where but Wal-Mart would you find a 15-speed mountain bike with
free assembly for $52? How about a 20-piece screwdriver set from
Stanley for only $12.97? Why not splurge for a 13-ounce box of Post
Fruity Pebbles cereal at $1.98?
But Wal-Mart's appeal comes at a cost for American jobs.
Manufacturers of everything from bras to bicycles have had to lay
off employees and shut down U.S. plants to meet the retailer's
growing price demands.
Still, for many consumers, the ends justify the means.
As long as the ends are cheap.
[back to top]
Miller supports 'big-box' Measure L Congressman's
report says
Wal-Mart has hidden taxpayer costs, which company disputes
By Matt
Carter, Staff Writer -Valley Herald
[back to top]
Tuesday, February 17, 2004
CONCORD -- Demonstrating his support for an ordinance aimed at
keeping "big-box" retailers out of Contra Costa County, Rep. George
Miller issued a report Monday alleging Wal-Mart stores carry hidden
costs for taxpayers.
Wal-Mart workers are paid below-average wages and often don't
receive health benefits, the report said, meaning the federal
government may end up subsidizing their medical bills, housing and
food.
But a Wal-Mart Stores Inc.
representative said the claims are unsubstantiated, saying Miller, a
Martinez Democrat, is catering
to labor unions and avoiding issues surrounding the county's Measure
L.
Measure L would ban stores of90,000 square feet or larger in
unincorporated areas if they devote more than 5percent of their
floor space to nontaxable items such as groceries.
Worries about Wal-Mart's plans to offer such full-scale grocery
stores at 40 "supercenters" it plans to build in California prompted
the Contra Costa County Board of Supervisors to adopt the ordinance
last year.
Wal-Mart, which has characterized the ordinance as
anti-competitive and anti-consumer, collected enough signatures for
a referendum. Voters in the March 2 primary will decide whether the
county ordinance becomes law.
Alameda County and the cities of Oakland and Martinez have
adopted similar ordinances. Wal-Mart is challenging Alameda County's
big-box ordinance in court. Although Wal-Mart plans to build a
supercenter in Tracy, the plan hasn't been controversial so far.
Wal-Mart's bid to sell more groceries is also an issue in a
strike by unionized grocery workers in Southern California. The
three grocery chainsinvolved in the strike, including
Pleasanton-based Safeway Inc., say they need to cut costs to compete
with Wal-Mart and want workers to pay a share of their health
insurance benefits.
Miller invited county officials, labor leaders and small-business
owners, who say their livelihoods are threatened by the giant
retailer, to speak at a press conference at his Concord office.
Calling Wal-Mart a "multibillion corporation" that's made a
conscious decision not to provide fair wages and benefits, Miller
said Wal-Mart has a long history of breaking the law by thwarting
employees' rights to organize and become union members.
Miller's report, prepared by Democratic staff members of the
House Committee on Education and the Workforce, estimates a
hypothetical Wal-Mart store employing 200 people costs federal
taxpayers $420,750 a year.
The report assumes, for example, that if each store has 30
employees with two children who qualify for the Children's Health
Insurance Program, that costs the government $108,000 a year. If
just 3 percent of the hypothetical store's employees qualify for
Section 8 housing assistance, that costs the government $42,000 a
year.
Such allegations aren't new. In his report, Miller relied heavily
on newspaper and magazine stories about the wages and benefits paid
by Wal-Mart.
Wal-Mart spokeswoman Mona Williams said the report is "just
bashing Wal-Mart rather than looking at real issues in Contra Costa
County. It has ripped from the headlines a litany of unproven
allegations against Wal-Mart."
Citing a study by the AFL-CIO, Miller claims 41 percent to 46
percent of Wal-Mart employees have health insurance through their
employer.
Williams said the number is closer to 50 percent, and that
another 40 percent have health insurance through a spouse, parents
or retirement plans.
"You have to look at the makeup of our work force, which is
college students, seniors and people earning a second income," said
Williams, Wal-Mart vice president of corporate communications. "Some
choose not to duplicate coverage they already have. Roughly 90
percent have health care (through Wal-Mart or another source)."
A Wal-Mart supercenter employs 400 to 500 people, she said, and
generates $4.5 million in tax revenue a year.
"More than 40 percent of (Wal-Mart employees) on our health care
plan had no coverage at all before they came to Wal-Mart. These are
people who might have fallen through the cracks without Wal-Mart,
and then become a financial burden to local communities."
Contra Costa County Supervisors John Gioia and Mark DeSaulnier
were among those attending Monday's pro-Measure L press conference.
They said the ordinance is aimed at reducing traffic impacts of
stores like Wal-Mart supercenters. Because they do not generate as
many car trips, wholesale food outlets such as Costco and Wal-Mart's
Sam's Club would be exempt, they said.
DeSaulnier said the ordinance doesn't specifically target
Wal-Mart, but "a model (the supercenter) they created."
A link to Miller's report is available at
edworkforce.house.gov/democrats
[back to top]
Wal-Mart's low prices carry a high price tag here and
abroad When
you think about it, the price you pay at Wal-Mart isn't so low after
all.
RICHARD AMRHINE - The Free
Lance-Star [back to top]
2/15/2004
WAL-MART HAS become my store of last resort. Price may be
everything to some people. But when you consider how Wal-Mart
manages to keep those prices so low, you might think twice about
shopping there.
There are three basic viewpoints to consider--that of the
company, that of its employees and suppliers, and that of the
shoppers.
In the end, the company alone comes out ahead.
The last time I shopped the Wal-Mart Supercenter at Central Park,
my jaw dropped when I arrived at the checkout area. Half the
registers were closed, and those that were open had lines with as
many as 25 customers in them--most with heaping-full carts.
I chose a line and stood there, and stood there. After 20
minutes, with at least another 20 minutes to go, I gave up, took my
cart to the greeter, and left empty-handed.
That poor service is basic, in-your-face evidence of the high
price people pay for Wal-Mart's low prices. The company knows that
nearly all shoppers will wait it out.
Once when I actually did make it to checkout, I asked the clerk
why so many registers were closed, and she said the store can't find
enough people willing to work there.
Yes, the company does pay a few bucks above minimum wage, on
average, but then makes it back by denying decent health care and
other benefits to its "associates."
By beating back all moves toward unionization, the company is
able to keep its personnel costs at rock bottom. The average wage of
$8.25 is $2 less than at the average unionized grocery store.
The company also pays less for the goods it sells. Because of its
size and clout, Wal-Mart can force vendors to meet its prices,
rather than negotiate with them.
The so-called all-American Wal-Mart turns to the cheap labor of
Third World countries to keep prices low. A recent Washington Post
article reveals that 80 percent of the 6,000 factories in Wal-Mart's
database are in China. The company might try to keep tabs on these
foreign sweatshop operations, but the factories still routinely
employ underage workers and require 80-hour work weeks, and they
might pay less than $100 a month. There is no need to improve
conditions when there are millions of surplus Chinese workers
available.
Made in Myanmar
Wal-Mart factories in Myanmar (Burma), Nicaragua, and the African
countries of Lesotho and Malawi also employ workers who work long
hours in unsafe conditions and earn less than what would provide a
decent standard of living even in those economies.
In this country, federal agents last fall arrested some 300
illegal workers at U.S. Wal-Mart stores, including the one in
Culpeper, who were brought in by subcontracted janitorial services.
If Wal-Mart can't keep an eye on its contractors here, how well
can it do in China?
The business Web site Hoover's Online reports that Wal-Mart is
the world's top retailer with 4,800 stores, three-quarters of them
in this country. The company estimates that 93 million Americans
shop at its stores. It also happens to be the top retailer in Canada
and Mexico.
So things are looking rosy at Wal-Mart corporate headquarters in
Bentonville, Ark. The firm had net income of more than $8 billion
last year, up more than 20 percent from the year before. It had
sales of $245 billion last year, 12 percent more than the year
before. But with 1.4 million employees in 2003, it had only 1.2
percent more than the year before.
When you see those vests that ask, "How may I help you?" it
should add, "I may be your last chance."
From a strictly business standpoint, the company's record of
growth is unmatched. According to the specialized publication Chain
Store Age, Wal-Mart plans to spend more than $12 billion on
new-store construction in 2004, resulting in some 50 to 55 discount
stores and 220 to 230 supercenters across America. About 140 of the
new supercenters, which include full grocery stores, will be
relocated or expanded units. That was the case with the new one at
Central Park that replaced the old one on State Route 3 in
Spotsylvania.
There's no denying the success of the Wal-Mart model, and no
indication that the company will change what it considers a proven,
successful formula. Why should it, when the Walton family is free to
amass billions of dollars rather than reinvest it in its own workers
or in foreign factories?
But in the long run, will Wal-Mart prove to be an American
success story or an American nightmare? Is it really shoppers'
Nirvana, or is that simply what Wal-Mart would have us believe?
Wal-Mart has become America's largest toy retailer. As a result,
FAO Schwarz has shut down, Zany Brainy has filed for bankruptcy, KB
Toys is closing 375 stores (including nine elsewhere in Virginia),
and Toys "R" Us is reacting to the pressure by carrying more clothes
and fewer toys.
Giant impact
A survey on the supercenters' impact on grocery stores suggests
that two supermarkets will close every time a supercenter opens.
Locally, the impact may be felt as Royal Ahold, the parent company
of Giant Food, reorganizes its holdings, cuts jobs, and turns Giant
into a leaner, more price-oriented chain. Ahold blames its troubles,
in part, on Wal-Mart supercenters.
Drug stores feel the pinch as well when Wal-Mart pharmacies
gobble up their business.
Which local stores will close when Wal-Mart opens yet another
supercenter next year at Southpoint? Time will tell.
County officials applauded the company's return to Spotsylvania
County after closing the Route 3 store in 2002. But will the new tax
revenues be offset by the loss of business elsewhere? How about the
less-visible costs of emergency-room visits by Wal-Mart employees
who can't afford health insurance? How about the unemployment
insurance that's paid to those put out of work by Wal-Mart?
Such costs are borne by everyone, including the low-income
families who rely on Wal-Mart to stretch their dollars. The
company's very existence depends on people failing to realize that,
in one way or another, we all end up paying for low, low Wal-Mart
prices.
What we get are fewer stores to choose from, higher insurance
costs, unemployed neighbors who face the loss of their homes, and a
culture that believes there's nothing more important than saving a
few cents on toilet paper and light bulbs.
The richest nation in the world, and all we want are low prices
and low taxes. When it finally hits home that we have a cheapened
quality of life to match, we shouldn't complain.
Certainly Wal-Mart won't complain. It is supplying itself with an
ever growing pool of low-income people who think they're doing
themselves a favor by shopping there. And if Wal-Mart took away
their jobs, they can wait in line all day.
[back to top]
Ukiah protesters win right to sue Wal-Mart State appeals
court
overturns Mendocino judge's upholding of arrests of 8 demonstrators
By STEVE HART - THE PRESS DEMOCRAT
[back to top]
February 14, 2004
Eight Mendocino County activists who were arrested at a protest
in front of Ukiah's Wal-Mart four years ago can sue the retail
giant, which they accused of violating their constitutional rights,
a state appellate court ruled.
The 1st District Court of Appeal, based in San Francisco,
reversed a Mendocino County Superior Court ruling that said Wal-Mart
was within its rights when a store manager had the protesters
arrested for trespassing.
"The court said this is false arrest," said Mark Merin, a
Sacramento attorney who represents the protesters.
Unless Wal-Mart appeals the decision to the state Supreme Court,
the case will return to Mendocino County for a trial.
Christi Gallagher, a spokeswoman for Wal-Mart in Bentonville,
Ark., said the company hasn't seen the Feb. 10 ruling and can't
comment on it.
The 19-page opinion written by Presiding Justice Anthony Kline
said there's little evidence the protesters broke any laws.
The dispute began in February 2000, when Ukiah-area resident
Richard Johnson asked Wal-Mart customers to sign a petition for a
ballot measure to decriminalize the personal use of marijuana in
Mendocino County. Wal-Mart officials called police and had Johnson
arrested for trespassing in the store's parking lot.
Four days later, about two dozen activists showed up at the Ukiah
store to protest Johnson's arrest, solicit signatures for the
marijuana initiative and register people to vote.
Wal-Mart manager Donald Estes called police, who observed the
protesters but didn't make any arrests.
After talking with police, Estes asked the protesters to leave.
When eight of the protesters refused, he placed them under citizen's
arrest for trespassing.
Officers took them to the Ukiah police station, where they were
booked and released.
The protesters included Dan Hamburg, a former North Coast
congressman and Green Party candidate for California governor.
District Attorney Norman Vroman decided not to prosecute the
protesters, saying they didn't violate any laws.
