Wal-Mart vs. Class Actions

"Quezalcoatl Must be Furious"
Wal-Mart Invades Mexico

By JOHN ROSS

Institute for Local Self-Reliance

Institute for Local Self-Reliance

Institute for Local Self-Reliance

Bloomberg

Institute for Local Self-Reliance

The New York Times Company 

Institute for Local Self-Reliance

When Wal-Mart Stores holds its first-ever media conference in Arkansas next week, image consultants say the company needs to spell out how it is dealing with controversial issues that continue to dog it, from gender discrimination to wage-and-hour violations.

"They need to persuade people they are bigger than people's attitudes toward them," said Clarke Caywood, professor of public relations at Northwestern University.

Wal-Mart has a lot at stake. Its fast growth was fueled by the perception it had the cheapest prices. But now that formula is in trouble as critics charge that it takes advantage of employees and hampers competition.

It has had very public legal problems, paying a fine to settle federal charges that underage workers operated dangerous machinery, and agreeing to pay $11 million to settle charges that its cleaning contractors used illegal immigrants. And it faces opposition to some of its store openings. Such controversy comes as the discounter struggles with higher expenses and slower growth.

Throngs of customers keep shopping at its stores, but image experts say that could change.

"Any retailer has to be cautious about consumers' opinions of their business ethics and practices," said Howard Rubenstein of Rubenstein Associates, a public relations firm.

Image also matters for investors, who have seen Wal-Mart's stock go nowhere the last two years as shares of rival Target have steadily risen.

Wal-Mart officials declined to be specific about what they will say to the 50 journalists expected to be at the conference.

"This is clearly by Wal-Mart's own admission a damage control tour," said Christy Setzer, a spokeswoman at the AFL-CIO, whose United Food and Commercial Workers Union is trying to organize workers at some Wal-Mart stores.

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Consultants Wal-Mart Needs Soul-Searching

By ANNE D'INNOCENZIO        [back to top]
The Associated Press
Thursday, March 31, 2005; 4:52 PM

NEW YORK - When Wal-Mart Stores Inc. holds its first-ever media conference in Arkansas next week, image consultants say the company needs to spell out how it is dealing with controversial issues that continue to dog it, from gender discrimination to wage-and-hour violations.

"They need to persuade people they are bigger than people's attitudes toward them," said Clarke Caywood, professor of public relations at Northwestern University in Evanston, Ill.

What's important is for the world's largest retailer to provide specifics about how it will execute better business practices, Caywood and other image experts say.

Wal-Mart has a lot at stake. The company's fast growth was fueled by its perception that it had the cheapest prices around. But now that formula is in trouble as critics charge that the retailer takes advantage of its employees and hampers competition.

It has had very public legal problems, paying a fine to settle federal charges that underage workers operated dangerous machinery, and agreeing to pay $11 million to settle charges that its cleaning contractors used illegal immigrants. And it also faces very vocal opposition to some of its store openings. Such controversy comes as the discounter struggles with higher expenses and slower growth.

Despite Wal-Mart's negative image, throngs of customers keep shopping at its stores, but that could change, image experts said.

"Any retailer has to be cautious about consumers' opinions of their business ethics and practices," said Howard Rubenstein, president of Rubenstein Associates, a New York-based public relations firm.

Wal-Mart's image also matters for investors, who have seen Wal-Mart's stock go nowhere the last two years as shares of rival Target Corp. have steadily risen.

"They should reveal what went wrong ... and outline in layman's language so that the public would understand this is a true apology," Rubenstein said. If it doesn't, "their business may prosper, but when you run into this buzzsaw, you are courting trouble."

Wal-Mart's officials declined to be specific about what they will say to the approximate 50 journalists expected to gather at the conference.

The goal, according to Gus Whitcomb, a Wal-Mart spokesman, is to "try to help journalists understand our business, how we do business, and about us as people." He added that he sees this as more of "an educational opportunity," than a newsmaking event.

Still, while plenty of public relations experts applaud the rare two-day media event, there are also risks. Wal-Mart, faced with a dozens of lawsuits, has to be careful what it says and what it promises because it may not be able to deliver later.

"This is clearly by Wal-Mart's own admission a damage control tour," said Christy Setzer, a spokeswoman at the AFL-CIO, whose United Food and Commercial Workers Union is trying to organize workers at some Wal-Mart stores. "They are aware of a growing chorus of community leaders, environmentalists and religious leaders, who are saying that Wal-Mart's values are not our values. And they need to respond to this. It is telling that they would rather spend millions of dollars on PR efforts than to change their business practices."

Wal-Mart clearly has ramped up a public relations campaign. In January, the company bought full-page ads in more than 100 newspapers around the nation to spotlight its message that it provides opportunity for advancement and that its stores provide mainly full-time jobs that come with a broad benefits package. Over the past year, it has hired big name public relations companies, including Hill and Knowlton Inc., to bolster its public relations efforts.

Last June, at its annual shareholders' meeting, Wal-Mart announced it was changing its policies on pay, promotions and diversity.

But bad publicity appears to keep piling up. Just last week, the company announced that Thomas M. Coughlin, a high-profile Wal-Mart board member and former vice chairman resigned after an internal probe turned up evidence of financial improprieties of up to $500,000. Three Wal-Mart employees, including a company officer, also resigned.

© 2005 The Associated Press

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Wal-Mart's Culture Of Crime And Greed

Jonathan Tasini        [back to top]
March 30, 2005

Thomas Coughlin, the Wal-Mart vice chair who was recently dismissed for padding his expense account, is not just a public relations problem for the retail behemoth. He's a product of the Wal-Mart corporate culture. He's also not alone: Numerous other execs have been dismissed recently for various corporate crimes. Jonathan Tasini says that manipulation, greed and wrongdoing in the name of profit are as much a part of the Wal-Mart business model as are those low, low prices.

Jonathan Tasini is president of the Economic Future Group and writes his "Working In America" columns for TomPaine.com on an occasional basis. Tasini will be participating in an April 6 nationally broadcast debate on the question “What's Good for Wal-Mart is Good for America?” Details at http://www.economist.com/events/walmart/ .

The Beast of Bentonville (better known as Wal-Mart) is grappling with a spate of management dismissals and investigations over the past few months that appear rooted in internal petty thievery. But rather than a few bad apples being rooted out, it’s clear that crime, greed, wrongdoing, malfeasance and cronyism are deeply embedded in the Wal-Mart business model. Indeed, Wal-Mart could not survive without manipulating the system and breaking the law.

In case you didn’t catch it, Thomas Coughlin—a former vice chair of the company and at one time a potential future CEO candidate—was forced to resign from the board because of, as the British Financial Times reported on its front page, an “alleged unauthorized use of corporate-owned gift cards and personal reimbursements that appear to have been obtained from the company through the reporting of false information on third-party invoices and company expense reports. The amount in controversy is estimated to be in the range of $100,000 to $500,000.” Translation: the guy padded his expense accounts.

In the current investigation, three other employees, including a company officer, were also dismissed. And back in December, three other executives and four employees were fired for violating “unspecified” company rules. I would venture to guess that those rules had nothing to do, for example, with treating workers badly (that kind of conduct actually calls for a promotion at the Beast of Bentonville, or at least a one-time visit to the company’s executive washroom) but with other financial wrongdoing.

But why should this be surprising? The culture of Wal-Mart encourages and condones misbehavior among its leaders every day. Let me tick off just the highlights—or lowlights, as the case may be.

Less than two weeks ago, the Beast paid $11 million to settle charges that it used hundreds of illegal immigrants to clean its stores. In February, those nice family-values people from Bentonville agreed to pay a pathetic $135,000 and change to settle charges of child labor violations. Think about it: a corporate culture that tolerates endangering children. As an aside, when the child labor deal was announced, I wrote that the level of the fine was scandalous; the whole sweetheart deal is now under investigation by the Department of Labor’s inspector general.

Wal-Mart is facing the largest gender discrimination lawsuit in history—involving 1.5 million women. I hear the company is deeply engaged in talks to settle the case for obvious reasons: it’s guilty as hell. The depositions in the lawsuit, detailed in Liza Featherstone’s new book, Selling Women Short, make it crystal clear that the company, as a matter of policy, consistently broke the most basic laws of workplace equality.

Not enough? Workers have been illegally fired for trying to form a union, and Wal-Mart spends millions to thwart workers basic rights, giving its union-breaking staff priority on resources (like corporate jets) over even higher-placed managers. In 2000, meat cutters at a Wal-Mart in Texas voted for the union—and Wal-Mart promptly violated the law by shutting down the meat-cutting department in the store and, for good measure, closing every other meat-cutting department in 180 other stores, just to make sure they had stamped out any smell of unionism. Even the National Labor Relations Board—no friend of labor—saw through the company’s actions and charged the Beast with illegal behavior.

And, to top it off, the Beast’s business model could not operate without the connivance of the authoritarian regime in China. You probably never heard of a guy named Wang Jun, but he’s one of Wal-Mart’s main men in China. Aside from being involved in a company called Poly Technology, which is the weapons-trading arm of the People’s Liberation Army, Jun runs a Chinese state-sponsored investment company and ensures that Wal-Mart’s wishes are known and satisfied by those running the Communist Party. In China, Wal-Mart has a ready supply of underage children and under-waged adults to produce its products. The point here is that Wal-Mart is no free-market miracle: Its profits are a result of an artificial suppression of wages. Wal-Mart could not operate in a truly free market—if such a thing even existed. Instead, Wal-Mart is in cahoots with the Chinese government, raking in profits by condoning the violation of basic international labor standards.

Greed is a theme with the Wal-Mart family. The family, worth a combined $95 billion, has given a stingy one percent of its wealth to charity. By comparison, Business Week, writing about Bill and Melinda Gates in a November cover story on the country’s philanthropists, observed that the Gates made “history this year by giving their estimated $3 billion Microsoft Corp dividend to their foundation. It’s one of the largest donations in history by a living donor. To put it into perspective, that one gift is three times bigger than the amount that America’s richest family, the descendants of Wal-Mart Stores Inc founder Sam Walton, has given during their entire lifetimes .” [Emphasis added]

The company’s reaction to this record of law-breaking has been predictable: It’s just a public relations problem—the standard response at a company that has built its image on myths. CEO Lee Scott, backed by millions of dollars of advertising on television and in print publications like The New York Review of Books , recently embarked on a public relations tour. Speaking in Los Angeles, he told business leaders, “We’ve got nothing to apologize for.”

When you see all the law-breaking, malfeasance and greed around you, and your corporate leader thumps his chest in pride, a natural human reaction might be, “Where’s my taste here? If my company routinely violates the law or runs right up to the edge of the law at every opportunity to squeeze out more profits, what’s a few hundred thousand dollars in inflated expenses, morally speaking?”

Coughlin and the other management schlubs who have been shown the door are not anomalies. They are a reflection of a culture stretching back to Sam Walton himself—a man who was a classic bully, willing to trample on the little guy and make a profit off of the poverty of millions of people. That’s the Wal-Mart way.

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Wal-Mart hit by 21 House Democrats over ABC TV news sponsorship

By DEVLIN BARRETT              [back to top]
Associated Press Writer
March 29, 2005, 7:12 PM EST

WASHINGTON -- An ABC morning news segment called "Only in America" should be sponsored by anyone but Wal-Mart, according to 21 Democrats in Congress who complained Tuesday about the company's relationship with it.

Rep. Anthony Weiner, D-N.Y., said Wal-Mart Stores Inc.'s sponsorship of the news feature segment on "Good Morning America" is an effort to make a false impression on viewers that it supports American workers and products.

"To try to allow Wal-Mart to continue to wrap itself in the American flag when it has been a company that has been hostile to so many American values is troubling," said Weiner, who is running for mayor of New York City this year. "More and more Americans are asking about the price that we have to pay when Wal-Mart comes into a community, treats workers poorly, violates immigration laws and squashes small businesses."