In 2001, the group sued Wal-Mart, alleging they were falsely
arrested and their civil rights were violated.
Wal-Mart responded that the protesters didn't follow its rules
for public gatherings on company property and that they were
harassing customers. The company said some customers complained
about the group.
In 2002, Mendocino County Superior Court Judge Richard Henderson
dismissed the case, ruling the group didn't comply with Wal-Mart's
rules.
The three-judge appellate panel disagreed with Henderson, saying
the protesters weren't subject to citizen arrest just because they
didn't follow Wal-Mart's rules. They said Wal-Mart must show
protesters interfered with its ability to do business by obstructing
or intimidating its customers.
The protesters admitted they didn't follow Wal-Mart's
regulations, but denied interfering with customers.
The appeals court said Estes never saw the protesters harass any
customers, so he didn't have a good reason to arrest them.
The judges said Wal-Mart must prove that its manager arrested the
protesters for violating the trespassing law "and not for the
purpose of suppressing protected speech."
[back to top]
Wal-Mart files against Turlock; Lawsuit stems over supercenter
law
By Karen Gullo, Bloomberg News - The Oakland Tribune
[back to top]
12 February
2004
Wal-Mart Stores Inc., the world's largest retailer, sued a
central California town to block an ordinance aimed at keeping out
supercenter stores that sell groceries and other merchandise, the
second time Wal-Mart has gone to court over such a law in the last
month.
Wal-Mart filed two lawsuits that claim the Turlock ordinance --
which prohibits stores larger than 100,000 square feet from devoting
more than 10 percent of the floor to groceries and prescription
drugs -- restricts competition, the company said. The suits were
filed in state and federal courts.
Wal-Mart faces opposition in California where consumers spent
$301.6 billion in 2002 in retails stores from towns that want to
keep out large stores they say undercut local merchants and create
traffic problems. Wal-Mart sued Alameda County on Jan. 26,
challenging a similar ordinance scheduled to take effect this month.
"Wal-Mart seeks the court's intervention to prevent the city's
unconstitutional attempt to restrict competition and regulate
interstate commerce," said Peter Kanelos, a spokesman for
Bentonville, Ark.-based, in a statement.
Dick Burton, Turlock city attorney, didn't respond to a message
left at his office. Turlock is 107 miles east of San Francisco and
has 61,000 residents.
The lawsuits say the city failed to comply with environmental
review rules and violated zoning laws and the equal protection
clause of the U.S. Constitution when it passed the ordinance, which
doesn't apply to membership stores. Wal-Mart seeks to have the
ordinances declared invalid.
Wal-Mart has 147 stores in California and plans to open 40
supercenters in the state over the next four years. The company
opened a 99,000 square-foot store in Florida, smaller than its
regular stores that can be up to 190,000 square feet and larger than
its 50,000 square-foot grocery stores. The middle-sized stores may
let Wal-Mart sidestep California restrictions, analysts say.
Wal-Mart's shares fell 46 cents to $57.07 in New York Stock
Exchange composite trading.
[back to top]
Toymakers, Wal-Mart battle over prices
By ANNE D'INNOCENZIO AP
BUSINESS WRITER [back to top]
February 12, 2004
NEW YORK -- Led by Wal-Mart Stores Inc., discount retailers won a
war with other toy stores this past holiday season. Now toymakers, a
casualty in that bitter fight, have decided to make their own stand.
To protect themselves and toy retailers they see as key to their
profits, some manufacturers plan to deliver fewer hot toys to
Wal-Mart and to have more exclusive launches at chains like Toys "R"
Us Inc. It's a rare instance of manufacturers challenging the
biggest U.S. retail juggernaut and its low-price approach to
business.
Wild Planet Toys' Aquapets, an interactive critter, will be at
Toys "R" Us exclusively for three months this spring before it
reaches the mass merchants.
"The success of Toys 'R' Us is important for the health of the
toy industry," said Danny Grossman, founder and CEO of Wild Planet.
Said Jim Silver, publisher of the Toy Book, an industry magazine:
"Wal-Mart is a very important part of the toy business, but
toymakers don't want its low-pricing strategies to devalue their
brands and their business - and put more toy retailers out of
business."
The price wars contributed to the bankruptcies last holiday
season of FAO Inc., owner of the famed FAO Schwarz, and KB Toys
Inc., which plans to close nearly a third of its stores.
"Whether it is exclusive launches or controlled product
shipments, they are going to do whatever they can to keep other
retailers healthy," Silver said.
Still, given the clout of Wal-Mart, which has a 21 percent share
of the toy market, it remains to be seen whether these strategies
will be effective. Many manufacturers- who wanted to speak
anonymously for fear of losing the discounter's business - said
there is only so much they can do. Setting prices with retailers is
illegal under antitrust laws.
And Karen Burk, a Wal-Mart spokeswoman, said: "Our focus will
continue to be what it has always been, and that is delivering value
to our customers, and that will not change."
The pricing issue is expected to be a key concern of
manufacturers and retailers at the American International Toy Fair,
the industry product expo that officially begins Sunday.
Toy price wars have always been part of the holiday season, but
2003 was even more brutal than expected. In September, Wal-Mart
started by dramatically reducing prices on more than a dozen hot
toys, six weeks earlier than usual.
The retailer sold Mattel's Hot Wheels T-Wrecks playset for $29.74
instead of the original $49.88, while the price of Play Along's
Sing-Along Care Bears fell to $14.99 from $24.99.
Wal-Mart used the toys as a loss leader to woo shoppers to other
aisles elsewhere in the store. Discount rivals including Target
Corp. followed, but other stores that could not compete ended up
canceling orders and advertisements.
Manufacturers see several concerns about Wal-Mart's pricing on
the toy business: its deep discounting makes toys unprofitable for
other retailers, who are likely to order fewer products. They also
fret Wal-Mart's strategy forces more traditional toy stores to
close. Plus, toys may become a devalued product - permanently
lowering margins and making toys that are never discounted seem far
more expensive to shoppers.
That's why manufacturers are worried about 2004. "This sets the
bar this year," moaned Jay Foreman, CEO of Play Along.
The $20 billion traditional toy industry suffered a 3 percent
decline in sales last year, according to analyst estimates.
Meanwhile, prices fell 4.3 percent on top of a 9.3 percent decline
in 2002, according to the Labor Department.
Some companies like Applause LLC are determined to create a best
seller even without discounters' help. The toy company, which limits
its distribution to independent stores and specialty chains, is
reintroducing Dream Pets, fuzzy animals originally brought to the
United States in the 1950s from Japan.
"I believe that phenomenons can happen today without mass
merchants," said Bob Solomon, chairman of the Woodland Hills,
Calif., company.
Still, those who still want to have a good relationship with
Wal-Mart will need to be diplomatic; with $256.03 billion in sales
last year, the company has unprecedented power and offers a chance
for big sales that manufacturers cannot ignore.
During a recent conference call with investors, Bob Eckert,
chairman and CEO of Mattel, said the company is trying to lessen the
impact of price wars by building "more value into our products to
sell more on content and less on price."
"We expect the business environment will continue to be a
challenge with ongoing retail consolidation and cost pressures," he
told investors."How long it takes to get through this is anybody's
guess."
Not all manufacturers are upset by what happened last year.
LeapFrog Enterprises Inc. believes Wal-Mart's price cutting of some
of its educational products helped to establish the chain as a
destination for the brand, said Tom Prichard, senior vice president
of marketing.
The closings of other toy retailers is something that "was going
to happen. Wal-Mart is bringing it to the forefront earlier,"
Prichard said.
[back to top]
Police Say $30 Million in Cocaine Found Amid Toys in Truck
Channel 11 ABC News, Raleigh, NC
[back to top]
February 11, 2004
Police found an estimated $30 million worth of cocaine hidden
among a tractor-trailer full of toys headed for Wal-Mart stores in
North Carolina. State pulled over a tractor-trailer Sunday on Interstate 40 near
Forrest City, saying it was speeding. Troopers said the truck's driver was cited for driving on a
suspended license and that he and a passenger appeared nervous
during the traffic stop, so officers asked for permission to search
the rig.
According to police, officers found cocaine inside 12 boxes, each
containing about 25 kilograms. The total weight of the drugs is
estimated at 300 kilograms, or 660 pounds. Police charged Francisco Galvan, 36, of Lynwood, Calif., and his
passenger Hector Aquilar-Corona, 37, of Tucson, Ariz.
Aquilar-Corona was charged with permitting an unauthorized driver
to drive and possession with intent to deliver drugs. Galvan is
charged with driving on a suspended drivers license and possession
with intent to deliver drugs.
In a hearing Monday in St. Francis County District Court, bond
for the pair was set at $2 million. Both were still being held
Tuesday.
(Copyright 2004 by The Associated Press. All Rights Reserved.)
[back to top]
Wal-Mart Model Misuses Women
Report Jim Lobe - InterPress
Service News Agency
[back to top]
WASHINGTON, Feb 10 (IPS) - Led by U.S.-based Wal-Mart, the
world's giant retailers are demanding more and faster production
from suppliers, which in turn are bypassing the rights of their
workers, most of them women, says a new report by development agency
Oxfam.
Despite the retailers' claims that they insist their contractors
comply with basic labour standards, their demands for ever-quicker
and cheaper goods are making compliance impossible in many cases,
says the report, 'Trading Away Our Rights'.
"This is where globalisation is failing in its potential to lift
people out of poverty and support development," said Phil Bloom,
director of Oxfam's 'Make Trade Fair' campaign.
"There is a widening gap between the rhetoric of global corporate
social responsibility and the reality of the corporate business
model."
"Many corporations have codes of conduct to hold their suppliers accountable for labour
standards, but their own ruthless buying strategies often make it
impossible for these standards to be met," he added.
The new report, which is based on hundreds of interviews of
workers, factory and farm owners, officials from global brand-name
companies, importers, exporters and union and government officials
in 12 countries, comes amid growing efforts by multinational
corporations to reassure consumers that workers who make their goods
can earn a decent living.
But a spate of recent newspaper articles and studies suggest
these efforts might be undermined by growing competitive pressures
created by the demands of retailers and the ever-growing number of
poor countries that have heeded advice and pressure from
international financial institutions (IFIs) to open their economies
to attract investment and jobs.
"Globalisation has hugely strengthened the negotiating hand of
retailers and brand companies," says the report. "New technologies,
trade liberalisation and capital mobility have dramatically opened
up the number of countries and producers from which they can source
products, creating a growing number of producers vying for a place
in their supply chains."
Wal-Mart, the world's biggest retailer, has led the field in
putting this model into practice, it adds. The company now buys
products from some 65,000 suppliers worldwide and sells to over 138
million consumers weekly through its 1,300 stores in 10 countries.
It has made China, where wages are far lower than anywhere else
in Asia and where workers are denied the opportunity to form
independent unions, the centre of production, a key point made in a
feature article that appeared in the 'Washington Post' on Sunday.
"As capital scours the globe for cheaper and more malleable
workers, and as poor countries seek multinational companies to
provide jobs, lift production and open export markets," the article
said, "Wal-Mart and China have forged themselves into the ultimate
joint venture, their symbiosis influencing the terms of labour and
consumption the world over."
But that marriage, according to both the Post account and the
Oxfam report, has come largely at the expense of the worker on the
factory line. "Wal-Mart pressures the factory to cut its price, and
the factory responds with longer hours or lower pay," a Chinese
labour official who declined to be identified for fear of
retaliation told the Post.
"And the workers have no options."
That was also the message of a report released Monday by the New
York-based National Labour Committee and China Labour Watch, about a
toy factory in Ping Township in Guangdong province that produces
goods for Wal-Mart.
The two groups reported that the mostly female labour force at
the plant were paid only about one-half the legal minimum wage and
forced to work longer hours than the legal maximum. It also reported
that fire exits at the plant were normally locked.
Wal-Mart responded by insisting that it conducts regular
inspections of all of its plants in China, but the groups said that
plant managers were always informed of the visits in advance and
coached workers on what to tell inspectors.
The report is largely consistent with the findings of the Oxfam
study, which put the main responsibility for the worsening situation
on corporate buying teams that pressure suppliers to deliver
"just-in-time" orders at ever-lower prices in hopes of squeezing
maximum profit from goods once they are sold to shoppers in mainly
wealthy countries.
"Today's business ethos is 'make it quick, make it flexible, make
it cheap'," said Bloomer. "Anyone appalled by labour conditions in
the world today should be asking, 'so who turned up the heat'?"
"The workers at the bottom of the global supply chains are
helping to fuel national export growth and shareholders' returns,
but their jobs are being made ever more insecure, unhealthy and
exhausting, and their rights weakened."
To minimise resistance, contractors are employing workers who are
less likely to try to join trade unions in those countries where
they exist. For the most part, these are young women, often migrants
or immigrants, who are easily intimidated if they do not cooperate
with management.