In their letter, lawmakers from 10 states urged ABC News to cancel immediately Wal-Mart's sponsorship of the "Only in America" series, which profiles Americans.

"This segment _ a segment meant to highlight hardworking and strong-willed Americans _ is wrong and misleading to the viewer," the lawmakers wrote.

ABC vice president Jeffrey Schneider said the network had no plans to cancel Wal-Mart's sponsorship, adding the company allowed "absolutely no overlap" between the advertising on ABC News and its editorial content.

"What's kind of ironic about this particular campaign against ABC News is that ABC News has done some of the most aggressive reporting about Wal-Mart," Schneider said.

Wal-Mart spokesman Dan Fogleman defended the sponsorship as an appropriate advertising choice for the Bentonville, Ark., company, which spent roughly $137.5 billion last year with U.S.-based suppliers and whose customers included an estimated 90 percent of the American population.

"It's frustrating that these individuals did not contact us to seek out the facts about our company," he said.

Wal-Mart, the world's largest company, has been a big target for a host of accusations about how it treats its workers.

The company recently paid a fine to settle federal allegations that underage workers operated dangerous machinery and agreed to pay $11 million to settle federal allegations that its cleaning contractors used illegal immigrants.

It is appealing a judge's decision to certify class status for up to 1.6 million women who claim they were victims of gender-based discrimination at the company.

The lawmakers who signed the letter are Weiner, Carolyn McCarthy, Brian Higgins and Maurice Hinchey, of New York; Sherrod Brown, Tim Ryan, Dennis Kucinich and Ted Strickland, of Ohio; Tom Lantos, George Miller, Linda Sanchez and Barbara Lee, of California; Bill Pascrell and Frank Pallone, of New Jersey; Lane Evans and Janice Schakowsky, of Illinois; Michael Capuano, of Massachusetts; Julia Carson, of Indiana; Raul Grijalva, of Arizona; Peter DeFazio, of Oregon; and Neil Abercrombie, of Hawaii.

Copyright 2005 Newsday Inc.

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Wal-Mart pitches green design for Vancouver

CTV.ca News Staff       [back to top]

The retail discount chain Wal-Mart, already a Goliath across North America, is fighting for a piece of turf in one of Canada's largest cities.

Vancouver City Hall first said that Wal-Mart was not environmentally friendly enough for the city, and sent the world's largest retailer back to the drawing board.

Wal-Mart already has stores in nearby North Vancouver, Burnaby, Surrey, Langley, and Abbotsford.

In order to satisfy city hall, Wal-Mart hired architect Peter Busby to come up with a new plan.

Busby's architecture firm is a leader on the world stage in sustainable development. His office is located in Vancouver's Yaletown district, and according to their website, his goal is "to inspire others to produce buildings which are not only beautiful but contribute to the health of our environment."

After spending two years on his design, Busby says, "there's nothing like this in North America." His "green" design will allow the Wal-Mart store to use one-third of the energy it takes to run a regular store. Windmills generate power and underground wells will heat and cool the building. Skylights will replace lamps in the store.

"There will be no lights on during the daytime all year. That saves a lot of energy." Despite the design changes, city councillor Anne Roberts still doesn't want a Wal-Mart in Vancouver. "A Wal-Mart flies smack in the face of what we've been trying to do."

Wal-Mart has applied to build on a vacant lot on Marine Drive, in the southeast part of Vancouver. This area has been approved for "big box" store development.

CTV's Todd Battis says that the city is worried about the 6,000 cars expected to drive to and from the store each day. Exhaust from the traffic would create a pollution problem, and would also add to traffic congestion inside Vancouver.

Roberts says: "This city wants to be a city of neighborhoods; to get away from the car."

Canadian Tire has also proposed to build on an adjacent lot next to where Wal-Mart is planning to build. However, Canadian Tire hasn't received the same level of opposition Wal-Mart has from the City of Vancouver.

Wal-Mart is one of the largest employers in the world, with more than one million employees. But it's faced some labour issues in recent times. In Quebec, Wal-Mart is shutting down the first store to unionize in North America this May.

Busby remains optimistic that his environmentally friendly design will not only save Wal-Mart money but could influence future Wal-Mart outlets for the better.

"They're a very thrifty company. If this proves to be cheaper to run, who knows, maybe they'll change their approach to lots of different stores."

Wal-Mart will find out this May if their environmental changes are enough for the Vancouver City Council. But Vancouver won't be the only major city to keep Wal-Mart out; New York City doesn't have a Wal-Mart either.

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Director's Ouster A Blow to Wal-Mart Legal Woes Already Weigh on Retailer

By Michael Barbaro                      [back to top]
Washington Post Staff Writer
Tuesday, March 29, 2005; Page E04

The ouster of a Wal-Mart board member after the alleged misuse of company funds will hurt the chain's image at a time when it is already smarting from several high-profile legal disputes and is trying to rebut its fiercest critics, according to an analyst who tracks the retailer.

The chain's chief executive, H. Lee Scott Jr., "has his hands full with issues that percolated under his tenure," said Bernard Sosnick, a retail analyst at Oppenheimer & Co. "It might take a while for Wal-Mart to burnish its somewhat tarnished" reputation.

Wal-Mart this month agreed to pay $11 million to settle federal allegations that illegal immigrants were used to clean its stores. And it still faces a class-action lawsuit, filed on behalf of 1.6 million current and former female employees, claiming gender discrimination.

Scott is expected to address the conduct of the former board member, Thomas M. Coughlin, today in a telecast that will be broadcast to Wal-Mart's 1.2 million U.S. employees. In that appearance, Scott "will encourage associates to always have the courage to come forward if they suspect wrongdoing," said company spokeswoman Mona Williams.

Coughlin, who was the No. 2 executive at the company until last December, was asked to step down from the board after a disagreement over the results of internal investigation into alleged financial improprieties that totaled $100,000 to $500,000, the company said Friday.

A six-week investigation prompted the company to fire three employees, including a company officer, Wal-Mart said. The probe focused on the alleged unauthorized use of corporate gift cards and suspect expense reports.

The company declined to offer more details and has turned the case over to the U.S. attorney for the Western District of Arkansas.

The significance of Coughlin's ouster stems from his commanding position within the company. As vice chairman of Wal-Mart Stores Inc., he was responsible for Wal-Mart, Sam's Club and Walmart.com. He was "presumably a guardian" of Wal-Mart founder Sam Walton's legacy, Sosnick wrote in a research note. "Any involvement in improprieties would indicate the ethos of the founder is waning."

Coughlin did not return a phone message yesterday.

Coughlin, who came to Wal-Mart in 1978 as a vice president of security, rose quickly through the company's ranks and, two decades later, was considered a strong candidate to succeed David Glass as chief executive -- a job that instead went to Scott in 1998.

Robert Slater, author of "The Wal-Mart Decade," said Coughlin had a reputation "for being blunt and tough-minded."

"Almost all of Sam Walton's successors exuded a calmness, almost a gentleness; Tom Coughlin was different," Slater wrote. "He was big and brash and looked like an aging NFL football tackle."

When he learned of a manager who failed to spend enough time on the sales floor, Coughlin simply locked him out of his office, according to Slater.

Coughlin was popular among employees. Julie Pierce, a former Wal-Mart store manager, said Coughlin personally responded to her e-mails after she was fired from a store in Louisiana -- and helped her win back the job.

"The man was there for us," Pierce said.

Jon Lehman, another former Wal-Mart manager, said he was "shocked" to learn Coughlin was under investigation. "He was this larger-than-life figure" within the company, Lehman said, "who just seemed beyond reproach."

In an e-mail to employees over the weekend, Scott said he anticipated "strong reaction to this news and that is understandable."

Williams said that Wal-Mart initiated the investigation on its own and that the incident "underscores the strength of the Wal-Mart culture and the fact that our standards of integrity apply to everyone with no exception."

Jeff Stinson, an analyst at FTN Midwest Securities Corp., agreed. Wal-Mart "is bigger than one person," he said. "The Coughlin situation shows how seriously the company takes its ethics."

© 2005 The Washington Post Company

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Wal-Mart marches closer to Columbus' center Convenience stores up next?

Kathy Showalter                  [back to top]
Business First
March 25, 2005 print edition

Wal-Mart Stores Inc. has forged its Central Ohio retail network by putting up discount stores and Sam's Club warehouses in the suburbs that encircle Columbus.

Now it's ready to move in on the city's urban core.

Executives from the Bentonville, Ark.-based retailer met with area lawmakers in mid-March to talk about the company's development plans. And though they didn't reveal a timetable for building inner-city stores and its Neighborhood Market convenience stores, the executives did plant some seeds.

"They indicated they may come to us with some possible development (projects) closer to the central city," said Columbus Councilwoman Mary Ellen O'Shaughnessy, "but they were no more specific than that."

But that's exactly what Wal-Mart plans to do. Keith Morris, manager of community affairs for the world's largest retailer, pointed to other communities - including Baltimore, Philadelphia and Chicago - as examples of what's in store for Columbus.

"We started in Cincinnati on the outskirts," Morris said. "Now we have stores that are up and running inside the (Interstate 275) loop, and more under construction."

Columbus picture And it's just starting in Columbus:

Wal-Mart will build a 180,000-square-foot Supercenter at the Carriage Place Shopping Center on Bethel and Sawmill roads in the city. It will tear down the plaza's anchor spaces, once filled by a Big Bear supermarket and Drug Emporium, and replace them with a single Wal-Mart store. Wal-Mart plans to build a Supercenter store on East Main Street in Whitehall. The company also is negotiating for property on East Broad Street at Rose Hill Drive, east of a Lucent Technologies Inc. research building. There it would build a Supercenter a short walk from two retail plazas. Morris, who estimated that all three new stores could be open in the next 18 months, attributed the expansion to Wal-Mart's success in Central Ohio.

"We open one store (and see) where the customers are coming from," he said. "How successful that store is determines where or when we'll open our next (Supercenter). Each time a store does well and it draws customers from a broader radius than it was originally intended, it opens the door for more stores."

Wal-Mart operates 14 stores in Franklin and surrounding counties, plus four Sam's Club stores. It has none of the 40,000-square-foot Neighborhood Market stores in the area.

Retail analyst Burt Flickinger, managing director of New York-based Strategic Resource Group, a consulting firm, said there is a pattern to the giant retailer's expansion.

"Neighborhood Markets come right after Wal-Mart rings the outer-urban and inner-urban areas," Flickinger said.

The nearest Neighborhood Market stores are in northern Kentucky, outside of Cincinnati, and in Indianapolis.

Flickinger likened Wal-Mart's strategy to one used to win wars. Wal-Mart, he said, conquers the countryside first, the outer suburban areas next and then moves in on near-inner-city neighborhoods.

"That's a long-accepted military strategy that's been successful by all the countries that have won wars over the last 50 years," Flickinger said. "It's been a successful strategy for Wal-Mart."

But Wal-Mart's needs are changing in the process. For its 200,000-square-foot Supercenter stores, the company typically seeks at least 14 acres. But finding large parcels is difficult in dense urban neighborhoods, so Wal-Mart is experimenting with store sizes. Sometimes the urban stores are divided, with its lawn-and-garden operations across the street, or the stores are two-story designs.

A 99,000-square-foot Supercenter, which Wal-Mart is testing in Florida and Texas, can get by on a 5-acre site, Flickinger said.

Regardless, the effect on inner-city retail is much the same as it is in the suburbs.

"Unionized stores end up closing," Flickinger said. "Union members lose their jobs. Some of the high-paying jobs are gone. Wal-Mart Supercenter saturation often catalyzes bankruptcies and liquidations of the regionals."

Why Ohio? Flickinger said Ohio is particularly important for Wal-Mart's growth, because of the strength of two rivals - Kroger Co. of Cincinnati and Grand Rapids-based Meijer Inc.

"They want to put more profit pressure on their two most successful competitors," Flickinger said. "Unlike many of its competitors, Kroger has been successful winning wars against Wal-Mart with all the various (Kroger) formats."