"Jobs in labour-intensive industries are celebrated as empowering
women," according to Bloomer.
"While we welcome the fact that millions of women are getting a
wage, the wage alone doesn't free them from poverty. Instead,
they're being burnt out by working harder, faster, over longer hours
and with few health, maternity or union rights."
"It's a poor strategy for improving women's lives," he added,
noting that IFIs like the World Bank and the International Monetary
Fund (IMF) were complicit in the worsening situation by encouraging
governments to make their labour markets ever more "flexible."
In Chile, for example, 75 percent of women in the agricultural
sector are hired on temporary contracts to pick fruit, and work more
than 60 hours a week during the harvest season, but one-third of
them still make below minimum wage.
Fewer than one-half of the women in Bangladesh garment factories
have a contract, and the majority receive no maternity or health
benefits. Some 80 percent fear dismissal if they complain.
In China's Guangdong province, young women face 150 hours of
overtime each month in the garment factories, but only 40 percent
have a written contract and 90 percent have no access to social
insurance.
Given these kinds of situations, governments must step in to
guarantee workers basic labour rights, including the right to join
trade unions and bargain collectively, says the report.
At the same time, a greater effort must be made to enforce labour
laws, while consumers must insist that retailers do a far better job
of monitoring working conditions to ensure that the jobs they create
in poor countries are not exploitative, it adds.
[back to top]
Group asks Wal-Mart to help protect river. It wants to
change how
retailer stores chemicals
SHARON E. WHITE - Charlotte Observer Staff Writer
[back to top]
February 10,
2004
The Catawba Riverkeeper Foundation wants the public's help as
part of the group's investigation to end a practice by some Wal-Mart
stores.
Riverkeeper officials have requested that Wal-Mart corporate
representatives coordinate a plan for the removal of toxic chemicals
stored in parking lots at Wal-Mart stores near the Catawba River.
The river provides drinking water to 22 towns and cities in the
14 counties of the watershed. More than 1 million people rely on the
river as the primary source of their drinking water.
Riverkeeper Donna Lisenby on Monday said Wal-Mart's corporate
office had not come up with a plan to end the practice.
Wal-Mart spokesman Dan Fogleman said he could not specifically
address the Catawba Riverkeeper's complaint, but the company makes
every effort to comply with all laws and EPA regulations.
"Annually, our stores give back millions of dollars within their
local communities specifically for environmental issues," Fogleman
said. "We take all criticism seriously, and when it's valid, we take
a hard look at our actions and use it as an opportunity to improve."
Lisenby asks that anyone who visits a Catawba River valley
Wal-Mart store in the next 30 days to look for fertilizers,
insecticides, herbicides or fungicides stored where rainwater could
come into contact with the chemicals.
If you spot this, Lisenby asks that you call (704) 373-1916 or
take digital pictures and e-mail to Catawba Riverkeeper Foundation
at donna@catawbariverkeeper.org.
[back to top]
U.S. groups accuse Wal-Mart over Chinese factory
By Grant McCool
- Reuters [back to top]
February 9, 2004
NEW YORK, Feb 9 (Reuters) - Labor rights groups on Monday accused
the world's biggest retailer, Wal-Mart Stores Inc. (nyse: WMT - news
- people), of turning a blind eye to abusive conditions at a factory
in China that makes plastic toys for the company.
The National Labor Committee and China Labor Watch said in a
report that workers at the factory in Chang Ping Township in
Guangdong province were paid less than the legal minimum and worked
longer hours than legally allowed.
A Wal-Mart spokesman said he was not aware of the specific
allegations but that the company worked to ensure factories all over
the world were run legally and inspected for abuses.
The report said the Chinese factory management trained workers to
answer prepared questions and paid them a bonus for remembering them
correctly during visits by Wal-Mart inspectors.
It said emergency fire exits and medical boxes were normally
locked, but the Chinese managers unlocked them ahead of inspections.
They also doctored time cards, the report said.
The rights groups said Wal-Mart appeared to condone the Chinese
management's methods. "No company could be that shallow or gullible,
unless it were consciously acting out a role with the full intent of
achieving the desired result -- a whitewash," the report said.
Bill Wertz, a spokesman for Bentonville, Arkansas-based company,
said Wal-Mart had experienced inspectors who adhered to its
corporate standards.
"It would be a complete violation of our policy for anyone to
participate in any charade that would merely make a pretense of
observing a thorough inspection," Wertz said.
The rights groups said workers received an average 16.5 cents an
hour when the legal minimum in China was 31 cents an hour. The
workweek was seven days when five days was legal and people toiled
for up to 20-1/2 hours per shift.
The groups said the same He Yi Electronics and Plastics Products
Factory produced "bobblehead" sports star dolls for America's major
professional sports organizations through U.S. company Fotoball.
Charles Kernaghan, head of the National Labor Committee, said the
sports organizations -- including the National Basketball
Association, Major League Baseball and the National Collegiate
Athletic Association -- had not responded to his letters.
"We're hitting a stone wall with these people, which is sort of
amazing, given their profits and the salaries ... the players won't
be happy that their images are being made by workers in China with
zero rights," said Kernaghan, who revealed in October that a
sweatshop in Honduras made the clothing line of hip-hop music and
fashion entrepreneur Sean Combs.
Kernaghan said on Monday that Combs' staff had worked with his
group to greatly improve conditions in that factory.
[back to top]
Chinese Workers Pay for Wal-Mart's Low Prices. Retailer
Squeezes
Its Asian Suppliers to Cut Costs
By Peter S. Goodman and Philip P. Pan -
[back to top]
Washington Post Foreign
Service
Sunday, February 8, 2004
SHENZHEN, China -- Inside the factory, amid clattering machinery
and clouds of sawdust, men without earplugs or protective goggles
feed wood into screaming electric saws, making cabinets for stereo
speakers. Women hunch over worktables, many hands bandaged and few
covered by gloves, pressing transistors into circuit boards.
Most of the 2,100 workers here are poor migrants from the
countryside who have come to this industrial hub in southern China
for jobs that pay about $120 a month. A sign on the wall reminds
them of their expendability in a nation with hundreds of millions of
surplus workers: "If you don't work hard today, tomorrow you'll have
to try hard to look for a job."
The calculations driving production here at Shenzhen Baoan Fenda
Industrial Co. are no different from those governing global
capitalism in general -- make more for less -- but it is applied
with particular vigor on this shop floor. Sixty percent of the
stereos coming off the line are for one customer: Wal-Mart Stores
Inc., whose mastery at squeezing savings from its supply chain made
it the world's largest company.
"The profit is really small," said Surely Huang, a factory
engineer, speaking of the 350,000 stereos that Fenda agreed in March
to supply to the retailer for $30 to $40 each. Huang said they sell
for $50 in the United States. "We have to constantly cut costs to
satisfy Wal-Mart."
Yet this factory and thousands of others along China's east coast
have decided, with China's leaders, that the deal is worth the
price. Wal-Mart provides access to vastly more store shelves than
they could ever reach by themselves, a way to build a brand from
Fort Worth to Frankfurt. Meeting Wal-Mart's strict requirements
could improve the factory's efficiency and make it easier to land
contracts from other major retailers.
As capital scours the globe for cheaper and more malleable
workers, and as poor countries seek multinational companies to
provide jobs, lift production and open export markets, Wal-Mart and
China have forged themselves into the ultimate joint venture, their
symbiosis influencing the terms of labor and consumption the world
over.
With sales of more than $245 billion a year, Wal-Mart is the
largest retailer in the United States, still the ultimate consumer
market. China is the most populous country, with 1.3 billion people,
most still poor enough to willingly move hundreds of miles from home
for jobs that would be shunned by anyone with better prospects. The
Communist Party government has become perhaps the world's greatest
facilitator of capitalist production, beckoning multinational giants
with tax-free zones and harsh punishment for anyone with designs on
organizing a labor movement.
More than 80 percent of the 6,000 factories in Wal-Mart's
worldwide database of suppliers are in China. Wal-Mart estimates it
spent $15 billion on Chinese-made products last year, accounting for
nearly one-eighth of all Chinese exports to the United States. If
the company that Sam Walton built with his "Made in America" ad
campaign were itself a separate nation, it would rank as China's
fifth-largest export market, ahead of Germany and Britain.
Back in its home market, Wal-Mart's vast appetite for Chinese
imports has placed it at the center of a sharp debate over whether
the influx of low-cost products from China is good for Americans.
Domestic manufacturers, labor groups and some politicians point
to China's record trade surplus with the United States, estimated to
have totaled $120 billion last year, and accuse Beijing of
manipulating its currency, condoning the exploitation of its workers
and competing unfairly, resulting in the loss of U.S. manufacturing
jobs.
But Chinese officials counter that nearly two-thirds of the
country's exports are shipped from factories wholly or jointly owned
by foreign investors, with Wal-Mart often cited as the prime
example, supplying Americans with a steady flow of low-cost,
high-quality goods.
With its near-religious devotion to the pursuit of "everyday low
prices," Wal-Mart illustrates why U.S.-based multinationals with
operations here have not joined in the chorus for protectionism.
"For the benefit of the consumer, we should buy merchandise where
we get the best value," said Andrew Tsuei, managing director of
Wal-Mart's global procurement center in Shenzhen.
Joe Hatfield, president of Wal-Mart's Asia operations, noted that
many of the goods his company buys in China -- toys, furniture,
textiles and holiday ornaments -- have mostly not been made in the
United States for years. The Bush administration has pressed China
to increase the value of its currency, which some argue makes
China's goods unfairly cheap on world markets. Hatfield rolled his
eyes.
"That would be a travesty to do to the consumer in the United
States," he said. "You do that and the cost of living is going to go
up."
'Better Than Nothing'
For Wal-Mart and other multinational companies doing business in
China, a stable currency, political peace and a compliant workforce
are nearly as important as low costs.
"There might be places in other parts of the world where you can
buy cheaper, but can you get [the product] on the ship?" Tsuei said.
"If we have to look at a country that's not politically stable, you
might not get your order on time. If you deal in a country where the
currency fluctuates, everyday there is a lot of risk. China happens
to have the right mix."
Labor activists in China and abroad say that mix includes the
ruling party's ban on independent trade unions -- workers may join
only the party-run union -- as well as courts and regulatory
agencies controlled by local party officials who are often willing
to overlook labor violations to appease businesses that can be
milked for taxes, fees and bribes.
The activists argue that as Wal-Mart pits suppliers against one
another and squeezes them for the lowest price, the workers suffer.
"Wal-Mart pressures the factory to cut its price, and the factory
responds with longer hours or lower pay," said a Chinese labor
official, who declined to be named for fear of punishment. "And the
workers have no options."
In the city of Dongguan in southern Guangdong province, where
Wal-Mart suppliers are concentrated, a 27-year-old worker who gave
her name as Miss Qin complained that she can rarely afford meat with
her $75-per-month wages at Kaida Toy Co. "Every day we eat
vegetables, mostly we eat vegetables," she said, leaning over a
plate of fried carrots in a dingy restaurant.
Qin helps make plastic toy trains for Wal-Mart, but says she
cannot afford to buy toys for her 9-year-old son. "In four years,
they haven't increased the salary," she said.
Kong Xianghong, the No. 2 official for the party-run union in
Guangdong province, acknowledged that low wages, long hours and poor
conditions are common in factories that supply Wal-Mart and other
U.S.-based corporations.
"It's better than nothing," he said. "Labor protections, working
conditions and wages are related to a country's level of economic
development. Of course, we want better labor protections, but we
can't afford it. We need the jobs. We need to guarantee people can
eat."
Still, Kong said, the party-controlled union has been frustrated
that Wal-Mart has refused for three years to allow it to set up
branches in the 31 Wal-Mart stores in China -- even though he has
assured the company that the union wouldn't help workers struggle
for better pay. Wal-Mart has also fought efforts to unionize its
U.S. stores.
Low Prices, High Cost
Wal-Mart's China headquarters is a monument to its frugality -- a
low building covered in white tile. The linoleum conference table is
pockmarked with gaps where the plywood shows through. Tea is served
in plastic cups. In Hatfield's office, where he presides over
Wal-Mart's Asia operations, the rusty window frame is open, the
sound of car horns washing in from the street.
Wal-Mart portrays itself as a force for good in China. The
company says it enforces labor standards for its suppliers and
insists that they comply with Chinese law.
"We look at safety. We look at health, and this comes with a
cost. We ensure people get paid above minimum wage. They have to
have fire extinguishers, fire exits," Tsuei said. "There are people
out there who cannot have those things and offer a lower price. We
do not do business with those people."
Wal-Mart employs 100 auditors who annually inspect every
supplier's factory. Last year, the company suspended deals with
about 400 suppliers, primarily for exceeding limits on overtime,
Tsuei said. Another 72 factories were blacklisted permanently last
year, he said, almost all for employing children under China's legal
working age of 16.
But Wal-Mart does not conduct regular inspections of smaller
factories that sell goods to the company through middlemen. Nor does
it inspect all its suppliers' subcontractors or the Chinese
manufacturing operations of U.S. suppliers such as Mattel Inc. and
Dell Inc.
"The inspection system is not effective," said Li Qiang, a labor
organizer who has been in contact with workers at more than a dozen
factories that supply Wal-Mart, and who worked in one himself before
leaving China three years ago. "The factories are usually notified
in advance, and they often prepare by cleaning up, creating fake
time sheets and briefing workers on what to say."
Li said these factories often require employees to work as many
as 80 hours per week during the busy season for $75 to $110 per
month, violating Chinese labor laws. If Wal-Mart really wanted to
monitor conditions among its suppliers, Li said, it could do so with
surprise visits, longer inspections and independent auditors. "But
if they did that, prices would definitely go up," he said.
Suppliers Find a Big Market
Wal-Mart is such a big player in China that it does not have to
go looking for suppliers; the suppliers come to them, jamming a
reception area at the procurement center.
Yu Xiaoma of Guangzhou Kangaroo Leathers Co., which makes
handbags and wallets for Wal-Mart and other multinationals, said:
"You can't make much money from Wal-Mart. They demand the lowest,
lowest price."
Amy Gu, vice manager for exports for Goodbaby Corp., which makes
baby strollers near Shanghai, said the company sometimes takes
orders to supply Wal-Mart at or below cost through a partnership
with a Canadian distributor, Dorel Industries Inc. "Dorel will tell
us, 'Well, Wal-Mart has given us this price, we need a factory cost
of this much,' " Gu said. "And we have to find a way to deliver it."
Wal-Mart says such arrangements benefit both sides. Hatfield said
the company has made distribution more efficient and fair by cutting
out middlemen and resisting corruption. In a country where
transportation remains unreliable, Wal-Mart's distribution network
has given manufacturers access to customers around the country and
the world.
He touted the case of a Guangdong factory that began supplying
Wal-Mart stores in Shenzhen with a drink made of milk and egg yolk,
delivering 25,000 units the first month.. It proved popular. By
September, Wal-Mart was shipping 1 million units a month across
southern China.
"They can just drop it at our distribution center and we take
care of the rest," Hatfield said. "Now it's a national brand."
Yet those who run the factory that produces the drink, Weijiasi
Food & Beverage Co., say they haven't yet shared in the success.
"In the beginning, we made money," said a manager reached by
telephone, who gave his name as Mr. Li.
"But when Wal-Mart started to launch nationwide distribution,
they pressured us for a special price at below our cost. Now, we're
losing money on every box, while Wal-Mart is making more money."
Special correspondent Wang Ting contributed to this report. 2004
The Washington Post Company
[back to top]
Wal-Mart controversy nears vote in East Bay - Measure L
enacts
ban on supercenters
Erin Hallissy, Chronicle Staff Writer, SF
Chronicle
[back to top]
Sunday, February 8, 2004
Wal-Mart, loved by its shoppers for "always low prices'' and
reviled by critics who claim it exploits workers and manufacturers,
didn't get to be the world's wealthiest corporation by backing down
from a fight.
Next month, it faces a critical showdown in Contra Costa County
that could influence its plans to introduce in California its
sprawling supercenters -- vast combination grocery and discount
stores that sell everything from milk and meat to firearms and
fabric in buildings as large as five football fields.
The county's board of supervisors decided last year to ban the
supercenters from unincorporated areas, saying they would choke
traffic and worsen sprawl, but Wal-Mart gathered enough signatures
to qualify the issue for a referendum. Voters in the East Bay county
will decide the matter, Measure L, on March 2.
"I don't think either side will tell you it's going to be a cheap
election,'' said Wal-Mart spokeswoman Amy Hill, acknowledging that
the company had contributed about $500,000 to the No on Measure L
campaign before the end of January and could easily spend more than
$1 million. "Anything is possible.''
The high-stakes election is the first in the state since Wal-Mart
announced its plans last year for 40 supercenters in California. A
smattering of cities and counties have passed bans on the
mega-stores, but Wal-Mart chose to take on lawmakers in Contra
Costa, often considered a bellwether county because of its
demographic similarity to the state as a whole.
Supporters of the ban say that along with increasing traffic,
supercenters stamp out competition and lead to thousands of lost
jobs and lower wages. Wal-Mart's expansion plans contributed to the
long-running grocery strike in Southern California, with chains like
Safeway and Albertson's saying they can't compete with Wal-Mart
unless they slash wages and benefits.
But Wal-Mart, which had more than $245 billion in sales last
year, says that consumers have the right to shop where they want and
that they deserve grocery prices that could be 15 percent lower than
supermarket prices.
Lee Jensen, a 70-year-old Martinez resident who was shopping at a
regular Wal-Mart in that city last week, said he has mixed feelings
about the supercenters.
"I'm on social security and my wife wants to retire,'' he said.
"They have really reasonable prices. On the other hand, I don't like
cutthroat operations.''
Supporters of Measure L, who include elected county officials,
community members, environmentalists, the United Food and Commercial
Workers Union and Safeway, say the ordinance does not single out
Wal-Mart but instead applies to any non-membership store larger than
90,000 square feet that devotes more than 5 percent of its floor
space to selling non-taxable groceries. They say that without sales
tax revenue, they can't make the road improvements needed to handle
increased traffic and other related impacts that the huge stores
would have.
"Local government should have a right to plan where and how
big-box stores come into their communities and not leave it totally
up to the developer,'' said Supervisor John Gioia of Richmond. "This
is a battle in a larger war over who controls development in a local
community.''
Wal-Mart insists it's being discriminated against, although
proponents of the law say Target and Sears would also be affected if
they tried to build supercenters here. Wal-Mart has more than 1,400
supercenters in 42 other states that are between 175,000 and 250,000
square feet and devote about 30 percent of their floor space to
groceries. Large Bay Area Safeway stores, by contrast, are about
55,000 square feet.
Hill said Wal-Mart does not have any plans to open a supercenter
in Contra Costa County, but the retailer believes it is "in its best
interest'' to fight the ban.
"We certainly do not believe these ordinances are legal,'' Hill
said. "At the end of the day, the ultimate goal is to have the
consumer choose where to shop.''
Consumer choice has become the campaign slogan for the opposition
to Measure L, which is peppering households with flybaers saying
Measure L would unfairly restrict Wal-Mart from selling goods at
lower prices to working families.
Walnut Creek Councilman Charlie Abrams, who is opposing Measure
L, said he doesn't think the county should ban big-box stores in
unincorporated areas, although he acknowledged it was unlikely that
Wal-Mart would be able to build a supercenter in his upscale town.
"It's government interfering in consumer choice,'' Abrams said.
"It's clear that the unions are behind this and are using the
supervisors to steer this against Wal-Mart.''
Gioia said Wal-Mart and its proponents are being deceptive when
they try to say the issue is a right to shop.
"They know they lose on the development issue,'' Gioia said.
"They act like they are representing consumers, but Wal-Mart's
interest is the bottom line. Their interest is in getting bigger,
making more money. It's not in good community planning.''
While Wal-Mart has chosen to force a referendum on the county's
ordinance in Contra Costa, it is trying different tactics in
different communities to overturn new big-box ordinances. It did not
challenge big-box prohibitions in Martinez and Oakland; it sued
Alameda County. In April, it is asking voters in Inglewood (Los
Angeles County) to approve a supercenter that the Inglewood City
Council turned down. In San Marcos (San Diego County), Wal-Mart
tried unsuccessfully to stop a March referendum by voters wanting to
overturn their city council's approval of a regular Wal-Mart store.
Hill said efforts to block Wal-Marts are taken seriously by the
store, which has also sued or gone to the ballot box in other
states, with mixed results. She said community resistance to the
chain is not "epidemic,'' and that at least in Contra Costa County,
unions and competitors like Safeway are the major opposition.
Wal-Mart, however, has become one of the most reviled retail
chains in the country even as its business has grown to the point
that it's the nation's largest seller of everything from toys to dog
food. Sites critical of Wal-Mart number more than 2,000 on the
Internet, and opponents are passionate in fighting the company,
which they paint as a heartless employer whose business tactics
destroy communities.
"Wal-Mart is choosing to come in with these huge windowless
pieces of architecture,'' said Al Norman, a Massachusetts resident
who runs the Web site sprawl-busters.com and has fought the chain
throughout the country since leading a successful campaign to block
Wal-Mart in his hometown of Greenfield. "They're saturating the
American landscape. Folks are poorly paid and poorly covered by
benefits. Wal-Mart is just a chain of exploitation. It stretches
from the sweatshops of China to the sales floor in California.''
U.S. Rep. George Miller, D-Martinez, who is endorsing Measure L,
also criticized Wal-Mart for "predatory'' business tactics.
"They want to put in place a business plan that undercuts other
businesses in the county,'' Miller said. "It certainly undercuts the
wages of other workers. It brings with it a long list of violations
of labor laws, of workers' rights. I don't think that's good for our
economy.''
Miller and county officials also contend that Wal-Mart workers
could also be a drain on county health resources because the company
doesn't offer adequate health insurance, an allegation Wal-Mart
disputes.
"It's a crazy, ludicrous argument,'' Hill said. "It's crazy to
insinuate that all Wal-Mart associates are going to be burdening the
county.''
She said more than 90 percent of Wal-Mart workers have health
benefits, including more than 40 percent who get it not through the
company but through other means, such as a spouse who is employed
elsewhere.
Hill said the main issue is competition.
"Competition drives down the cost and the consumer is the
winner,'' Hill said. "We are not going to apologize for that.''
[back to top]
Jurors begin Wal-Mart pay deliberations
The Oregon damages case
is the first to reach a jury of more than 30 overtime suits across
the U.S.
BRENT HUNSBERGER - The Oregonian - Business News
[back to top]
February 7, 2004
Attorneys for Wal-Mart and 100 of its current and former workers
in Oregon wrapped up arguments Friday in an overtime pay dispute
that could affect more than 30 similar lawsuits pending elsewhere
against the nation's largest retailer.
A seven-person Portland jury began deliberating Friday afternoon
on exactly how much the nation's biggest retail chain owes to 108
Oregon employees who say they were forced to work additional hours
without overtime pay. The disputed periods were as long as a decade
ago in some cases.
The four-week-long damages portion of the case ended Friday in
U.S. District Court in Portland. The Oregon case is the first to go
to a jury for damages.
More than a year ago, in the first phase of the trial, a Portland
jury found the nation's largest retailer had willfully permitted
employees to work "off the clock" between 1994 and 1999 at 18 Oregon
stores.
Neither side estimated what the total amount of payments could be
for Wal-Mart. Attorneys declined to comment Friday because of a gag
order imposed by Judge Garr King.
The case involves store associates, department managers, night
stockers and others who claim to have worked as much as 20 hours a
week without pay.
"Justice in this case will be inexact," James Piotrowski, an
attorney representing the workers, said during closing arguments.
"But rough justice is better than no justice at all."
Wal-Mart operates 27 stores in Oregon. Nearly 400 workers joined
the case after it was filed in 1998, but the court allowed only 108
claims to proceed to the damages phase.
In closing arguments, Piotrowski said Wal-Mart "ignored, violated
and betrayed" what he called the nation's bedrock principle of work
as it amassed a retail network that netted $8.04 billion last year.
Some of his clients, he said, clocked out and kept working to
avoid reprimand for working more hours than scheduled. Others
skipped lunch or were locked in the store after closing.
Wal-Mart, in its defense, called more than 80 witnesses during
the trial in an attempt to discredit the workers' testimony and cast
doubt on the accuracy of their memories.
Rudy Englund, the company's lead attorney, argued that the
plaintiffs' claims were "generalized, unrealistic and exaggerated,"
noting that several plaintiffs used the word "guess" in estimating
their hours owed.
One plaintiff, Englund said, admitted to playing Nintendo while
working off the clock. "The pin has gone into the balloon, and it has burst," said
Englund.
Each member of the jury was given multipage forms to approximate
week-by-week how much each plaintiff is owed. Englund spent 15
minutes of his closing arguments instructing the jury how to fill
out the form.
Jurors appeared eager to end the case. Shortly after noon, King
asked them whether they wanted to break for lunch or proceed. They
voted to skip lunch.
Jurors are scheduled to resume deliberations on Monday.
Before they headed for the jury room, King warned them not to
talk to anyone else about the case.
"Don't do any investigation on your own," he said. "And whatever
you do, don't go to a Wal-Mart store."