Wal-Mart executives have long considered Meijer a strong competitor, Flickinger said.

"Wal-Mart's internal strategy is to knock out its best competitors on one side and the weakest competitors on the other," he said.

Among the weak competitors is Kmart, Flickinger said.

"There's an internal mantra at that company: Wal-Mart does not win until its competitors fail," he said.

© 2005 American City Business Journals Inc.

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Union asks Quebec labour relations board to halt Wal-Mart store closure

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MONTREAL (CP) - The United Food and Commercial Workers Union filed an application Thursday asking the Quebec Labour Relations Commission to delay the closing of the Wal-Mart store in Jonquiere.

Workers at the store had been trying to negotiate their first contract. The U.S. retail giant, citing financial trouble, announced in February it would close the store in May.

However, Yvon Bellemare, president of the UFCW's local 501, said the union believes the closure was to stop employees from unionizing.

"In our view, the real reason for closing the Jonquiere store is that the employees stood their ground by unionizing, and not because of any alleged financial difficulties," Bellemare said in a release.

"We feel that this closing really amounts to dismissing people for engaging in union activity."

The union is asking the board to delay the closure pending rulings on employee dismissals and the content of a collective agreement.

UFCW represents more than 45,000 members in Quebec.

It is affiliated with the FTQ, Quebec's largest union confederation with 500,000 members.

© The Canadian Press, 2005

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Internal scrutiny led to Wal-Mart ouster

Posted 3/25/2005 7:11 PM      [back to top]  

LITTLE ROCK (AP) — A high-profile Wal-Mart (WMT) board member resigned Friday after an internal investigation turned up evidence of financial improprieties of up to half-a-million dollars. Three Wal-Mart employees, including a company officer, also lost their jobs. The world's largest retailer said it asked Thomas Coughlin, also a former president and CEO of the company's stores division, to step down because of "a disagreement" over the results of the probe, which involves $100,000 to $500,000, and his "response to questions concerning his knowledge of certain transactions," according to a regulatory filing.

The Securities and Exchange Commission document does not directly state what role, if any, Coughlin had in "the alleged unauthorized use of corporate-owned gift cards and personal reimbursements that appear to have been obtained ... through the reporting of false information on third-party invoices and company expense reports."

In a separate statement, Bentonville, Ark.-based Wal-Mart said that it did not expect any adverse financial impact from the investigation. The company did not name or otherwise identify the three fired employees and declined further comment Friday.

Wal-Mart also said it initiated the investigation on its own and has referred its findings to the U.S. Attorney for the Western District of Arkansas. The U.S. Attorney's office had no comment.

Coughlin, a 28-year company veteran, was most recently the board's vice chairman. Previously, he had served as executive vice president, president and chief executive of the Wal-Mart Stores division and Sam's Club USA. He also serves on the board of directors of ChoicePoint.

In his resignation letter to Wal-Mart that accompanied the SEC filing, Coughlin wrote, "I leave with warm feelings for the company and all the people who have made it great. I have appreciated the opportunity to serve." He could not be reached for comment Friday.

Coughlin was often referred to as Wal-Mart's No. 2 executive. The company announced in December that he would retire in January to spend time with his family and pursue other business interests. His term on the Wal-Mart board runs through June 2005. He has been vice chairman and a board member since April 2003.

In February, Bentonville announced it would name its new public library after Coughlin; the Walton Family Foundation and Wal-Mart Sam's Club Foundation donated $4 million to the project.

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Bill Allots $37M for Wal-Mart HQ Street

03.25.2005, 10:08 AM        [back to top]
Associated Press

The U.S. House has approved a federal highway bill that includes $37 million for widening and extending the Bentonville street that provides the main access to the headquarters of Wal-Mart Stores Inc.

The company says it asked U.S. Rep. John Boozman, R-Ark., to help get federal money for the proposed project. U.S. Rep. Don Young, R-Alaska, added an amendment that put the work into the $284 billion bill, which is now before the Senate.

Wal-Mart spokesman Jay Allen said the company wants Eighth Street improved so workers will have an easier time getting to their jobs. In the time Wal-Mart's headquarters has been at the site, the company has grown at a much greater rate than the street has been improved. Wal-Mart, as measured by sales, is the world's largest company.

"We have people living all over the area," Allen said. "Infrastructure in northwest Arkansas is a big issue for us. This would represent another east-west corridor connected to the interstate, which would benefit everybody."

The money in the transportation bill would widen the street and pay for connecting it to Interstate 540. Linking the road to the interstate could be tricky because exits have to be at least a mile apart. A connector road could be built tying Eighth Street to a nearby exit or the road could be extended to intersect with the interstate at another spot.

Boozman spokesman Patrick Creamer said the congressman's request for the funding was penciled in for $3 million when the bill was in committee.

"It was very unexpected on our end," Creamer said. "It's rare that you get full funding."

Young, chairman of the committee, inserted new allocations for hundreds of projects around the nation the day before the House passed the $284 billion bill March 10. The Bentonville project was among the late additions.

Bentonville officials have said $37 million would cover widening the street from two to five lanes and connecting it to I-540.

The Senate is expected to vote on its version of the bill in April.

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“ALL WE WANT TO DO IS GROW”: WAL-MART LOOKS FOR NEW WORLDS TO CONQUER

By Philip Mattera                     [back to top]
Updated March 24, 2005
Corporate Research E-Letter No. 52, March-April 2005

“All we want to do is grow.” This is the way Wal-Mart chief executive H. Lee Scott, Jr. has summed up his company’s mission. And grow it has, becoming the world’s largest corporation in terms of revenue. Of its $285 billion in sales last year, some $10 billion reached the bottom line—a level of profit attained by only a handful of business giants.

Yet all is not well at the Arkansas-based firm. There are signs that the company’s 3,500 domestic outlets are beginning to saturate the U.S. retail landscape. Same-store sales have been increasing at a much slower rate than at rival Target Corp., which is only one-sixth its size. High energy prices and low blue-collar wage growth are depressing the disposable income of its core customer base. At the same time, Wal-Mart is facing significant opposition to its move into the big-city market, and the labor movement is mobilizing unprecedented resources to confront the company. A string of controversies—the use of undocumented workers, alleged child labor violations, employees forced to depend on Medicaid for health coverage, etc.—has forced Wal-Mart to spend large sums trying to repair its public image.

As part of its strategy to regain momentum, Wal-Mart is escalating its movement into new lines of business. Over the past decade the company has had stunning success grafting huge supermarkets onto many of its general-merchandise outlets, revolutionizing the food business in the process. Now Wal-Mart is seeking to replicate that success in other areas. Not only does the company want to be your grocery, it wants to be your bank, your gas station, your pharmacy and probably any other service it can adapt to its high-volume, low-price model.

Wal-Mart’s aspirations are not just a corporate strategy story. Given the company’s enormous size, any move into a new field has dramatic consequences for the existing players, especially smaller businesses. It is a question, as a story on Forbes.com put it, of who will be “Wal-Mart’s next victims.”

BANKING AT THE CASH REGISTER

One of the longstanding complaints about Wal-Mart is that the huge sums of money passing into its coffers each day are quickly transferred to corporate headquarters, with little or no business given to local banks in the communities where stores are located. If Wal-Mart accomplishes one of its goals, the impact on local financial institutions will be even worse.

Since the late 1990s the company has been seeking to get into the banking business itself. It is not unprecedented for a large retailer to move into financial services. Sears Roebuck pursued such a strategy in the 1980s with the purchase of the Dean Witter brokerage house and the introduction of the Discover credit card--both of which were acquired by Morgan Stanley in 1997. Yet the prospect of a company as large as Wal-Mart entering the field, particularly retail banking, has generated intense opposition.

The battle erupted in 1999, when Wal-Mart filed an application to acquire Federal BankCentre, a small federal savings bank in Broken Arrow, Oklahoma. Community bankers lobbied Congress intensively and won passage of a bill that barred commercial firms from acquiring thrift institutions.

Wal-Mart responded in 2001 with an announcement that it would offer banking services to its customers through a joint venture with TD Bank USA, a subsidiary of Canada’s Toronto-Dominion Bank. Such a partnership was said to face lower regulatory hurdles than an outright acquisition of a bank. Yet the federal Office of Thrift Supervision reacted negatively to the plan, especially the idea that store employees would also work as bank personnel.

The next skirmish occurred in California in 2002, when Wal-Mart took a different approach and announced plans to purchase Franklin Industrial Bank. Although the Arkansas company claimed it was seeking only to reduce its costs in handling more than 35 million debit-card transactions a month, the California legislature promptly enacted a law barring non-financial companies from purchasing state-chartered banks, including industrial loan companies (ILCs) like Franklin that provide limited banking services.

Recently, a trade publication reported that Wal-Mart is preparing to apply for the right to open an ILC in Utah, one of a handful of states that allow non-financial corporations to own such institutions. “It’s not a question of if Wal-Mart’s going to be a bank,” a University of North Carolina finance professor told Business Week (February 7, 2005), “it’s a question of when.”

In the meantime, Wal-Mart has been expanding its offerings of other non-bank financial services. After resisting the idea for many years, in 1996 it introduced its first co-branded credit card—a MasterCard issued by Chase Manhattan—but the product was later dropped. In 1999 Wal-Mart teamed up with GE Capital to bring out its own private label card, which was aimed at its lower-income customers. Earlier this year, the retailer again joined with GE as well as Morgan Stanley to introduce a Wal-Mart Discover card.

For those customers who probably cannot qualify for any kind of plastic, Wal-Mart has been making a big push into services such as money transfers, money orders and check cashing. This includes an arrangement with SunTrust Banks under which several dozen Wal-Mart Money Centers by SunTrust have been opened.

In all these activities, Wal-Mart is shrewdly continuing its focus on low-income consumers, many of whom are shunned by commercial banks and are exploited by high-fee financial-service providers such as neighborhood check-cashing outlets.

PRESCRIPTION FOR GROWTH

Wal-Mart has long been in the drugstore pharmacy business; it celebrated the opening of its 1,000th pharmacy back in 1990. Since then it has made its way toward the top of the field and now trails only the industry giants: Walgreens, CVS and Rite Aid.

Wal-Mart did not get where it is today by settling for fourth place. Last year the company sought to improve its position by testing 24-hour pharmacy service at some of its stores. It also created a system called Easy Pay that allows pharmacy customers to pre-register a credit card to expedite the filling of prescriptions.

Analysts question the extent to which Wal-Mart can apply its usual business model to a field largely dictated by fixed reimbursement arrangements with public and private third-party payers. But that hasn’t stopped the bean-counters of Bentonville from trying to cut corners.

In fact, the company got itself in trouble with the feds for doing so. In June 2004, the U.S. Department of Justice announced that Wal-Mart had agreed to pay $2,866,904 to settle allegations that the company had submitted false prescription claims to federal health insurance programs such as Medicaid. The company’s pharmacies were alleged to have dispensed partial or “short” prescriptions due to insufficient stock, while it billed the government programs for the full quantities. The settlement amount in the case, which began as a whistleblower complaint, was to be divided up among the federal government, the District of Columbia, the states participating in the suit and a whistleblower. The company also agreed to enter into a Corporate Integrity Agreement with the Office of the Inspector General of the Department of Health and Human Services.

Wal-Mart has also fought against state efforts to control the amounts paid to the company for filling prescriptions for Medicaid participants. In 2000 Arkansas moved to reduce those payments to Wal-Mart and other large drugstores, arguing that the cuts were in line with the discounts that the chain pharmacies gave to HMOs. Wal-Mart protested the move and brought suit in federal court, claiming the policy violated the equal protection clause of the 14th Amendment. According to press reports, the company also quietly asked its employees to call the governor’s office to protest. A federal judge in Little Rock ended up ruling in favor of Wal-Mart and Walgreens, which had also joined the suit.