[back to top]
THE SAFEWAY STRIKE in Southern CalifornIA
By Tony Martarella -
Walnut Creek Journal
[back to top]
February 5, 2004
THE SAFEWAY STRIKE in Southern California is going to effect all
of us here in the Bay Area sooner or later, in one way or another,
like it or not. In fact, last week's demonstration in Alamo is
evidence it has already begun.
What this conflict boils down to is Wal-Mart. Safeway management
is correct in saying they can't compete with the big box grocery
suppliers, such as Wal-Mart.
But taking away worker benefits is a counterproductive solution.
There is a better solution: eliminate the cause of the problem, take
away Wal-Mart. And that is exactly what Measure L will do.
Safeway management and union management know that for every big
box, non-taxable, grocery supplier, the surrounding area will lose
approximately 2.5 to 3 local neighborhood grocery stores like
Safeway and Albertson's.
Wal-Mart's consistent strategy, for every store, is to eliminate
the competition with "predatory pricing." Once the competition has
been eliminated the prices are raised to "competitive pricing." And
what is competitive pricing when there is no competition? It is
whatever they want it to be, whatever they can require you to pay.
It wasn't very long ago that I looked upon unions and unionism as
the cause of lost jobs in America, and the cause of inflation
whenever it occurs. I also saw the union as undermining productivity
and bleeding the system of resources.
Keep in mind, I am still not a union member. However, it didn't
take an awful lot of research to learn that virtually every
advancement in pay increases, employee benefits and worker
protections came from the striking power and sacrifices of union
members.
Every time a union member goes out on strike to fight for higher
pay, to preserve their benefits and promote better working
conditions -- and they win -- every worker wins, union or not. When
they lose, we all lose.
So I decided it was time for me to support the ideals of
unionism, because when they win, I win. I am also supporting Measure
"L" to protect our neighborhoods, our taxes and our jobs.
Tony Martarella lives in Walnut Creek.
[back to top]
Wal-Mart may convert store in Fresno into a supercenter
Sanford Nax - THE FRESNO BEE
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5 February 2004
Retail giant Wal-Mart may convert its southeast Fresno store into
a much-larger supercenter, the kind of expansion that has stirred
opposition in other communities in California.
Wal-Mart and the shopping center's owner have applied for a
conditional-use permit to expand the 125,800-square-foot store into
a 209,400-square-foot supercenter, the first in Fresno. A
supercenter would add a full-service grocery store department,
creating more competition for grocery stores in the area but also
providing hundreds of new jobs.
Wal-Mart spokesman Peter Kanelos said the company has not made a
decision on the project. "We're keeping our options available," he
said.
The Fresno City Council must approve the proposal for expanding
the store at Kings Canyon Road and Adler Avenue.
Council Member Mike Dages, who represents the district, said he
would not support the expansion. He said the supercenter would
compete with FoodsCo and Food Maxx, both of which are about a mile
away. "A third means one of them won't make it," Dages said. "Three
discount supermarkets are too much."
He added that the property is too small for a supercenter. Dages
said a ponding basin may have to be covered or moved, and he does
not want a supercenter to interfere with Trolley Creek Park, which
is being built behind the shopping center. Steve Pilibos, who owns
the Wal-Mart property, donated the park site.
Wal-Mart is aggressively expanding its supercenter concept,
planning to open 40 in California during the next four years. The
first opens March 3 in La Quinta, just outside of Palm Springs.
Other supercenters have been discussed for Hanford, Lemoore,
Selma and Visalia.
Resistance common
But the nation's largest retailer has been encountering
resistance from many communities that fear a Wal-Mart selling
groceries could hurt established businesses, especially grocery
stores offering higher wages to workers.
Wal-Mart employees are not unionized, and its stores generally
pay lower wages than employees of grocery chains, many of whom are
represented by labor unions.
Several communities, including Oakland, Paso Robles, Turlock and
the unincorporated regions of Contra Costa County, have passed
ordinances limiting grocery sales in big discount stores. Los
Angeles is considering a similar ordinance.
Council Member Tom Boyajian said he would support the same type
of resolution in Fresno.
Boyajian said the introduction of a Wal-Mart supercenter would be
an "injustice" to existing businesses that pay relatively good
wages. He also fears Wal-Mart would squash competing supermarkets
and cause more building vacancies.
"What are we saying to businesses that are already here?" he
said.
Fellow Council Member Jerry Duncan said he could not support a
blanket ban on such projects but would consider them on a
case-by-case basis. "If the superstore was such a bad idea no one
would shop there," he said.
Duncan said he does not know enough about the proposal to take a
position.
Opposition in Clovis
Wal-Mart also faces a fight in Clovis, where developer Dave
Paynter is proposing a shopping center on Herndon Avenue. Paynter
also redeveloped the shopping center on Kings Canyon Road that
contains FoodsCo.
Paynter said he is not worried about an expanded Wal-Mart on
Kings Canyon Road.
"I believe in the free enterprise system and we also have to be
competitive to stay in the marketplace," he said.
"Our center and the tenants will be competitive."
Save Mart wary
But executives at Save Mart, which operates Food Maxx, a block
from FoodsCo, are less comfortable with the prospect of a new
competitor.
Company Vice President Jim Watt said sales volumes at both of
those stores are good, but may erode if a third grocery retailer
enters the mix.
"How much you can split that pie remains to be seen," Watt said.
"Three is a crowd."
Save Mart has opposed other attempts to open Wal-Mart
Supercenters in other communities.
"We have spoken in opposition when we feel it is a case of
overstoring a trade area," Watt said.
The pending clash between Wal-Mart Supercenters and traditional
supermarkets is a factor in the continuing strike in Southern
California where grocers, hurt by competition from the mammoth
discount retailer, are seeking concessions from unionized workers.
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Wal-Mart leads D-FW grocery sales It's the discount
retailer's
first top 10 market
By MARIA HALKIAS - The Dallas Morning News
[back to top]
Thursday, February 5,
2004
Wal-Mart Stores Inc. has become the No. 1 seller of groceries in
Dallas-Fort Worth, taking the lead in a top 10 U.S. market for the
first time, according to data released Wednesday.
While the discount giant has been the largest U.S. food retailer
for a couple of years, dominating small and medium-sized towns such
as Rogers, Ark., and Oklahoma City, it has been slower to capture
the major markets.
Wal-Mart did it in D-FW against the Big Three - Kroger Co.,
Albertsons Inc. and Safeway Inc. - along with a host of others. It
took the company about six years to rise from No. 6.
Wal-Mart's market share in the Dallas-Fort Worth-Arlington area
is 25.1 percent, according to the 2004 edition of Market Scope, a
publication of TradeDimensions International Inc.
No. 2 is Albertsons with 17.6 percent, followed by Safeway's Tom
Thumb with 15 percent, Kroger with 12.7 percent, Minyard Food Stores
with 9.1 percent and Target Corp.'s SuperTarget with 3.9 percent.
Albertsons was the leading grocer last year in Dallas with a 19.4
percent share and in Fort Worth-Arlington with 20.3 percent when
Market Scope measured the markets separately.
Wal-Mart's ascent was forecast last year when it was No. 3 in
both Dallas and Fort Worth-Arlington, but the size of the leap was
surprising, some analysts said.
"Everyone was predicting it would happen, but no one expected
they would blow past them. I think this is going to be a real
wake-up call to a lot of other retailers," said Mitchell J.
Rosenbleeth, vice president at Booz Allen Hamilton in Dallas.
Wal-Mart's past demographics have been rural and suburban, he
said, "but now we're seeing that their advantages are even more
pronounced when they're in urban demographics."
Wal-Mart spokeswoman Karen Burk didn't address the company's
progress in the region.
"We focus on building one customer at a time," she said. "It's
always going to be our focus no matter where we are."
Houston's next
Houston is probably the next major market where Wal-Mart will
take the top spot.
Kroger is No. 1 with a 24.5 percent share, Market Scope says, but
that's a slim lead over Wal-Mart's 23.8 percent.
It is not obvious that one out of every four grocery dollars
spent in Dallas-Fort Worth is going to Wal-Mart. Most area residents
do their grocery shopping at traditional supermarkets, which anchor
neighborhood strip centers and stand at major suburban
intersections.
"One Wal-Mart Supercenter can equal many traditional Kroger or
Tom Thumb stores in volume. So while we don't see them on every
corner, they command a big food share," said Al Meyers, vice
president at industry research firm Retail Forward Inc.
A time-saver
Deshonda Bradford of Dallas said she wasn't surprised that
Wal-Mart moved into the top spot.
"The best thing they did was to open Supercenters in 1992. I go
there and can get general merchandise and groceries and write one
check. That saves me time."
Dallas was the first top 10 market where Wal-Mart built its
Neighborhood Market stores, and before that, its Supercenters.
"The Supercenter is the single-most-important trend in retailing
during the last 30 years," Mr. Meyers said.
The Neighborhood Market concept is being tweaked, he said.
"They'll roll it out when they're happy with it," he said. "Aging
baby boomers aren't going to want to plow through a
220,000-square-foot Supercenter all the time. The Neighborhood
Market fills a need."
Wal-Mart has expanded its U.S. grocery and drug sales at an
average pace of 17 percent annually over the last five years,
compared with 3 percent for supermarkets and 9.1 percent for
drugstores.
Retail Forward predicts that Wal-Mart's U.S. grocery and drug
sales will top $162 billion in 2007, compared with $82 billion in
2002.
In D-FW, 22.1 percent of Wal-Mart's market share is from 43
Supercenters, and 3 percent is from 17 Neighborhood markets.
Neighborhood markets are about 40,000 square feet, or 25 percent
smaller than a Kroger Signature Market or a newer Albertsons store;
they are designed to meet customers' needs in between visits to the
massive Supercenters.
Including Sam's...
The Market Scope results do not include grocery spending at
warehouse clubs, drugstores or convenience stores. Wal-Mart's total
market share probably approaches 30 percent if its Sam's Clubs are
included, said Dr. Edward J. Fox, director of the J.C. Penney Center
for Retail Excellence at Southern Methodist University.
Wal-Mart's market share probably will climb as its Neighborhood
Markets mature.
"It takes about seven years for a supermarket to ramp up its
sales," Dr. Fox said.
Albertsons, based in Idaho, took the Dallas market lead from Tom
Thumb in the late 1996.
Last week, Albertsons said it replaced the top executive in its
D-FW division and was eliminating layers of management over its 103
area stores.
The chain, which had been on a fast expansion track, plans to
open just one store in the area this year.
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City hangs onto Wal-Mart's $1.5m
By JEFF NAGEL
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February 4, 2004
CITY officials are refusing to release nearly $1.5 million to
Wal-Mart until the big box store does more of what it has promised.
"I have informed Wal-Mart today I will not be releasing any of
the $1.5 million we have," development services director Marvin
Kwiatkowski told city council Jan. 26.
The nearly $1.5 million the city has consists of a $979,000
letter of credit from Wal-Mart to guarantee it would pay its share
of highway improvements, $350,000 the city has promised to
contribute to the cost of the new intersection in front of its
store, and a $143,000 bond the store put up to guarantee landscaping
work gets done.
Council passed a resolution Jan. 26 endorsing the measure after
neighbours complained that few promises have been kept in the
development of the big box store.
"We made accommodation after accommodation after accommodation,"
said Haugland Ave. resident Melissa Munn, adding residents trusted
the company would fulfil its pledges.
"They lied to us. They are duplicitous and they lie. They don't
show any regard for this city."
Landscaping around the building and the development of a new
riverside trail to replace parkland the city gave up for the store
are the biggest unresolved items directly connected to the money.
"They have done zero work none on that trail," Munn said. "We
would ask that zero dollars be released to them until this work is
done."
Kwiatkowski says it's probably best the landscaping work is
waiting until spring, adding he doubts it would have been done well
had the company rushed it through in the fall. A further $20,000 in
highway work is unfinished, he added.
Residents at the Jan. 26 meeting also recounted a long history of
problems during the store construction.
Munn said those ranged from repeated noise violations when work
went later than regulations permit, to an assault on her husband,
when he complained about the noise, to excessive construction
garbage.
Munn said developers removed far more trees than were agreed to
at the rear of the building near residents' back yards, adding an
area marked "undisturbed tree area" now has a 40-foot clearing in
the middle of it.
"I can't even tell you how depressing it is," she said. "They
have not minimized the impact they've done just the opposite."
Kwiatkowski said excessive garbage was largely cleaned up after
he threatened to place a stop-work order on construction.
He said he also issued two fines of $250 and then $500 to
contractor Dominion Canada for noise violations last fall and was
threatening to seek a court injunction when the noise died down
largely because exterior work had been completed. The fines have not
yet been paid. "I've had to pull out all the stops to get some
action on these issues," Kwiatkowski told council.