Another aspect of the pharmacy business in which Wal-Mart has generated controversy is the issue of overtime pay for druggists. The company has insisted on treating pharmacists as salaried employees who are not eligible for premium pay for extra hours. A federal court in Colorado had ruled against the company, but last month the 10th Circuit Court of Appeals ordered a new hearing in the case.

STEPPING ON THE GAS

In 1996 Wal-Mart entered into an with agreement Murphy Oil (also based in Arkansas) to begin installing gas stations in the parking lots of Wal-Mart stores, mainly in the southeast. Before long there were allegations that the operations, which used the Murphy USA name, were selling fuel at artificially low prices. Wal-Mart and Murphy found themselves being sued under little-known laws in about nine states that prohibited gas from being sold at below cost.

The companies fought back, painting themselves as friends of consumers. In Florida, for instance, they bankrolled a group called the Coalition for Lower Gas Prices. They also kept expanding the number of gas stations operated by Murphy via leases with Wal-Mart, reaching 500 across some 20 states by 2002.

This, in turn, has sparked efforts by legislators in states without prohibitions on low-cost gasoline sales to adopt such restrictions. Last year, a state representative in Kentucky accused companies such as Wal-Mart of using gasoline as a loss leader to attract customers for other products. The head of the Michigan Association of Convenience Stores warned: “If you drive the little guys out of the marketplace, there’s no one to compete with the big guys.”

Now Wal-Mart has apparently decided that the gasoline business is so attractive that it wants to sell fuel under its own name. In recent weeks, the company has begun installing its own pumps outside several Supercenters and Sam’s Club outlets in states such as Virginia and Missouri. Earlier this month a trade publication called Oil Express reported that Wal-Mart intended to have “up to 200 or 300 more within a year or so” and “could exceed 500 later this decade.” Given the recent rise in energy prices, Wal-Mart may see an opening for an even more rapid move into the field, making independent gas stations in some parts of the country an endangered species.

NO LIMITS TO GROWTH

As dismaying as these facts may be to those concerned about Wal-Mart’s size and power, it’s crucial to remember that the wizards of Bentonville are not infallible. One significant failure came in the area of auto sales. In 2002 Wal-Mart joined with Asbury Automotive Group in a pilot program called Price 1 to sell used cars in lots adjacent to Supercenters. After a year the initiative was terminated after it became clear that Wal-Mart did not have the expected drawing power.

Wal-Mart is willing to abandon ideas that do not pan out in the marketplace, but it is loath to give in to its opponents, whether from small business, labor unions, environmental groups or community organizations. “There’s no limit to Wal-Mart’s growth,” CEO Lee Scott once said. That’s not just a projection but a warning that the colossus of retailing will not be deterred in its campaign to transform the business world.

Links to some small-business advocacy groups concerned about Wal-Mart

American Independent Business Alliance

American Small Business Alliance

Hometown Merchants Association of America

Independent Community Bankers of America

National Association of Convenience Stores

National Community Pharmacists Association

National Grocers Association

National Trust for Historic Preservation and its Main Street Center

New Rules Project of the Institute for Local Self-Reliance

Petroleum Marketers Association of America

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Two for the price of one Wal-Mart plan avoids size limit by splitting store

By STEPHEN MANNING             [back to top]
Associated Press
March 24, 2005, 8:52PM

DUNKIRK, MD. - The fight last summer was similar to other big box battles across the country: Wal-Mart proposes a massive retail store, community groups rally against it, and local lawmakers pass restrictive zoning laws designed to keep the sprawling store out of town.

But the story of Wal-Mart's plans to build in the Calvert County town of Dunkirk has a unique sequel. Faced with limitations that would block plans for a 145,000-square-foot store, Wal-Mart came up with a way to circumvent the new rules — splitting the store in two.

Two separate Wal-Marts, standing next to each other but not connected, would be built on the site along four-lane Maryland 4, at the gateway to the fast-growing county in Washington's outer suburbs.

One would house Wal-Mart's retail section, the other a garden center. Both would share a parking lot. And both would be smaller than the 75,000-square-foot limit Calvert passed last year.

The Bentonville, Ark.-based company says this is the first time it has suggested splitting stores to get around restrictive zoning ordinances.

The company has to be adaptable as it meets resistance from local communities, Wal-Mart spokesman Mia Masten said.

Its Dunkirk proposal is legal and meets what company officials believe is demand from potential customers, she said.

"We have to be flexible with what we are given, so we modified our plan," Masten said. "We abided by the rules of the ordinance."

Plan on hold It's not guaranteed that the stores will be built — the county's planning commission put Wal-Mart's proposal to split the stores on hold while the Calvert Board of Commissioners decides whether the store-size ordinance needs to be changed. The company's proposal may be legal, said John Ward, the planning commission's chairman, but Wal-Mart is ignoring the message officials tried to send when the big-box caps were passed last year.

"It violates the intent of the regulation," he said.

Local residents who fought the original store were aghast when they discovered at a January meeting of the county planning board that Wal-Mart and its developer still planned to build in Dunkirk.

'Beast' not beaten "We thought we had beaten the beast, but apparently not," said Robin Gottlieb of the organization Calvert Neighbors for Sensible Growth. "If they come in saying, 'We are going to do what we want whether you like it or not,' it's disrespectful of the community's wishes and arrogant."

Bordered by the Chesapeake Bay and Patuxent River, Calvert County was once home mostly to farmers and watermen, far enough from Washington to be relatively untouched by urban life. But as the city's suburbs crept farther out, Calvert's population began to boom. Calvert had the biggest percent increase in population of any county in Maryland in the 2000 Census.

Much of that growth has centered on Dunkirk, a small town in the northern part of the county. Developments of large homes with expansive yards sprout off Maryland 4. Commuters heading to and from Washington crowd the road during rush hour.

That growth convinced Wal-Mart that Calvert was a ripe market, Masten said. Not only did the company propose the store in Dunkirk, but it also planned to expand its store in nearby Prince Frederick to a 187,000-square-foot Supercenter.

However, many in the county feared that two big Wal-Marts would drive local shops out of business and bring more unwanted traffic to the region.

Calvert Neighbors for Sensible Growth collected hundreds of signatures on a petition urging the county to toughen zoning laws to combat big-box stores.

Store cites research Although local officials tried to block Wal-Mart from building in Dunkirk, Masten said the company's market research convinced it that people in the region want a store.

"Customers were excited about having a Wal-Mart in Dunkirk," she said. "Customers should decide where they shop as opposed to officials."

Calvert Neighbors for Sensible Growth has urged county planners to study a zoning law written by the Idaho town of Hailey to keep big-box stores from building multiple stores on one site.

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As Wal-Mart Expands in Mexico, Opposition Grows

Tue Mar 22, 12:37 PM ET       [back to top]
By Lorraine Orlandi
Reuters

PATZCUARO, Mexico  - A Purepecha Indian center known for its mountain lake and mystical Day of the Dead ceremonies each November has become the newest battleground over Wal-Mart Stores Inc. in Mexico.

The world's largest retailer's proposed store in Patzcuaro is the second in six months to trigger opposition cast in nationalistic terms, pitting ancient traditions against U.S.-style capitalism.

"It's the Day of the Dead vs. Halloween," said Homero Aridjis, a writer who joined an unsuccessful campaign last fall to stop a Wal-Mart-owned store near the archeological ruins at Teotihuacan outside Mexico City. In that battle, the two sides came to blows.

Aridjis and other opponents say the Patzcuaro store, which is awaiting approval, would destroy small business in the heart of the Central Mexican mountain town and erode a way of life based on the familiar commerce of fruit stands, butcher shops and generations-old artisanry.

The fight against the discounter is inspired by successful challenges on Main Street, USA. In Mexico, though, resistance is spiced with national pride and no small dose of bitterness left from foreign conquest centuries ago.

"They fool us like the Spaniards did," said Patzcuaro printer Marco Antonio Garces. "They don't come on horseback, but they dazzle us with automatic doors and air conditioning. They'll trade Chinese junk for what little we have."

To Guadalupe Loaeza, a newspaper commentator and self-confessed Wal-Mart shopper, such talk sounds misplaced in a country where citizens toss garbage into the street and pay little mind to preservation.

The rhetoric really reflects Mexico's love-hate relationship with its powerful northern neighbor, Loaeza said.

"More and more, we import lifestyles resembling the American way of life," she said. "We feel seduced, and at the same time threatened."

In the past decade, Wal-Mart de Mexico, or Walmex, has become the nation's No. 1 retailer and largest private employer. It now has almost 700 stores and restaurants, using aggressive expansion and low prices to take business from established supermarkets.

"It's the convenience," said Leticia Aguirre, who welcomes Wal-Mart. The Patzcuaro mother of two chalks up opposition to sheer self-interest on the part of local merchants. "They're afraid the competition will be strong," she said.

MORE STORES, MORE OPPOSITION

Walmex has invested some $2.5 billion in Mexico. "We have a commitment to Mexico, a long-term view in this country," spokesman Raul Arguelles told Reuters.

But as Walmex plans to open 70 new stores this year, opposition spreads.

Mexico City merchants floated the idea of legislation to protect local business by limiting Walmex's growth. Walmex executives and industry analysts say singling out one company would be unfair and impractical.

"If our competition opens a store, does nothing happen to the businesses around it?" Arguelles said.

Proponents say Wal-Mart brings jobs, investment and keeps prices down in communities.

"Wal-Mart typically lowers the cost of food and general merchandise by 15, 20, 25 percent," said analyst Robert Ford of Merrill Lynch in New York. "Opponents feel strongly and are willing to take time to protest. The people that desperately need (Wal-Mart), they're working to get by."

Until last year, there was no visible organized opposition to Wal-Mart in Mexico, despite a vocal movement in U.S. neighborhoods to block the big-box stores.

Any resentment stayed mainly in Mexico boardrooms as established retailers reinvented themselves to survive.

The top three rival supermarket chains formed a purchasing alliance in 2003 to cut costs in hopes of winning back customers from Walmex with more competitive prices.

Then a Walmex-owned Bodega Aurrera store sprouted near the Teotihuacan pyramids -- potent symbols of Mexican heritage -- and popular anti-globalization sentiment was galvanized.

"It was like planting a stake in the heart of ancient Mexico," said writer Aridjis, who with other artists and intellectuals urged President Vicente Fox (news - web sites) to block the store.

It opened in November to cheers from budget shoppers.

Ironically, Wal-Mart may awaken consciousness about urban planning in Mexico. The Teotihuacan fight led the government to promise a long-term development plan for the archeological zone, and the Patzcuaro controversy has prompted similar soul searching over the future of this picturesque town.

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Outsmarting Wal-Mart Price isn't everything

A new report names 5 retail Davids thriving against the Goliath.

March 22, 2005: 9:22 AM EST               [back to top]
By Parija Bhatnagar
CNN/Money staff writer

NEW YORK (CNN/Money) - How do you outsmart Wal-Mart? By not trying to.

It sounds counterintuitive. But a new report says the secret to retailers' survival in a Wal-Mart world isn't about attempting to outrun the 800-pound retail gorilla but about the ability to maneuver around it, according to a recent study entitled "Outsmarting Wal-Mart" from the global retail practice unit of New York-based consulting firm Bain & Company.

So who's thriving in a Wal-Mart (Research) world?

The report's authors, Darrell Rigby and Dan Haas, picked Best Buy (Research) in consumer electronics; Walgreen (Research) in pharmacy products; Wal-Mart's arch-rival Target (Research) in the discount arena; PetsMart (Research) in pet supplies; and privately held regional chains HEB and Publix among grocers.

The CEO of one successful Wal-Mart competitor was quoted in the report as describing his strategy as the following: "It's like the two outdoorsmen who wake to find a raging bear at their campsite," he said. "One camper slowly stands and backs away; the other starts to lace up his sneakers. 'You can't outrun the bear!' whispers the first. 'I don't have to,' replied the second. 'I just have to outrun you!'"

Competing with Wal-Mart, the world's largest retailer, on price alone is futile. Wal-Mart's mantra of "everyday low prices" may as well be written in stone.

That's how it pounded its rivals and built it $288 billion retail empire -- setting prices not just below the competition but close to rock bottom while still making a profit.

"Wal-Mart clearly wins on price, and to a lesser degree, selection -- but nowhere else," the report said. "Price isn't everything."

According to Rigby and Haas, these retailers have successfully managed to "co-exist and even thrive" in the same forest as Wal-Mart because they focused not just on boosting sales but on becoming the best in their arena in terms of quality, product selection, in-store service and convenient locations.

"Two-thirds of shoppers find Wal-Mart's assortments, middling product quality and limited services not worth the savings," the report said. "That means, regardless of Wal-Mart's proximity, there are plenty of customers looking for alternatives."

Holiday problems Wal-Mart learned that lesson this past holidays when shoppers snubbed the discounter after it not only scrimped on holiday discounts but also lacked an exciting array of hot products.

Bain & Company research, which was published in the Harvard Business Review, found four factors that have helped companies such as Best Buy or Target do well despite Wal-Mart's formidable presence in their market.

First, these companies have quickly captured market share by gobbling up less profitable competitors, or by buying the assets of dying rivals.

The report singles out Target as an example, saying the company was able to win over customers that were once loyal to now-defunct discount chains such as Bradlees, Ames and Caldor. More recently, Target has distanced itself from Wal-Mart through its popular offering of low-priced trendy, designer-created clothing and home products.

Second, even if Wal-Mart takes 30 percent of any regional market that it enters, that still leaves 70 percent of the market for other retailers to serve customers in better ways than Wal-Mart. Wowing the customer is one critical way to build customer loyalty, the report said.

Rigby, who is head of Bain's Global Retail unit, cites Best Buy as an example. "Best Buy outsmarted Wal-Mart by carrying a deeper assortment and better quality of products," Rigby said. "Additionally, the company differentiates itself from Wal-Mart by the services it provides to its customers, such as its in-house repair team called the 'Geek Squad."

It's the same story with PetsMart, he said. "The retailer offers more variety of pet products than Wal-Mart. Pet lovers probably also like the fact that they can bring their pets into a PetsMart, which is something that Wal-Mart would probably frown upon."

Third, even if they can't squarely match Wal-Mart on price, it's still important that retailers sharpen their prices to become more competitive. One way to do that, the report suggests, is for companies to train local store managers to identify pricing opportunities and challenges and quickly respond to them.

Finally, Rigby and Haas find that since market prices generally decline by about 10 percent when Wal-Mart enters a market, it's vital that companies playing in Wal-Mart's playground keep operations tight, reduce operating costs and eliminate supply chain redundancies.

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Union applies to certify Wal-Mart store in Gatineau, Que.

Mar 22                          [back to top]
The Canadian Press

A Canadian union is making another attempt to unionize workers at a Quebec store run by U.S. retail giant Wal-Mart, this time in Gatineau.

United Food and Commercial Workers Canada said Monday it has applied to certify workers at the Wal-Mart store in Gatineau, a suburb of Hull, in the National Capital Region. The move comes a month after the world's largest retail chain announced it will close in May a Wal-Mart location in Jonquiere, Que., where workers had been trying to negotiate their first contract.

The move in Gatineau continues the union's ambitious drive to organize workers at Wal-Mart, which is almost entirely non-union across North America. The UFCW has received union certification for auto repair shop employees at the Wal-Mart store in St-Hyacinthe, Que., though Wal-Mart workers in Windsor, Ont., voted two weeks ago against unionization.

Two separate applications for union certification were filed with the Quebec Labour Relations Commission for the store in Gatineau: one for workers inside the main store and a second for employees at the store's Tire and Lube Express shop.

"Wal-Mart will have to get used to this. Employees are firmly committed to improving their working and living conditions, and we are there to support them," Guy Chenier, president of UFCW Canada local 486, said in a release.

The union local represents more than 2,000 members working in the retail sector in Quebec's Outaouais region. It is affiliated with the FTQ, Quebec's largest union confederation with 500,000 members.

The union drive in Quebec will have to continue without one of its leaders after Marie-Josee Lemieux died Sunday of a heart attack. She was 40 years old.

Lemieux was president of Local 503, which succeeded in organizing the store in Saguenay, Que., about 250 kilometres north of Quebec City. The company later cited unprofitability for its decision to close the location May 6.

© The Canadian Press

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Lone Star Showdown

Supermarkets are struggling in Dallas-Fort Worth, where Wal-Mart wears the badge

by Jon Springer            [back to top]
Supermarket News

As the cliché goes, everything is bigger in Texas. That certainly applies to food retailing in the Dallas-Fort Worth market. Wal-Mart Stores’ evolution into a force in food retail looms bigger there than virtually any metro area in the country. Since the Bentonville, Ark.-based mass merchant selected the Dallas-Fort Worth area to experiment with placement of both its supercenter and Neighborhood Market concepts, it has grown to the point where it has not only caught the leaders in market share –it is pulling away as well. That’s meant bigger threats to national supermarket operators, which are challenged in DFW not only the pressure to keep prices and costs near Wal-Mart’s, but also by the need to differentiate from it. Along the way, big mistakes in previous strategies have been exposed, and big risk in format evolution and operations are being undertaken. There’s also a big danger that Texas juggernaut H.E. Butt Grocery will expand its presence in Dallas after success in other Texas markets against the very same competitors. “Dallas is a market where Wal-Mart’s super centers rule,” Perry Caicco, a supermarket analyst for CIBC Word Markets, Toronto told SN. “Their amazing growth has left the local competition in shock.” Specifically, Wal-Mart’s gains have accompanied retreating market share for many operators, including Albertsons, Boise, Idaho, which at one time enjoyed a comfortable lead, especially in Fort Worth. Yet today it is left converting some stores to the discount SuperSaver format, and attempting to control costs through labor cuts and technology initiatives. “I think Dallas-Fort Worth is by anybody’s definition the toughest retail market in America,” Larry Johnston, president and chief executive officer of Albertsons, said in a conference call last week. “Yes, we’re learning a lot there. Quite frankly, it is an interesting laboratory to understand how to complete in a new competitive paradigm where you have a tremendous amount of low price impact formats in the marketplace. We’re learning everyday how to become more efficient there.” Pleasanton, Calif.-based Safeway, which reentered the Dallas market through its purchase of the Tom Thumb chain, stumbled badly when local shoppers rejected changes it made to the one-time local favorite and is now trying to win back shoppers by upgrading stores through “lifestyle” renovations. Rumors of asset sales and market exits trial both Albertsons and Safeway, observers said. Kroger, Cincinnati, has benefits some from it s conventional rivals’ struggles, but observers have expressed concern about its ability to truly differentiate. “One reason why Wal-Mart has done so well in Dallas is because the competition has been particularly weak,” David J. Livingston, a Pewaukee, Wis.-based consultant, told SN.

PERFECT STORM FOR WAL-MART
Wal-Mart’s rise to the top of the Dallas-Fort Worth market took around 15 years and, observers said, a set of circumstances uniquely suited to its strengths. These include a growing population with a large percentage of Hispanic shoppers; sprawling real estate with an extensive highway network, creating a development climate favorable for cheap accumulation of large parcels of land; and, relative to other metro markets, a lack of opposition in the form of concerned residents, labor unions or a particularly strong local supermarket competitor. “Dallas offered the perfect marketing conditions for Wal-Mart to come in and do what they did,” Neil Stern, partner in the retail consulting firm McMillan Doolittle, Chicago, told SN. Wal-Mart today operates 51 food-and-general-merchandise supercenters, 19 Neighborhood Market grocery stores and 19 Sam’s Club stores in the Dallas-Fort metropolitan statistical area, combining for overall grocery volume of 22%, according to the 2005 edition of the Grocery Distribution Analysis and Guide from Metro Market Studies, Tucson, Ariz. (The Dallas-Fort Worth MSA includes 11 counties and 5.7 million residents.) The concentration of Neighborhood Market stores has helped fill gaps between wide drawing supercenters and allowed Wal-Mart to chip away at the advantage of convenient locations that typically belongs exclusively to traditional supermarkets. “Wal-Mart has continued to add significant square footage to what was already a pretty large footprint,” a Dallas-area food broker who asked not to be identified told SN.” Where I live, there are four Wal-Mart units within a four-mile radius of my house-two Neighborhood Markets and two supercenters. “They’ve done a good job keeping them clean and making them just nice enough to meet minimums of shopper acceptability,” the broker added. “That’s helped them attract a whole new set of consumers. Years ago, I would have never imagined someone from (upscale neighborhoods such as) Highland Park or Southlake going into a Wal-Mart store.” The price-conscious consumer remains Wal-Mart’s biggest target, and in DFW, that group includes a fast-growing Hispanic population, Mark Husson, managing director, HSBC Securities, New York, told SN. That complicates efforts of traditional retailers to skew too upscale in their attempt to differentiate from Wal-Mart, Husson explained. The growing population in Dallas has contributed to sprawling geographic growth, observers added. This suits Wal-Mart because its expansion is tied to the availability of large tracts for new stores. Building those stores tends to generate less opposition in Texas than in other states that might have large union workforces, tight real estate, or both. “Texas has always been a live-and-let-live state,” Livingston said. “There are not a lot of handwringers worried about Wal-Mart.” While Wal-Mart calls Arkansas it's home base, that’s closer than the home offices of many of its competitors, Independents in DFW command only small fractions of the market, Caicco noted. “This means that much of the original speculation about supercenters impact was true: The smaller local players are affected first,” Caicco said in a research note. Minyard’s, based in nearby Coppell, Texas, is the largest local, controlling around 9/3% of the market, according to Metro Market Studies. However, that chain was sold late last year to an investment firm when its former family owners cited, among other reasons, the difficulty of competing in the market. Ron Johnson, who now runs the chain, told SN in November he felt Minyard’s could regain momentum through refurbished stores and consumer research but declined to comment on progress since then. Faced with those conditions, traditional supermarket operators in DFW today are left attempting to carve out a niche, but the pressure to do so while staying within arm’s length of Wal-Mart’s prices is tricky and costly. “The opportunity for supermarkets in Dallas is to provide what Wal-Mart is not providing, and that means straightforward branding and brand segmentation,” said Husson. “The problem is they have to nod to the Hispanic shopper and the other demographics there, there’s so much price pressure you can’t be too far away on price, and you’ve got to be Texan, meaning you have to merchandise right in the store. The barbecue sauce in North Dallas is different than the barbecue sauce in southern Dallas. You have to do all that, and then be special on top of it.” New store development for traditional grocery stores has practically dried up, Bob Ginsburg, vice president of real estate services firm CB Richard Ellis in Dallas, told SN. “The immediate impact of Wal-Mart from the real-estate standpoint is there’s been a slowdown in grocery anchored site development,” Ginsburg said. “Albertsons did no new stores last year, Safeway did one new and one relocation, and Kroger did just two new stores in the entire market. We’re not seeing anywhere near the expansion we did in the 1990s.”