He said most of the problems resulted from contractors cutting
corners to meet Wal-Mart's insistence the store be ready for
occupation in early December.
Now that the store is open, its bright lights and the noise of
its trucks have become the main irritants for neighbours.
They were promised lights wouldn't shine into their back yards,
said Kwiatkowski and he's now asked the store to use dimmer lights
and add shielding to fixtures at the rear of the building.
Munn said Wal-Mart's lights are so bright she can recognize
objects on her neighbour's countertop from the street when the house
lights are off.
Kwiatkowski said he will insist those lights stay off until a
solution acceptable to the neighbours is found.
But Linda Lee, whose house at 2810 Cramer St. is between Wal-Mart
and the Real Canadian Wholesale Club, says her house remains lit up
all night from the lights at the front of the store.
"You don't have to turn on a single light in
the house," Lee said. "It's like we have another airport in
Terrace from where we live." She also said her house vibrates from refrigerated trucks that
arrive at Wal-Mart in the middle of the night. "It's a feeling not just a sound," Lee said. "It literally goes
right through your body."
Mayor Jack Talstra said those trucks can be extremely noisy.
"Something has to be done," he said. "Maybe they don't have to roll
in here at 3:00 in the morning."
Kwiatkowski met with company officials Jan. 29 after the store's
grand opening and said he's optimistic much can be resolved.
He would not say what must be done before the city will release
some or all of the money it's holding.
"At this time we have it all and that's all I'm going to say," he
said.
Wal-Mart widens political reach, giving primarily to GOP By Jim
Hopkins, USA TODAY February 04, 2004
Wal-Mart (WMT), the USA's biggest company, is beefing up in a new
area: politics. Wal-Mart is No. 2 among top campaign givers in the
2004 federal elections.
It has rocketed to No. 2 among top campaign givers in the 2004
federal elections. Four years ago, it didn't rank in the top 100,
says the Center for Responsive Politics, a non-partisan watchdog
group.
Republican candidates are the big winners in this year's
election. They received about 85% of the company's contributions,
including those of its political action committee, employees and
children of founder Sam Walton.
Wal-Mart's rise is significant because of the impact it might
have on congressional debates about health care, labor and other
hot-button regulatory issues, says Larry Noble, the center's
executive director.
"They're clearly making a move," he says.
The company has more than $250 billion in annual revenue. (No. 2
is General Motors, with $187 billion in annual revenue.) Wal-Mart is
also the USA's biggest private employer, with 1.2 million workers.
But unions say Wal-Mart's push to keep costs low is driving
thousands of factory jobs overseas. It's facing a potentially costly
sex discrimination lawsuit from female workers. Plus, a federal
grand jury is investigating claims that Wal-Mart cleaning companies
used illegal immigrants.
Wal-Mart denies the sex discrimination claims. It says it is
innocent in the case of illegal immigrants. Still, the growing
criticism has tarnished the company's image, and helped spur its
leap into Washington. "Our voice wasn't there to be heard," says
company spokesman Jay Allen.
It's now being heard through:
Campaign donations. Wal-Mart's political action committee and
employees have given about $1 million in the 2004 elections so far
almost entirely to congressional candidates. Just $5,000 went to
President Bush, and none to Democrats seeking the White House a
trend underscored Monday in campaign finance data released by the
center. Bush's No. 1 donor to date: Merrill Lynch's (MER) PAC and
employees. They gave $432,104 of the $132 million Bush raised.
Wal-Mart gives to pro-business candidates, without expectations,
Allen says. "There are no quid pro quos," he says.
Walton's children are big givers, too. Wal-Mart Chairman Rob
Walton last year gave $25,000 to the National Republican
Congressional Committee. His brother, John Walton, gave more than
$150,000 to Republican causes since 2000. Their sister, Alice
Walton, gave more than $100,000 in the same period.
Lobbying. Wal-Mart has five staff lobbyists in Washington up
from one when it opened its office there in 1999.
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Wal-Mart locked in janitors, lawsuit alleges
Minneapolis Tribune
- Associated Press
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February 3, 2004
NEWARK, N.J. -- A civil rights suit filed against Wal-Mart by
illegal immigrants was expanded Monday to accuse America's biggest
retailer of locking its janitors inside stores during their shifts.
The amendment to the lawsuit comes as a federal grand jury in
Pennsylvania weighs evidence to determine whether Wal-Mart will face
criminal charges in the use of illegal immigrants to clean its
stores.
A lawyer for Wal-Mart denied the new allegation.
INS agents raided Wal-Mart stores across the country on Oct. 23
in a sweep that resulted in the arrest of hundreds of janitors on
immigration charges.
Among those arrested were the 17 named plaintiffs in the civil
suit, including 11 Mexican immigrants who were the original
plaintiffs, plus six Eastern Europeans added to the list Monday. The
lawsuit seeks class-action status for perhaps thousands of
immigrants.
The suit claims some workers were forced to work seven-day,
70-hour weeks for $1,500 a month. The amended claim follows a report
in The New York Times that contained the separate allegation that
janitors were being locked in.
The lawsuit is being brought under the federal Racketeer
Influenced Corrupt Organizations Act, charging that Wal-Mart
systematically violated workers' rights and tried to shield itself
from liability by using independent contractors to employ the
immigrants.
David Murray, a lawyer for Wal-Mart, said the allegations were
``absolutely incorrect.''
Murray said concern for workers' rights was the reason the chain
eliminated the use of cleaning contractors in 80 percent of its
stores. Wal-Mart has 3,500 stores nationwide with 1.2 million employees.
Murray acknowledged that doors were kept locked, but insisted
that a manager with a key was always present. ``This was simply an effort to keep the employees safe and keep
the merchandize secure,'' Murray said.
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Price of doing business with Wal-Mart is high
By Dan Gillmor -
Mercury News Technology Columnist
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February 1, 2004
Let me say it up front: I don't like Wal-Mart.
Among other things, I don't like the giant retailer's
robber-baron business practices, or its treatment of employees. I
don't like the small-town wreckage it has left in its wake, or the
way it has forced suppliers to move jobs offshore.
But Wal-Mart's customers enjoy what comes from such policies: a
big selection and low prices. And Wal-Mart's management and
shareholders love the huge profits.
This is an ongoing American conundrum. We look for the best deal
today, whether it's in our best interest tomorrow, sometimes because
we have no realistic other choice.
But I wonder if Americans generally appreciate what kind of
enterprises they are enriching, or what sterile economic seeds they
may be sowing for our collective future.
Journalists at major publications have recently done some
productive digging into Wal-Mart's methods. They've found enough to
reinforce a queasy distaste I've had for the company for years, and
to convince me that several Northern California counties and cities
are right to try to keep out even larger mega-stores.
I got my first close-up look at Wal-Mart in the 1980s, when I was
writing about the rural economy for a Missouri newspaper. The
retailer was a rampaging giant even then.
It would move into a community and basically suck away what
economic vitality had existed in the surrounding towns. Where there
had once been activity on Main Streets, now there were empty
storefronts and few pedestrians -- a neutron-bomb effect.
Then, as now, Wal-Mart brought some value to its customers. Many
of those decimated downtown business districts had been controlled
by a few merchants who carried so-so goods and sold them at high
prices.
In some ways, then, those Main Streets earned their fate. But
when Wal-Mart was finished, it had captured not just most of the
vicinity's retailing but also the bulk of the profits -- and the
money didn't stay in the towns where the profits were being made.
They went back to Arkansas and to shareholders. Local economies
suffered, but raw capitalism won.
Like all successful enterprises, Wal-Mart has made moves that are
smart by any reckoning. It has been a genuine innovator in the use
of technology to handle its inventory and purchasing. Long before
most other big retailers had a clue, for example, Wal-Mart stores
were connected electronically via satellite and other modern data
systems. (I also have a soft spot for any company that sells
personal computers pre-loaded with the Linux operating system, as
Wal-Mart does when so many other retailers are cowed by Microsoft to
sell Windows-only machines.)
The Wal-Mart never-ending drive for low prices is also
fundamentally admirable. That's what we want, and competition is
essential.
In recent years though, Wal-Mart's relentlessness has gone too
far.
The virulently anti-union retailer pays low wages and offers poor
benefits for a company of its size and profitability. When employees
who can't afford its health insurance have serious health problems,
the public ends up footing the bill for their care, the Los Angeles
Times reported in a recent series about Wal-Mart's oversize impact.
In effect, our taxes subsidize the Wal-Marts of our nation.
Some communities have said no to the invasion of the ``big box''
retailers, though Wal-Mart seems to be the most reviled. The company
is suing Alameda County for blocking one of the dozens of
``supercenter'' stores, combining retail goods with groceries, that
the company plans to open around California. Meanwhile, Measure L,
on the March 2 ballot in Contra Costa County, would uphold an
ordinance there restricting the big-box stores; I hope the county
votes ``Yes'' on the measure despite the mega-bucks Wal-Mart is
pouring into an anti-L campaign.
The threat of Wal-Mart's latest elephantine stores has led
grocery-chain managers, who've never been generous with pay and
benefits to begin with, to push for employee givebacks. A bitter
grocery-worker strike in Southern California has been one result.
In December, Fast Company magazine looked at the ``Wal-Mart You
Don't Know'' -- its relationship with suppliers. Low prices ``often
come with a high cost,'' the magazine observed. ``Wal-Mart's
relentless pressure can crush the companies it does business with
and force them to send jobs overseas.''
America is about to have a great debate over its economic future.
Wal-Mart is just one part of a phenomenon now called ``offshoring,''
the departure of jobs to distant lands, a trend that's been building
for years. The new wrinkle is that white-collar folks are suddenly
feeling the pain, where in the past the losses were mostly among
blue-collar workers.
I don't have a magic solution; in fact, I suspect America is in
for a generation or more when children do worse than their parents.
I can afford not to shop at Wal-Mart, and I don't. I'd rather pay
a little bit more from a retailer that at least seems to possess
more of a social conscience. I also know that many people believe
they don't have this choice, or are convinced that even the most
predatory kind of capitalism ultimately produces the best result.
We all love low prices. But the price our society pays for
Wal-Mart's benefits strikes me as being higher than it's worth.
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Wal-Mart's Costs Can't Always Be Measured
Michael Hiltzik: Golden State - Los Angeles Times
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February 2,
2004
If Wal-Mart Stores Inc. is famous for anything, it's the ruthless
way it wrings the last few pennies of cost from every transaction.
So last week, when the Los Angeles County Economic Development
Corp. released a study finding that the expansion of Wal-Mart's
grocery business into Southern California would be, on balance, a
great thing, my first reaction was that the company had purchased
the LAEDC's reputation cheaply for the $65,000 it paid for the
study.
But to be fair, LAEDC's team, headed by Gregory Freeman, its
director of policy consulting, did a responsible job with what data
it had, much of which was provided by Wal-Mart, and not without a
fair amount of tugging.
One can even accept Freeman's claim to have identified and
rectified a flaw in other, alarmist studies of Wal-Mart's impact on
local economies: that while those studies focus on how the downward
pressure on retail wages produced by Wal-Mart's arrival leads to job
losses, they don't explore the converse whether the increased
purchasing power of shoppers at Wal-Mart and its price-cutting
rivals might pump enough money into a local economy to stimulate
employment. Freeman argues that over time, the extra cash in
Wal-Mart shoppers' pockets will mean a net gain in Southern
California of tens of thousands of jobs. And if someone wants to
challenge his math, at least he lays out his calculations in his
report's 40 pages.
For all that, when it comes to gauging Wal-Mart's influence on
local communities, much of that influence either can't be measured
by standard economics or hasn't yet generated enough data to allow
economists to work their mathematical magic.
It's hard to ignore the markers of this report's provenance as
the product of a commercial contract. Plenty of it reads as though
it was aimed for the ears of Freeman's exacting client. For example:
"Wal-Mart makes a point of always listening to its customers, and
focuses on the consumer's bottom line," Freeman writes at the close
of an admiring section on the corporation's devotion to frugality.
Well, maybe. But this sounds more like the language of PR flackery
than of objective economics.
Freeman says every word of the text is his own. He also says he
knew his conclusions would be controversial, especially in light of
the supermarket labor dispute, and strove to be objective: "I'm not
here to defend Wal-Mart or disguise the issues," he told me.
The LAEDC says Wal-Mart reviewed the report before it was issued
to the public. That's conventional practice with consulting clients,
the organization says, whether they're corporations like Wal-Mart or
agencies like the Metropolitan Transportation Authority. The idea is
to allow the client to ferret out factual inaccuracies rather than
cavil about wording. But it's also true that Wal-Mart had the
contractual right to veto the report's public release if it didn't
like its conclusions.