ALBERTSONS’ MULTITIERED STRATEGY
Despite a presence of 102 stores and market share of around 17% in Dallas-Fort Worth, Albertsons faces significant challenges there, observers said. The chain suffers from poor brand development and has taken a hard hit from discount competition, observers said. “No local grocer is in as precarious a situation as Albertsons in our view,” Caicco said in a recent research note. The company is fighting back on multiple fronts ranging from new format introductions to technology upgrades to aggressive price promotions and massive cost cuts – efforts Caicco described as designed to “shock treat” life back into the franchise. Nine of Albertsons’ lower-volume stores have been converted in recent months to the Supersaver extreme discount format, with other conversions rumored. (A spokesman for Extreme, the Albertons’ division that operates the stores, declined to provide a precise number.) Supersaver stores are a “good direction” for Albertsons, Caicco said, because they require only a fifth of the capital investment of a traditional store and have significantly lower costs in areas such as labor. However, he added that the converted Albertsons boxes –some of which are around 70,000 square feet –are probably too large than ideal for the vehicle. “So far, it’s just a handful of Supersavers but the rumor is there’s going to be a lot more,” a local food broker told SN. “They’ve started to do a little advertising, which is interesting because initially they weren’t. It remains to be seen whether the consumer will associate that brand with good prices and a good shopping experience. It will take time.” Stem said Albertsons’ two-pronged retail store strategy is “very intelligent if executed properly, but leaves the question of what to do with the other (conventional) Albertsons stores. They need to upgrade the quality of those.” Albertsons is drawing foot traffic to its conventional stores in Dallas behind an aggressive “check the price” program, which lowered prices on around 150 products to levels that approach Wal-Mart. However, the abundance of area Wal-Mart stores to match in price has made the margin investment a costly one. “Unlike Chicago, where Albertsons only lowers prices in stores that are close to discount competitors, in Dallas it has to be done in every store because it’s so easy to travel to a Wal-Mart,” Caicco said. Albertsons has also made modest investments in renovations to certain conventional stores but at the same time has slashed costs for labor. In DFW, according to Caicco some store managers are managing two stores at once and district managers cover as many as 30 stores. Livingston said spreading store managers thin “is usually a sign that stores will close.” Further cost cutting and a deliberate move to achieve Wal-Mart like efficiencies could come through the introduction of radio frequency identification tags, which Albertrsons is rolling out first in Dallas. The chain also uses technology as an aid in the store experience through the use of shop-and-scan wands, which the company also introduced in Dallas.

LOCAL HERO WANTED
Safeway’s plan to introduce cost efficiency, quality and profitable growth to the Tom Thumb chain –an admirable goal for Safeway when it acquired the chain along with Randalls Markets stores in Houston in 1998 – went awry when psychological costs of those changes arose unexpectedly. Safeway, which operates 70 Tom Thumb stores in DFW and controls around 13.8% of volume, underestimated the power of local tastes, sources said, and is still trying to recover. According to local observers, Safeway’s introduction of private-label brands in place of traditional Tom Thumb selections – in particular, dropping Boar’s Head deli meats – was a costly mistake demonstrating Tom Thumb’s new owners didn’t understand the local market. Kroger summarily scooped up Boar’s Head – a brand that was well regarded locally – and a fair amount of Tom Thumb’s disappointed shoppers. “I don’t think Safeway did anything that made it worse: The Safeway private brand is actually very good quality and a very good value,” Husson said. “But the fact is, it’s not Texan, and the retailers really didn’t understand the reaction would be as intense as it was.” “Tom Thumb was the local upscale store and when Safeway got involved it went to what I’d consider a more traditional format,” added a local food broker. “It was the kind of thing that will push up an upscale shopper away from your venue.” Rumors have circulated that Safeway is searching for a buyer for Tom Thumb and Randalls, but the company has not commented. One observer told SN recently that Safeway “has put a price on it and is just waiting for someone to match it.” Some speculate that Tom Thumb could provide an entry into Dallas for H-E-B, which has a long record of success in other Texas markets and could provide the “local hero” shoppers here evidently miss. Kroger has used Safeway’s troubles as an invitation to move up market in Dallas, but like it’s conventional competitors, the cost of staying near Wal-Mart in price continues to be a significant challenge. Kroger operates 77 stores in DFW and has 14% market shares, Metro Market Studies said. Kroger operates several “signature” stores in Dallas – 80,000-square-foot boxes featuring amenities like in-store cafes that aim toward a void of upscale shopping in the metroplex but remain strongly committed to price. Caicco noted, however, that Kroger’s stores there tend to be “strong in price programs (and) weak in innovative merchandising,” adding that the natural and fresh departments at Kroger stores “give an impression it is not truly committed” to differentiating the shopping experience, and risk losing out on margin-building opportunities they might otherwise provide.

WHAT’S NEXT
The struggles of traditional grocery stores in Dallas point to need for more consumer research and better commitment to execution, David S. Rogers, president of DSR Marketing Systems, Deerfield, Ill., told SN. “The major chains can’t beat Wal-Mart by talking about service and perishables and then not delivering it,” Rogers told SN. “In Dallas-Fort Worth, not only do you have to be close to Wal-Mart on price but you really have to execute better. And I mean, really.” In rural Victoria, Texas, such an example was set by H-E-B, which, according to a recent study released by DSR, increased its market share in the 10-year period, the study noted. “H-E-B has reacted t o Wal-Mart very strongly,” Rogers said. “They have a fighting spirit and are focused on the consumer rather than the supplier. Traditional chains could learn an awful lot from them. One day it’s inevitable that H-E-B rolls into Dallas with conventional stores and they’ll use the ‘we’re from Texas’ pitch. Though a powerhouse in other Texas cities, San Antonio-based –H-E-B has but a mall presence in Dallas, operating six Central-Market stores and two conventional H-E-B Food Stores in the metroplex, accounting for 2.7% market share. While Dallas appears to be a logical next step for H-E-B, one local observer told SN he doubted such a move was imminent because the chain’s first priority is an ongoing battle with Wal-Mart and Kroger in Houston. The natural/organic niche is still underdeveloped in Dallas, sources said. Aside from Central Market’s six stores, Whole Foods Market, Austin, Texas, operates just five locations. Market Street, stores emphasizing fresh foods and service operated by United Supermarkets, Lubbock, Texas, are well regarded locally, sources said, but just two locations currently exist. Analysts said the situation in Dallas could provide lessons for other metro areas in Wal-Mart’s path, including the importance of devoting resources toward local market knowledge and brand development while keeping a sharp eye on costs and prices. “It’s important to do research and make changes in a preemptive fashion, before Wal-Mart dominates, “ Nick McCoy, senior consultant of Retail Forward, Columbus, Ohio told SN. “What (supermarkets) have to realize in other cities is that whether Wal-Mart is strong where they are or not, it probably will be eventually.” The Dallas market will likely see more changes ahead. “Dallas is a classic situation where somebody’s going to end up leaving,” Stern contended. “There’s too many players and too much competition for it to be a viable market for everybody who’s there now.”

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Wal-Mart vs. Class Actions

The retail giant's novel defense in a massive suit could rewrite the playbook

By Aaron Bernstein in Washington                [back to top]
MARCH 21, 2005

Corporate America could find it a whole lot easier to fight off employment class actions if Wal-Mart Stores Inc. (WMT ) prevails in a sex discrimination case to be heard soon by the U.S. Ninth Circuit Court of Appeals. Indeed, a Wal-Mart victory could tilt the playing field for virtually all of these kinds of suits, which have plagued Boeing (BA ), Coca-Cola (KO ), and dozens of other large employers over the years.

Wal-Mart's ambitious legal strategy strikes at the heart of what it means to file a class action. The company maintains that its constitutional rights would be violated if the court allows a suit to go forward involving up to 1.5 million of the retailing giant's current and former female employees. Because such a case would deprive the company of its rights to defend itself against each woman's claim, it argues, the courts should allow suits only on a store-by-store basis. If the Ninth Circuit agrees and strikes down the multistate action certified by a lower court, it would likely kill the largest employment class action in U.S. history. More broadly, it would open wide the door for all large companies to make similar arguments. "A victory for Wal-Mart might mean that plaintiffs can't bring nationwide class actions anymore and that they might have to do them locally or regionally," says Mark S. Dichter, a management-side employment lawyer at Morgan, Lewis & Bockius LLP.

Wal-Mart's case is no slam dunk. A few companies have tried similar arguments in bits and pieces and gotten nowhere. But Wal-Mart is the first to tackle the constitutional issues head-on, say Dichter and other experts. Certainly, it faces tough odds at the Ninth Circuit, one of the nation's more liberal federal appeals courts. Instead, it's probably aiming for the more conservative U.S. Supreme Court, say experts. At the same time, Wal-Mart has been hedging its bets by engaging in settlement talks with the plaintiffs for several months, say lawyers involved.

COURT-CLOGGER? Still, the question is whether Wal-Mart's suggested store-by-store alternative makes sense. After all, the most extreme outcome -- thousands of mini class actions -- would clog the U.S. courts for years. Even the company's own prediction that plaintiffs could have grounds to bring discrimination claims at no more than 10% of its 3,400 U.S. stores would qualify as a lawyer's full-employment act. Of course, Wal-Mart may simply believe that few store-level cases would be filed in the end, although Wal-Mart's lawyers deny that. Still, "if even 100 suits were brought, it would be a mess for Wal-Mart," warns Joseph M. Sellers, a partner at Cohen, Milstein, Hausfeld & Toll who represents the plaintiffs.

The case began in 2001, when a group of female Wal-Mart employees sued, claiming that the world's largest retailer systematically paid women less than men in the same jobs and promoted men ahead of similarly talented women. Last June a Northern California District Court judge granted the plaintiffs class status, allowing them to sue on behalf of all women who had worked at Wal-Mart's U.S. stores since December, 1998. Wal-Mart quickly appealed the class certification to the Ninth Circuit, which is due to set the hearing date any day.

The thrust of Wal-Mart's appeal is that the district judge ran roughshod over the company's constitutional rights to due process and to a jury trial. Despite the company's reputation for micromanaging down to the penny, it argued that pay and promotion decisions are made almost entirely by local store managers. So the judge should have ignored the plaintiffs' statistics showing large nationwide disparities in the way female employees are paid and promoted. Instead, it should hear only store-level suits.

Doing otherwise, the company says, would leave it unable to prove that an individual was paid correctly or properly passed over for promotion. So it could be forced to pay for something it didn't do. That would be a clear violation of the Fifth Amendment's requirement that "no person shall be...deprived of life, liberty, or property without due process of law." Says Theodore J. Boutrous Jr., a Wal-Mart lawyer at Gibson, Dunn & Crutcher LLP: "When you're talking about taking money from one citizen and giving it to another, you can't just rely on aggregate statistics, which don't tell you who is actually discriminated against."

The problem, of course, is that this logic undercuts the very concept of class actions. The point of grouping many employees together into one lawsuit is to deal with complaints that they hold in common. In employment discrimination cases, the problems usually involve disparate policies or practices by the corporation. Indeed, the plaintiffs' response is that broad workforce data are actually more reliable than individual hearings in such cases. They point out, for example, that the retailer promoted hourly workers using a "tap-on-the-shoulder" method, in which employees couldn't apply for a position and store managers singled out promising candidates when vacancies occurred. So it would be impossible to tell now which individual women would have qualified for a promotion even if there had been no discrimination. "In these circumstances, the use of workforce data to compute aggregate monetary relief 'has more basis in reality...than an individual-by-individual approach,"' the plaintiffs say, citing a prominent 1974 class action.

The two sides disagree just as strongly about which approach would be fairer to the individual women involved. If the court uses aggregate company statistics, as is typical in such cases, then women who never had any desire to become managers could get back pay or damages they're not entitled to, points out John Beisner, a class action attorney at O'Melveny & Myers LLP who filed an amicus brief supporting Wal-Mart on behalf of the U.S. Chamber of Commerce. Or those who suffered egregious discrimination at one store would get nothing if Wal-Mart wins. "That's the Hobson's choice you get when you hand juries these giant cases," he says.

The plaintiffs argue that rough justice is better than no justice at all. They say that in the nationwide class approach, Wal-Mart's total liability would be set by looking at how all female employees fared across the company. If some of that money went to women who didn't actually suffer, then women who did experience discrimination might get less than they should have. But Wal-Mart itself would be no worse off.

Wal-Mart's sheer size puts it in a category all its own. If it succeeds in cutting class actions down to bite-size pieces, large -- and not so large -- employers could end up benefiting.

Copyright 2000-2004, by The McGraw-Hill Companies Inc.

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Wal-Mart faces new union bid

Monday, March 21, 2005 Updated at 2:34 PM EST        [back to top]
Canadian Press

HULL, Que. — A Canadian union is making another attempt to unionize workers at a Quebec store run by U.S. retail giant Wal-Mart, this time in Gatineau.

United Food and Commercial Workers Canada said Monday it has applied to certify workers at the Wal-Mart store in Gatineau, a suburb of Hull, in the National Capital Region.

The move comes a month after the world's largest retail chain announced it will close in May a Wal-Mart location in Jonquiere, Que., where workers had been trying to negotiate their first contract.

The move in Gatineau continues the union's ambitious drive to organize workers at Wal-Mart, which is almost entirely non-union across North America. The UFCW has received union certification for auto repair shop employees at the Wal-Mart store in St-Hyacinthe, Que., though Wal-Mart workers in Windsor, Ont., voted two weeks ago against unionization.

Two separate applications for union certification were filed with the Quebec Labour Relations Commission for the store in Gatineau: one for workers inside the main store and a second for employees at the store's Tire and Lube Express shop.

“Wal-Mart will have to get used to this. Employees are firmly committed to improving their working and living conditions, and we are there to support them,” Guy Chenier, president of UFCW Canada local 486, said in a release.

The union local represents more than 2,000 members working in the retail sector in Quebec's Outaouais region. It is affiliated with the FTQ, Quebec's largest union confederation with 500,000 members.

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DollarDays International president Marc Joseph tells how to “beat Wal-Mart”

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Although small, independent retailers can’t expect to compete with Wal-Mart Stores Inc. on commodity item pricing, they can out-perform Wal-Mart in the merchandising of unique products that don’t fit into the big-volume purchasing policies of big retailers, Marc Joseph, president and COO of Internet-based wholesaler DollarDays International, says in a new book, “The Secrets of Retailing or How to Beat Wal-Mart”.

Joseph, a former merchandising executive with Federated Department Stores Inc., says local retailers fail when trying to compete against Wal-Mart by offering ordinary merchandise that Wal-Mart can usually sell at a lower price. “Let`s admit upfront that there may be some truth in the low price complaints for run-of-the-mill goods because it is true that the giant discounters do buy them at lower prices than any independent can obtain,” he says. “However, when it comes to more specialized and not necessarily more expensive merchandise, Wal-Mart and the other giant discounters are actually at a disadvantage to the small retail store.”

But while Wal-Mart can buy in large closeout quantities, it can`t to afford to buy in small quantities, which give independents the huge advantage of selling opportunistic products showing great value, Joseph says. In addition, because of a limited supply of unique and different items, Wal-Mart and other large chains can`t buy them in sufficient quantity, leaving the small, independent merchant a chance to offer different merchandise, Joseph says.

Joseph adds that small retailers can also operate with lower overhead costs and more personalized service. “None of this is to say that the discounters do not offer serious competition,” Joseph says. “Of course they do. The point is that, contrary to the complaints you hear from retailers driven out by Wal-Mart, even the largest, most aggressive discounter is nowhere near strong enough to stop a small retailer who knows what it’s doing.”

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Wal-Mart escapes criminal charges in case

By Chuck Bartels            [back to top]
Associated Press
March 20, 2005

LITTLE ROCK --Wal-Mart Stores Inc. escaped criminal charges but agreed Friday to pay $11 million, a record fine in a civil immigration case, to end a federal probe into its use of illegal immigrants to clean floors at stores in 21 states.

A dozen contractors who actually hired the laborers for work inside stores for the world's largest retailer agreed to plead guilty to criminal immigration charges and together pay an additional $4 million in fines.

"This case breaks new ground not only because this is a record dollar amount for a civil immigration settlement, but because this settlement requires Wal-Mart to create an internal program to ensure future compliance with immigration laws by Wal-Mart contractors and by Wal-Mart itself," said Michael J. Garcia, assistant secretary for U.S. Immigration and Customs Enforcement.

"We plan to use this settlement as a model for future cases and efforts in worksite enforcement," he said.

Wal-Mart received a target letter from a grand jury in Pennsylvania and was the subject of an October 2003 raid spanning 21 states and 60 stores. The raids led to the arrest of 245 allegedly illegal immigrants.

Wal-Mart, which has 1.2 million domestic workers, had pledged its cooperation in the investigation.

"We are satisfied that this is being settled as a civil matter," Wal-Mart spokeswoman Mona Williams told The Associated Press from the company's Bentonville headquarters. "Despite a long, thorough and high-profile investigation, the government has not charged anyone at Wal-Mart with wrongdoing."

Federal officials said the fine money would go to the Treasury Forfeiture Fund and will be spent on "promoting future law enforcement programs and activities in this field by U.S. Immigration and Customs Enforcement."

Williams said the government can spend the money for training and initiatives that "help make sure service companies or anyone else can't prey on undocumented workers."

"We think the money will be well spent," Williams said.

Williams, in a conference call later, made reference to Wal-Mart's "ongoing partnership with the government" and said the company is making a number of changes.

No longer does Wal-Mart employ outside contractors to clean its floors. Companies that do contract work for other chores will have stricter rules to follow to win those contracts, and upper management will have to approve contracts of more than $10,000, Williams said.

"We've put stronger internal controls in place so hopefully nothing like this would happen again," Williams said.

The probe began in 1998 and ended with the big raids on Oct. 23, 2003.

Among those arrested in the raids were eight people who worked for Wal-Mart itself. Williams said the eight had been hired from floor cleaning companies as Wal-Mart began to clean its floors with its own workers. Williams said those workers had documents that appeared to be valid and said the law prevented the company from challenging those documents.

"We were between a rock and a hard place," she said.

Williams said no executives or mid-level managers knew the contractors had hired illegal immigrants, a statement reflected in the consent decree.

Workers picked up in the October raids came from 18 different nations, including 90 from Mexico, 35 from the Czech Republic, 22 from Mongolia and 20 from Brazil, officials said. In all, two separate investigations resulted in arrests of 352 illegal immigrants contracted as janitors at Wal-Mart stores. Officials say a third of the workers have been deported to their home countries. Lawyers for some of the workers claim they worked as many as seven days a week, were not paid overtime and did not receive injury compensation.

An employer can face civil and criminal penalties for knowingly hiring illegal immigrants or failing to comply with certain employee record-keeping regulations.

Once investigators moved in, Wal-Mart told its executives to preserve documents. Federal agents didn't wait and took boxes from the office of a mid-level executive at the company's Bentonville headquarters. That executive still works for the company, Williams said.

About a year before the raids, Wal-Mart had started to bring the work in-house. The company said it had used more than 100 third-party contractors to clean more than 700 stores nationwide. At present, the company has 3,703 stores in the United States.

Wal-Mart Stores had sales last year of $288.19 billion.

States in which the raids occurred include: Alabama, Arizona, Arkansas, Connecticut, Delaware, Kentucky, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and West Virginia.

Wal-Mart shares fell 88 cents to close at $51.45 in Friday trading on the New York Stock Exchange.

© Copyright 2005 The New York Times Company

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Wal-Mart's Calif. Supercenters Delayed

Dozens of New Wal-Mart Supercenters Delayed by Environmental Lawsuits in California

By JIM WASSERMAN              [back to top]
The Associated Press
Mar. 20, 2005

As Wal-Mart Stores Inc. tries to plant dozens of new supercenters in California, lawyers aligned with a variety of opposition groups are using California's tough environmental laws to stall the nation's largest retailer.

A handful of lawyers have sued more than 30 cities that approved the 200,000-square-foot combination grocery and department stores, claiming local officials hungry for sales taxes have miscalculated their environmental consequences.

In many cases, the suits have been filed on behalf of obscure, often secretive community groups. Some have been backed by labor unions leading an anti-Wal-Mart fight in California, while others have few apparent sources of money.

They're delaying the opening of some stores by months or years and slowing Wal-Mart's plan to build up to 40 new supercenters in a state that's one of the company's few major U.S. growth opportunities. The suits also come at a time when the unions representing grocery store workers, primary the United Food and Commercial Workers, and Wal-Mart's competitors are worried about the effects of the discounters in California.

The suits haven't stopped the company from opening any stores, said Peter Kanelos, a company spokesman. "All they've done is delay the stores."

At least seven attorneys throughout California have filed lawsuits that claim the new stores violate the California Environmental Quality Act, a strict 1970 law signed by former Gov. Ronald Reagan. The law, frequently used by development opponents in California to force delays, drive up costs and discourage developers, has tougher requirements for analyzing environmental impacts than most other states in which Wal-Mart operates.

While not all the lawsuits filed on behalf of groups like Maintain Our Desert Environment, Communities Against Blight and Citizens for Sensible Traffic have prevailed, many other Wal-Marts approved by California cities are tied up in the lawsuits.

While Texas has more than 200 and Florida more than 100, California has only three of Wal-Mart's 1,700 supercenters nationwide. Another three are under construction in California.

Opponents' "whole purpose is to delay, delay, delay, cause turmoil and hope to get Wal-Mart go away," said Craig N. Beardsley, a Bakersfield lawyer who represents one of California's biggest developers.

His client, Castle & Cooke Inc., saw its local Wal-Mart supercenter halted last year during construction. Its four blank walls and roof now stand lifeless next to other thriving newly opened stores.

"Maybe two years from now we will build a store," Beardsley said.

The Fifth District Court of Appeal in Bakersfield ruled Dec. 13 against Wal-Mart and the developers, saying Bakersfield failed to analyze potential physical decay citywide as two Wal-Mart supercenters caused other businesses to close and leave shopping centers vacant.

The court's first-of-its-kind ruling on physical decay has thrown up even higher environmental hurdles for California cities considering Wal-Mart supercenters. Cities that once considered effects on wildlife and air quality must now study a ripple of potential economic effects as well and determine if a new supercenter is worth vacant buildings elsewhere. The three appellate judges ruled that examples of urban decay from other cities and states are also valid considerations for a California city analyzing a supercenter project.

"It makes it tougher to go through the whole environmental review process" and get approval from cities, said Walnut Creek attorney Stephen Kostka, an environmental law specialist who called the ruling an "atomic bomb" for shopping center developers.

But it's also encouraged opponents of Wal-Mart supercenters in other states, said Stockton attorney Steve Herum, who challenged the two Bakersfield supercenters and eight others.

Beardsley and Wal-Mart say such lawsuits in California are being backed by the United Food and Commercial Workers union, which is fighting Wal-Mart's entry into the state's grocery market and fearing it will put downward pressure on wages and put stores where its members work out of business.

"No one will admit anything and I couldn't swear on a stack of bibles that that's the way it is," Beardsley said. "But we all believe that to be true."

Beardsley also cited other grocery chains as suspects, primarily Modesto, Calif.-based Save Mart. A company spokeswoman had no immediate comment to questions about whether the company had any role in the lawsuits.

Last year, rival supermarket chains locked out union workers in Southern California as they attempted to negotiate new contracts that would allow the companies to better compete against Wal-Mart's lower wages. That prompted a 4 1/2-month strike that caused hundreds of millions of losses for the grocers.

The UFCW, a 1.4 million-member union of grocery store workers, is one of Wal-Mart's biggest foes nationally, claiming that nonunion supercenters threaten their jobs. The union's Web sites are filled with anti-Wal-Mart sentiment and the union's members show up at California's city halls to oppose supercenter plans.

Union spokeswoman Jill Cashen acknowledged the union backed "four or five lawsuits in California" but said there are another 25 or 30 suits in which UFCW isn't involved. "The fact is there are many people in every community who are concerned about their expansion. We're certainly not alone. We're part of a broader movement of people from lots of different walks of life and motivations."

Typically, California's anti-supercenter lawsuits are filed on behalf of a local community group that often doesn't disclose who belongs or where it gets its funding for the court challenge.

"Right now some of the people in this group want to remain anonymous," said Brad Morgan, a businessman in Selma who heads the anti-Wal-Mart group, Save Our Selma.