Since the company OKd its publication, no one should be surprised
that it lauded the LAEDC's conclusion that the arrival of Wal-Mart
Supercenters, which sell general merchandise along with groceries,
would be a net boon for the Southland. "This is a great day for
California consumers," said Wal-Mart spokeswoman Mona Williams, a
statement that fills me with the same gratitude I feel when my bank
tells me it's raising its fees in order to serve me better.
The fact is that while the LAEDC report may be fine as far as it
goes, it doesn't go far enough in analyzing the Wal-Mart effect on a
community. And by leaving out a few perceptible but unquantifiable
consequences of Wal-Mart policies, it makes the overall effect look
more favorable than it really is.
Consider an alleged Wal-Mart habit currently being scrutinized in
a federal courthouse in San Francisco: pervasive sex discrimination.
Lawyers for the plaintiffs in the case say that women in virtually
every job classification across the country are paid less than men
with the same responsibilities and seniority; women make up
two-thirds of the company's hourly workforce but one-third of its
management.
Calculating the economic impact of such a trend is difficult, if
not impossible, but the accusation hardly portrays Wal-Mart as a
force for social enlightenment. (The company has denied that it
discriminates, but also says it is trying to make its pay and
promotion system less subjective than before.)
On employment practices and benefits in general, the LAEDC report
takes Wal-Mart at its word. The company claims to provide such
perquisites as profit sharing and a 15% discount on company stock it
presents without comment, beyond saying "the value of these benefits
varies." Indeed, Wal-Mart's critics note that its famously lean
management structure means that as few as 10 workers in a store
employing 300 to 500 might be eligible for profit sharing, and its
low wages mean that few employees have the wherewithal to accumulate
a significant investment in its stock at any discount.
The company's claim to provide health benefits also deserves
greater scrutiny. Although the LAEDC report notes that Wal-Mart
provides employees with health insurance, it doesn't explore the
implications of how it does so. As this column has pointed out in
the past, not only do Wal-Mart workers pay a larger share of their
health insurance premiums than the average worker nationwide, but
the company also excludes coverage of many routine medical services,
such as contraceptives and child vaccinations.
Instead, Wal-Mart focuses on covering such "catastrophic" needs
as cancer treatment and organ transplants. This allows the company
to release gaudy numbers to make itself seem softhearted, such as by
noting that it pays for 60 transplants a year at more than $1
million each. But these are obviously rare events 60 transplant
patients would be the equivalent of just over one-hundredth of 1% of
Wal-Mart's 500,000 insured employees, for example.
What happens when the child of a Wal-Mart employee on an hourly
wage needs a shot for measles, chicken pox or the flu? The worker
faces the choice of shelling out, say, $75 to get the shot at a
private clinic (that's more than a day's pay for many of the
workers); or going to a public, tax-supported clinic, which means we
all pay; or trusting to luck that the child won't get sick, which
would force the employee to stay home for a couple of days, losing
more pay.
Wal-Mart freely, even boastfully, acknowledges that as many as
40% of its employees get their health coverage elsewhere, such as
from the employers of spouses or parents or from programs like
MediCal and Medicare. This is community-mindedness the Wal-Mart way:
Stick the other guy with the responsibility for your own workforce.
Wal-Mart ruthlessly prices its health coverage to discourage
employees from placing their own spouses and children on its plans,
but it's not above pushing its own workers on other companies. Then
it argues smugly that its competitors are only whining because they
don't know to cut costs as efficiently as it does.
This sheds a different light on the LAEDC report's contention
that other studies have overestimated the wage gap between Wal-Mart
grocery employees and unionized supermarket workers. The LAEDC
estimates that the overall average difference in Southern California
will amount to $2.50 to $3.50 an hour. But it doesn't calculate the
additional advantage the union members have had from their
comprehensive company-paid health insurance coverage or, for that
matter, from the company-financed pension benefits they have long
enjoyed.
Neither benefit is matched by Wal-Mart. Both, as it happens, are
mortally threatened today, because the supermarket chains engaged in
the labor dispute are determined to move their labor costs closer to
the Wal-Mart standard. The full import of this change, Freeman told
me, was "outside the scope" of his study, if only because healthcare
costs have become a national issue and it's impossible to tell what
company-paid health insurance plans will look like in five or 10
years. That's true enough, but it looks like a fair bet today that
healthcare will be taking a bigger chunk out of most workers'
paychecks tomorrow. Wal-Mart's influence on that trend can't be
discounted.
Perhaps, then, we should defer applauding the inevitable arrival
of Wal-Mart Supercenters in California. It may be, as the LAEDC
concluded, that we'll all benefit hugely from their relentless price
cutting. But we haven't even begun to learn how to measure the
supercenters' cost.
[back to top]
The Two Faces of Wal-Mart
By Amy Tsao - Business Week Online -
STREET WISE
[back to top]
January 29, 2004
Loved for its low prices, the retail behemoth could become the
object of scorn, thanks to a growing list labor-relations woes
Persuading Americans to use dollar coins has never been easy. So,
to get the Sacagawea dollar into circulation in 2000, the U.S. Mint
came up with an unconventional plan. It chose not just banks and
post offices to distribute the coins but also Wal-Mart (WMT ), where
the gold-tinted coin went into customers' change. That says a lot
about Wal-Mart's "credibility in our culture," says Barbara Bund, a
senior lecturer in customer relationships at the Massachusetts
Institute of Technology. The Mint chose the Bentonville (Ark.) chain
not only for its ubiquity as the world's largest retailer but also
for its status as a trusted, all-American company.
Wal-Mart's Sacagawea experiment was a mixed success: The coins
are circulating, but they haven't been a big hit with the public.
Surprisingly, perhaps even ominously, the retailer's performance
isn't living up to its image in another area: employee relations.
Most recently, on Jan. 18, The New York Times reported that
Wal-Mart has been locking in late-shift workers for security
reasons. That was preceded by news of an internal Wal-Mart audit
that showed, in a single week, more than 1,300 instances of minors
working at the chain's stores during school hours or later than
labor laws permit, plus more than 60,000 instances of workers not
taking scheduled breaks.
BACKLASH AHEAD? Those headlines followed last fall's federal
investigation into Wal-Mart's use of a cleaning contractor that
employed illegal immigrants. And all of that came on top of ongoing
suits alleging that, at some stores, Wal-Mart has practiced sex
discrimination and failed to pay required overtime (see BW, 10/6/03,
"Is Wal-Mart Too Powerful?").
So far, none of this has dissuaded shoppers from taking advantage
of Wal-Mart's famously low prices, nor have the controversies caused
even a blip in the $247 billion company's earnings, which analysts
expect to come in at close to $9 billion, or $2.03 a share, when
2003 results are reported on Feb. 19. That would be up 12% on a year
earlier. That's good enough for Wall Street, where investors'
priorities pretty much start and stop with the bottom line, and
sympathy for $7-an-hour employees isn't normally a pressing concern.
The question is: Will that hold true indefinitely? The answer,
according to labor-relations' experts, is that Wal-Mart's ability to
escape controversy and a possible consumer backlash depends on the
balance it can strike between its two, distinctly different images:
The first is of the big and friendly retailer, ally of the
little-guy consumer. The other is of an unfeeling giant putting the
squeeze on its little-guy employees.
"There are ways in which Wal-Mart is a good member of the
community," says Tom Kochan, professor of management at MIT's Sloan
School, who notes that the outfit is a big employer of senior
citizens. And like everyone else, Kochan points to its
bargain-basement prices. Because of those, he adds, "we have major
blinders on when it comes to the broader issues."
HIDDEN COSTS. Sneaker maker Nike (NKE ) is a testament to how
quickly public sentiment can change. Criticism of Nike for making
its shoes in overseas sweatshops took years to develop much
momentum. But when such complaints gained traction in the late
1990s, the public reaction hurt profits. Nike, Kochan says, has
since set up a corporate responsibility department, adopted
labor-practice guidelines, and spent substantial sums on repairing
its image. Its business has bounced back. "The market signals got
people's attention at Nike," Kochan says. "Until Wal-Mart feels that
same market pressure, I don't think it will make changes."
Still, Wal-Mart could be vulnerable. Workers claiming
mistreatment live and work in the U.S. -- many are even citizens --
not in out-of-sight, out-of-mind countries like Indonesia and
Mexico, where Nike was accused of using sweat-shop labor. And while
Wal-Mart employees may not look downtrodden to the casual shopper, a
situation in which consumers, some of them well-heeled, can put a
face to a widely publicized complaint carries some added risk for
the company.
Sooner or later, argues Adrienne Eaton, professor of labor
studies at Rutgers University in New Brunswick, N.J., it may occur
to shoppers that "there is a cost for those low prices." Because a
cashier's job that pays $7 or $8 an hour won't support a family, or
even half of one, retail workers often decline to buy health
insurance, even when it's offered, says Eaton.
WEED AND REFORM? She's about to begin a study on the impact of
Wal-Mart and other "big box" stores on communities in New Jersey.
One of her goals will be to put a figure on uninsured retail
workers' health-care costs that are passed along to taxpayers. In
theory, consumers who don't shop at Wal-Mart might object if it
turns out that they're indirectly picking up the retailing giant's
overhead. Wal-Mart officials didn't return calls seeking comment for
this article.
Another effect of the recent news, equally hard to quantify,
could be the impact on Wal-Mart's marketing budget. According to the
retailer's most recent annual report, it spent $676 million in the
fiscal year ending in January, 2003, on ads to draw shoppers and
burnish its image. At the very least, MIT's Bund says, a drumbeat of
unfavorable news might force Wal-Mart to increase those outlays in
an attempt to head off potential damage.
Wal-Mart's other strategy might simply be to weed out managers
found to have acted improperly and, when necessary, introduce
reforms. The drawback, of course, is that the cost of such measures
could alarm Wall Street, which usually doesn't award points for
being nice to employees. If the cost of such changes amounted to a
measly $1 a hour for each of Wal-Mart's 1.2 million employees, the
bill would total $2.1 billion a year. That could reduce Wal-Mart's
profits by about 25% -- or force it to raise prices and lessen its
advantage in the marketplace.
DENTED ARMOR. Wal-Mart is a master at quashing union organizing
drives, so history suggests its vulnerability on that front is
limited. But as it expands into less rural, more affluent areas, the
retailer could find itself facing more demanding employees -- not to
mention consumers who are less willing to tolerate what they see as
deviations from fair labor practices. In such markets, both shoppers
and employees are more likely to turn elsewhere, says MIT's Bund,
who suspects that shoppers can find other retailers who will "do
better for them." Consumers, speculates Bund, might choose to accept
"slightly less aggressive pricing for more palatable policies."
To outward appearances, not much of that has happened yet. But
it's significant, says Kate Bronfenbrenner, director of labor
education research at Cornell University, that a significant number
of Wal-Mart workers have come forward to complain about an employer
whose size and reach are so intimidating. And even though unions may
not pierce Wal-Mart's armor, they might, over time, put a dent in
it. Ira Kalish, global director at Deloitte Research, the
market-research division of consulting firm Deloitte & Touche, notes
the impact the United Auto Workers achieved when it lambasted
carmakers for unsavory labor practices. Even though the auto union
didn't strike, Kalish says those campaigns "did affect consumers'
willingness to buy from those companies."
Bronfenbrenner notes that a college-student group, United
Students Against Sweatshops, helped bring Nike to heel. "If the
right people pull together," she predicts, "the public will turn
against Wal-Mart."
Of course, few companies on earth are smarter or more resilient
than Wal-Mart. And considering how powerful it is, talk alone isn't
likely to make much of an impression. Over the past century, leading
U.S. companies that became the center of controversy -- from the
monopoly Standard Oil to the union-busting J.P. Stevens --
eventually had to change. So when the largest U.S. employer comes
under fire for the way it treats employees, the smart thing to do is
likely to become self-evident.
[back to top]
UNION TAKES ON QUEBEC WAL-MART; MORE THAN HALF
THE STAFF HAVE
SIGNED UNION CARDS BUT THE COMPANY IS CONTESTING THE ATTEMPT.
London Free Press (Ontario, Canada)
[back to top]
January 28, 2004
A battle to unionize a Wal-Mart store in this Saguenay area
community is pitting union organizers against the world's largest
retailer, an adamant opponent of organized labour.
If the workers succeed, the Jonquiere outlet will become the
first unionized Wal-Mart store in North America.
But the union is watching the situation in the Saguenay with keen
interest, because it is seeking union certification for three
Wal-Mart stores in London
and is in regular contact with workers in at least a dozen others
across the country, said Michael Forman, national communications
director of the United Food and Commercial Workers Union.
The Jonquiere outlet employs about 200, more than half of whom
signed union cards, said Marie-Josee Lemieux, president of Local 506
of the United Food and Commercial Workers Union.
"It was a long, slow process of talking to the people and
supporting them," Lemieux said.
"It was the people at Wal-Mart who did the work."
The union applied to Quebec's Labour Relations Committee in late
December for certification of the Jonquiere local.
In an e-mail, a Wal-Mart spokesperson said the company is
contesting the demand for accreditation.
"It is Wal-Mart's view that the unit proposed by the union is not
appropriate," Kevin Groh wrote. He was not available to comment
further.
Hearings will be held next month to determine how many jobs will
become unionized positions and which will be excluded.
The battle is being closely watched by union organizers and
retailers.
Wal-Mart, with more than 4,300 stores around the world and annual
global revenues exceeding $244.5 billion US, has become the world's
dominant retailer by slashing prices.
Part of those savings are realized through the lower wages and
benefits it extends to its 1.3 million workers.
Money is at issue in Jonquiere, where Lemieux said wages range
between $7.60 and $8.60 an hour, compared with between $9 and $17 in
unionized grocery chains.
But money isn't the only issue, she added.
Workers are also looking for "normal things," such as dental and
medical benefits, the right to consecutive days off over a two-week
period and protection from arbitrary firings, she said.
The union, which represents more than 250,000 grocery workers
across Canada, is concerned that the so-called "Wal-Mart effect" is
putting downward pressure on wages and benefits in other unionized
chains.
[back to top]
Wal-Mart Battles Unions With Spying and Training, Workers Say
Published in Bloomberg Markets
magazine
[back to top]
January 28, 2004
As a supervisor of the cashiers in Wal-Mart store number 589 in
Hillview, Kentucky, Brent Rummage, 27, was required to report to his
manager any mention of labor unions. He did so until his mother, who
worked in the women's clothing department, ventured that unions weren't as bad as
Wal-Mart said. ``I wasn't going to report my mother,'' he says.
Rummage, a former youth minister in the Church of God of
Prophecy, had worked hard to keep unions out of Wal-Mart Stores
Inc., the world's largest company with $244.5 billion in sales.
He barged in when workers talked among themselves -- a sign of
union activity, according to his bosses. He'd learned the tactic via
training in a mall conference room across the Ohio River in
Clarksville, Indiana. After the session, ``I thought, `What are
these guys going to do, rob us?''' Rummage says.
Far worse, from Wal-Mart's perspective: The United Food and
Commercial Workers union is trying to organize the U.S. and Canadian
stores of Wal-Mart, which has 1.5 million nonunion workers
worldwide, so the workers can bargain in groups for higher wages and
benefits. Success by the UFCW would upend Wal-Mart's business
strategy, which is to cut costs so it can cut prices.
The clash with the union comes as Wal-Mart pushes for a more
substantial presence in the grocery business, which employs more
than half of the union's 1.4 million members.
Wal-Mart is muscling into food with supercenters:
170,000-square-foot megastores that sell everything from leaf
blowers to lettuce by putting a supermarket and a regular Wal-Mart
discount store under the same roof. Wal-Mart built the first one in
1988 and had 1,430 in the U.S. as of Dec. 31.
Supercenters a Must
H. Lee Scott, the third chief executive
officer in Wal-Mart's 42-year history and a 25-year company veteran,
must build more supercenters for Wal-Mart to keep boosting profits.
Emme Kozloff, an analyst at Sanford C. Bernstein & Co., says
about half of Wal-Mart's profit growth in the next four years will
result from supercenters.
Wal-Mart's stock performance suggests some investors are
skeptical about whether a company whose sales are almost equal to
the gross domestic product of Switzerland can sell enough groceries
to keep growing at almost 16 percent a year.
``The question is, Where do they go next?'' says Tim Ghriskey,
president of Ghriskey Capital Partners LLC, who doesn't own Wal-Mart
stock because, he says, the path to growth isn't clear.
Wal-Mart shares rose 5 percent in 2003, one-fifth of the 26
percent gain for the Standard & Poor's 500 Index. During the past 20
years, Wal-Mart shares have risen almost 43-fold compared with
six-fold for the S&P 500.
Big in Dog Food
Wal-Mart, the biggest seller of everything from
dog food to jewelry, has increased sales each year since selling
shares to the public in 1970, helping push other discount retailers
-- such as Ames Department Stores Inc., Bradlees Inc. and Caldor
Corp. into bankruptcy.
Wal-Mart draws 138 million customers a week with ``always low
prices,'' the slogan displayed outside its stores. Prilosec OTC
antacid costs $21.69 at the Bruno's supermarket in Alabaster,
Alabama. It sells for $17.86 at the Wal-Mart 2 miles away. At 6 p.m.
on Dec. 11, Bruno's parking lot was almost empty. Wal-Mart's larger
one was two-thirds full.
The differences come from Wal-Mart's fanaticism about costs. It
charges employees 35 cents for coffee at the remodeled warehouse in
Bentonville, Arkansas, that serves as corporate headquarters. Next
year, it plans to require big suppliers to tag products with radio-emitting chips that will automate inventory
counting.
$6,000 per Employee Wal-Mart spokeswoman Mona Williams says
paying union wages would mean the end of Wal-Mart as customers know
it. In the fiscal year ended Jan. 31, 2003, the company made less
than $6,000 in profit per employee, an amount that would vanish if
salaries rose, she says.
``Being the low-cost leader is the core of our business model,''
Williams says. ``Changing that model would make our business less
successful, our jobs less secure.''
Scott and other Wal-Mart executives declined to be interviewed
for this story.
Keeping the UFCW out is crucial as Wal-Mart moves more deeply
into the grocery business, in which profit margins are slim. Kroger
Co., the largest U.S. supermarket chain, made $4,160 per employee in
the year ended on Feb. 1, 2003. Kroger's after- tax profit margins averaged 1.6 percent during the past five
years compared with 3.2 percent for Wal-Mart, Bloomberg data show.
Grocery Push
Albertson's Inc., Safeway Inc. and Kroger all are
unionized, and their growth is slower than Wal-Mart's. Sales at
Safeway rose an average of 7.8 percent annually during the five
years through 2002, for example, compared with 15.7 percent for
Wal-Mart.
As a result, Wal-Mart already sells more groceries by dollar
value than any of them.
The Wal-Mart-union battle heated up in 1999, when the UFCW
started a 12-person team for recruiting Wal-Mart workers to unionize
their stores. Six members are Wal-Mart veterans.
Rummage is one of the team's success stories. After a promotion
to the accounting office in a new supercenter in Fern Creek,
Kentucky, he got into Wal-Mart's management training program this
past April. The move put him on track to run his own supercenter one day, a job that can pay more than $200,000 a
year.
Jolly Mon's Rummage says much of his training dealt with keeping
the union from organizing associates, as employees are called. Over
lunch in the back room of Jolly Mon's, a local Jamaican restaurant,
a store manager told trainees how to spot ``salts'' -- union
organizers on the payroll who organize from inside. One clue:
They're always dissatisfied.
``They said our jobs would be on the line if we let the union
in,'' Rummage says.
After his training, Rummage was picked to manage all clothing at
store number 1246 in Louisville, Kentucky. When he arrived at 8 a.m.
on Aug. 4, the manager told him he would instead be supervising the
cash registers and the Radio Grill, Wal-Mart's in-house diner. Then the manager made him stay until
11:30 p.m. arranging merchandise.
Rummage held meetings in the training room with associates from
the clothing department, expecting to end up there, as planned. That
infuriated his manager, Rummage says.
Their rapport soured, and Rummage agreed with the manager's
recommendation to leave the store. He learned there were no
assistant manager jobs at area stores, so he returned to accounting
at his old one, where he still works.
Irked by his treatment, he called the UFCW. He and a
representative had lunch in a town 40 miles away to avoid detection.
Now, he's trying to organize workers.
No Wins Yet
The union is getting recruits. It has yet to unionize
a store. To do that in the U.S., it must get 30 percent of workers
in a store to sign authorizations. Then the National Labor Relations
Board, a federal agency, holds an election. If most vote in favor,
the union wins the right to negotiate a contract, which workers must
approve.
The only Wal-Mart employees who have ever agreed to unionize were
10 butchers at a store in Jacksonville, Texas. They voted 7 to 3 in
favor on Feb. 14, 2000. Two weeks later, Wal-Mart switched to prepackaged meat and sent the butchers to other
departments, says Maurice Miller, 49, a leader of the union drive.
Only one remains at the store, Miller says.
``It's going to take years to produce results,'' says Al Zack,
second in command of the UFCW's Wal-Mart team.
Keeping union organizers like Rummage at bay may get harder for
Wal-Mart as it erects supercenters in labor strongholds in Illinois,
Michigan, New York, Ohio and Wisconsin, says Burt Flickinger, a
retail consultant in New York.
Union Sympathizers
The union has more allies these days too:
communities opposed to the increase in traffic that comes with a big
store, environmentalists fretting about rainwater runoff from vast
parking lots, manufacturers who blame Wal-Mart for hastening the exodus of U.S. jobs to China. Of all of Wal-Mart's critics, the
UFCW is the most dangerous, Flickinger says.
``Only organized labor has the resources to keep Wal-Mart an
ongoing news story,'' he says.
Patricia Edwards, who helps manage $5.5 billion at Wentworth,
Hauser & Violich in Seattle, which holds Wal-Mart shares, says the
notoriety may hurt sales if the economy keeps improving and
concerned shoppers can afford to put their ideals ahead of low
prices.
``If you've got a little more discretionary income and you don't
like some of the things that are being printed about Wal-Mart, then
maybe you'll shop at Target,'' she says.
Holiday Sales Wal-Mart's December sales rose 4.3 percent from a
year earlier. The company had predicted a gain of 3 percent to 5
percent. December sales at Target Corp., the second-largest U.S.
discount retailer, rose 4.1 percent. Luxury retailers did best, with
sales at jeweler Tiffany & Co. climbing 16 percent.
The UFCW has had a hand in many of Wal-Mart's high-profile
fights. Union members handed out leaflets at 1,000 stores, telling
female employees about a class-action lawsuit alleging Wal-Mart
denied women promotions, paid them less than men and forced them to
visit strip clubs on business.
A U.S. District Court judge in San Francisco is deciding whether
1.6 million women who have worked at Wal-Mart since 1998 should be
represented in the case. If so, it would be one of the largest class
actions in U.S. history.
In May 2003, the UFCW bused workers to a Las Vegas rally led by
former Miss America Carolyn Sapp, who has made Wal-Mart's treatment
of women her cause celebre. In Oakland, California, UFCW members
lobbied officials before the city council banned supercenter-size
stores in October by a vote of 7 to 1.
Pressuring Investors
The union is putting pressure on Wal-Mart's
stock, too. Brian Holland, who helps manage $4 billion at Boyd Watterson Asset Management LLC in Cleveland, says he'd love to buy
Wal-Mart shares. He can't because, out of sympathy for the UFCW, the
unions for which he manages money won't let him.
``It's a well-managed company,'' Holland says. He declines to
name the unions.
In all, the UFCW spends about $3 million a year on its war
against Wal-Mart. Local chapters contribute beyond that. ``The UFCW
is the primary catalyst behind the complaints,'' Wal-Mart
spokeswoman Williams says. ``We didn't have these issues before we
got into the food business.''
Wal-Mart is so concerned about the union that it assigns a Union
Probability Index, or U.P.I., to each store based on an anonymous
survey of employees, says Stan Fortune, 47, a 17-year Wal-Mart
veteran who now works for the UFCW's Wal-Mart team.
Williams says U.P.I. actually stands for Unresolved People
Issues. If the U.P.I. gets high enough, Wal-Mart sends in a special
team to root out the union, Fortune says. He spent three months on a
similar assignment in Las Vegas in 1997, he says.
Teaching Labor Law
Williams says that Wal-Mart has an ``HR team''
of about 10 people that flies around the country. Its purpose is to
teach employees about labor law and how to abide by it, she says.
Jon Lehman, a former store manager who's with the union now, says
Wal-Mart has a 60-foot-by-60-foot room at its headquarters in which
two dozen people with headsets monitor calls and e-mails from stores
to see whether anyone is talking about union organizing.
Wal-Mart spokeswoman Sarah Clark says the company monitors calls
only in stores at risk for bomb threats. A recording tells callers
that conversations may be monitored, she says.
Without such a warning, Wal-Mart's practice would be illegal in
California, says Cliff Palefsky, a partner at McGuinn Hillsman &
Palefsky in San Francisco.
Customers, Not Critics
Wal-Mart is taking its pitch to customers.
In March, it began airing television ads that portrayed Wal-Mart as
a great place to work. In December, TV ads touted a new store in Los
Angeles, with locals talking about how Wal-Mart created jobs and
attracted other stores to a run-down area.
CEO Scott says he's worrying about his customers, not his foes.
``It's not our goal to make our detractors love us,'' he told
financial analysts who were meeting at the Embassy Suites hotel in
Bentonville on Sept. 30.
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