Herum, whose firm has handled cases involving 10 Wal-Mart supercenters, declined to say who pays for the suits and that he's never represented a union in 25 years of practicing law.

But "if my interests happen to align with the labor union so what?" Herum said, adding that supercenters have potential to "destroy the economic future of the Central Valley."

Wal-Mart, Herum said, is just attacking its opponents because it can't win in court.

Company spokesman Kanelos disagreed, saying the company respects California law and its legitimate use.

"Our concern is that there is no one watching the abuse of CEQA by interest groups whose interest in environmental protection is limited to their own political agenda," Kanelos said.

Copyright © 2005 ABC News Internet Ventures

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Wal-Mart Mops Up Immigrant Flap

March 18, 2005             [back to top]

Wal-Mart Stores Inc., the world's biggest retailer, has agreed to pay $11 million to settle federal allegations it used illegal immigrants to clean its stores, attorneys in the case said Friday.

The landmark settlement was expected to be announced by federal immigration officials at a news conference Friday morning.

Since 1998, federal authorities have uncovered the cases of at least 250 illegal immigrants who were employed by janitor contracting services and hired by the giant retailing chain in 21 states. Many of the janitors — from Mexico, Russia, Mongolia, Poland and a host of other nations — worked seven days or nights a week without overtime pay or injury compensation, said attorney James L. Linsey. Those who worked nights were often locked in the store until the morning, Linsey said.

"We're happy that Wal-Mart may finally be putting this shameful chapter to rest with the federal authorities and we expect them not to focus on the people who were shamefully exploited from around the world," said Linsey, who is representing the workers in a civil suit against the company that is still pending in New Jersey.

The $11 million settlement clears Wal-Mart of federal allegations of hiring the illegal immigrants. Federal officials refused immediate comment Friday morning, as did Wal-Mart officials.

Wal-Mart, which has 1.2 million domestic workers, had pledged its cooperation in the investigation. Wal-Mart is based in Bentonville, Ark.

On Oct. 23, federal agents raided 60 Wal-Mart stores across 21 states, netting the alleged illegal aliens working in the stores. Almost all the workers were in the employ of subcontractors paid to clean the stores. About 10 of the workers were employed by Wal-Mart.

Officials said at the time of the raids the investigation involved wiretaps that revealed Wal-Mart executives were aware that the subcontractors used illegal workers.

The U.S. Immigration and Customs Enforcement bureau said the workers came from 18 different nations, including 90 from Mexico, 35 from the Czech Republic, 22 from Mongolia and 20 from Brazil.

Once the raid began, Wal-Mart told its executives to preserve documents. Federal agents didn't wait and moved into part of the company's Bentonville headquarters, taking boxes from the office of a mid-level executive.

Wal-Mart had begun about a year before the October raids to move toward using its own workers to clean the floors. The company said it had used more than 100 third-party contractors to clean more than 700 stores nationwide.

An employer can face civil and criminal penalties for knowingly hiring illegal immigrants or failing to comply with certain employee record-keeping regulations.

Wal-Mart Stores had sales last year of $288.19 billion.

©MMV, The Associated Press. All Rights Reserved.

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"Quezalcoatl Must be Furious" Wal-Mart Invades Mexico

By JOHN ROSS                    [back to top]
TEOTIHUACAN, MEXICO.

Not many months ago, "polleros" (people smugglers) in Tapachula Chiapas on Mexico's southern border wheedled $5000 USD each from six Guatemalan and two what are described as "Hindu" undocumented workers who they promised to deposit safely in the United States.

Moving through Mexico stealthily in an old bus with its curtains drawn and slipping immigration officials the obligatory "mordida" ("little bite") to ease through the checkpoints, the smugglers arrived in Chihuahua City, 100 miles south of the U.S. border, drove out to an upscale suburb, and dropped their load off in front of an enormous Wal-Mart, informing the clueless clients they had arrived on "the Other Side."

Indeed, it looked like the American Dream--the Wal-Mart shared the gleaming mall with a Wendy's, a KTC, even an Appleby's and the ten-plex "Hollywood" Cinema. "It looked just like how it looked on televisio1n" a rueful "indocumentado" told Froilan Meza of the local Chihuahua Herald.

A full decade after that beacon of corporate globalization, the North American Free Trade Agreement, kicked in, the commercial physiognomy of Mexico is indistinguishable from that of its distant neighbor to the north. The marketplaces in these two deeply disequal trading partners are fast becoming mirror images of each other, "total convergence" as Mexican NAFTA negotiator Luis de Valle proudly boasted to the New York Times. "Mexicans and Americans now buy the same products and pay the same prices." Often they do so at the same mega-stores.

As 2005 ushers in NAFTA's second decade, 2000 plus MacDonald's now stain the Mexican landscape, and Wal-Mart, the world's most gargantuan conglomerate and the largest U.S. employer with 1.4 million "associates" (Wal-Mart has no workers) on its books, is also Mexico's biggest job generator (101,000), and far outsells its Mexican competition, with a 54% share of the market.

Having jumped the gun on NAFTA by buying into the 122 store Aurera-Bodega chain here in 1992 and taking it over five years later, Wal Mart now owns 687 super stores in 71 Mexican cities under the marquis logos of Wal-Mart, Aurera-Bodega, Superama, and Sam's Club --plus 52 Suburbias, a more upscale department store chain, and 235 VIP's restaurants. Total Wal-Mart sales of $10.8 billion USD in 2003 dwarfed the $8 billion taken in by the next three retailers together. But the transnational bonanza raises national hackles. "It is not good for our sovereignty that all our clothes and our food come from another country," asserts Vicente Yanez, director of the National Association of Self-Service Stores.

Just as in the U.S., Wal-Mart - which if it was a nation would be ranked the 19th economic power on earth with $256 billion USD in income last year - has grown so big that it now dominates the retail economy, accounting for 2% of gross internal product, about the same as in the U.S. Indeed, a Wal-Mart collapse could bring down both economies with a resounding crash.

As in the U.S., the bottom line is gospel in Mexico and no unions or other troublemakers are tolerated on the premises. Non-union Mexican Wal-Mart "associates" earn an average of 13 pesos an hour (about $1.20 USD) as compared to their non-union U.S. associates' $9.50 (unionized supermarket workers make $19.)

All is not copasetic in Wal-Mart land these days. 39 class actions in 30 U.S. states have been filed by disgruntled "associates", women employees, and undocumented immigrants often forced to work a 100 hours a week for below minimum pay.

Although Wal-Mart opened one store a day in 2003 (148 in the U.S., 178 in the rest of the world), resistance is growing on both sides of the border. According to gadfly Al Norman of Wal-Mart Watch, 16 mega-stores were nixed by U.S. target communities last year (220 in the past decade) and battles against the malling of Mexico have erupted all over the geography--in Cuernavaca, dozens were beaten and arrested trying to stop Costco, Wal-Mart's closest rival, from demolishing an historic green space where the British author Malcolm Lowery penned his monumental "Under the Volcano", and Wal-Marts slated for Merida Yucatan, Tecamachalco Puebla, and Amecameca in Mexico state (right under the still very active volcano of which Lowery wrote) have been stalled by activists. A threatened Wal-Mart on the shores of Michoacan's pristine Lake Patzcuaro has prompted community fury.

But the most conspicuous resistance has surged around the Arkansas-based retail empire's latest addition, an as-yet un-logoed monster store in San Juan Teotihuacan, 32 miles north of Mexico City under the soaring Pyramids of the Sun and the Moon in the sacred "City of the Gods", the first urban enclave in the New World.

Teotihuacan flourished for nearly a millennium between the 2nd Century BC and 700 AD, swelling to a half million souls by 500, and covering an expanse of eight square miles, larger even than Rome. Having harnessed underground streams, the rulers of Teotihuacan created Mexico's first corn culture, a harvest that inspired much commerce--a great marketplace shared the City with the Gods.

Quetzalcoatl, "the Plumed Serpent", a deity ubiquitous in ancient Meso-America, lorded it over Teotihuacan and his priests and devotees maintained the sun up in the sky and the agricultural seasons in balance by wholesale human sacrifice--18 upper crust sacrificial victims were uncovered in an unexplored chamber of the Pyramid of the Moon by a Japanese team this past November.

Teotihuacan is thought to have faded into history when, drained by drought, its carrying capacity collapsed, and barbarian Mexicas from the north (later designated Aztecs) repeatedly attacked the City of the Gods.

Today, once again, the carrying capacity of Mexico state in which Teotihuacan is situated - the most densely populated in the Mexican union - is threatened by mass migration from the impoverished south. 1200 newcomers settle in the state every day according to local charitable institutions. In fact, the population boom seems to be one reason why Wal-Mart has set up shop 2000 meters from the Pyramid of the Sun in the third archeological mitigation zone ("Periferico C") of San Juan Teotihuacan.

Each winter solstice, tens of thousands of revivalist Indians, New Age acolytes, and just plain tourists don cameras, feathered head-dresses or simple white cottons and tramp to the top of the Pyramid of the Sun to soak up the rays and revitalize their bodies and souls for the coming year.

As I climbed the 247 steep stone steps divided into four narrow tiers to the pyramid's summit, many of my fellow pilgrims expressed their umbrage at the new Wal-Mart, in plain site down below. "It is like an invasion, a new conquest," opined Rafael, a young computer technician from Cordoba, Veracruz. "Falta de respeto (a lack of respect)" a middle-aged woman missing her two front teeth spat, "this is Mexico, you know."

"I come up here every year to recharge my batteries" laughed Mexico City grade school teacher Xenia Marquez, extending her arms towards the weak December sun at the very apex of the Pyramid of the Sol--in her hand she cupped three shiny metal pyramids to increase the solar jolt. Asked about the Wal-Mart down below, the maestra recoiled: "What a horror! They insult the Gods! Quezalcoatl must be furious!"--her tirade was interrupted by the tingaling of her cell phone.

Two tiers down, Miguel Angel Nieves, a young custodian whose father worked rebuilding the Pyramid of the Moon in the 1960s and who grew up under the ruins, had a distinctly different story. Proudly pointing out the Wal-Mart in the hazy distance, he exalted the prices and the products therein. "Before Wal-Mart opened, we would shop in the street or in the central market which is owned by one man. The prices were high and well, it wasn't very clean"

The saga of the resistance to the Teotihuacan Wal-Mart is a picaresque footnote in the battle against the global leviathan. Whereas in the U.S., such disputes are apt to be settled before permit appeals and zoning boards, the Teotihuacan Wal-Mart touched a raw national nerve and so this war was fought "a la Mexicana." "Wal-Mart has profaned the City of the Gods and there are no deities in Meso-America that can protect it now" darkly warned Miguel Limon-Portillo, the celebrated translator of Aztec poetry.

The Civic Front to Defend the Teotihuacan Valley ("Frente Civica") first got wind of Wal-Mart's plans very late in the game after concrete trucks started pouring a foundation in the third archeological zone less than two kilometers from the pyramids. Activists immediately suspected a deal had been cut between the conglomerate, the municipal government, and the National Institute of Anthropology and History (INAH) without whose permission the project could not go forward.

On October 1st, Lorenzo Trujillo, a middle-aged teacher, the self-styled "spiritual guide" Emma Ortega, and Emmanuel D'Herrera, a poet and professor, set up camp at the Wal Mart site, rolled out their "petates" (straw mats), lit copal incense to the guardian figure of Coatlicue, a sort of Aztec Shiva, and, in classic lost-cause Mexican struggle posture, declared themselves on hunger strike. Not unsurprisingly, their sacrifice had deep scratch in a nation that bridles at dubious NAFTA encroachments and has been galvanized by the plight of its Indian cultures after ten years of Zapatista rebellion.

Mexico state governor Arturo Montiel, a dark horse presidential hopeful of the Institutional Revolutionary Party, which ran Mexico for seven decades and would like nothing better then to take back power in 2006, was a big booster of the new Wal-Mart store, boasting that it would bring 3000 new jobs to this run-down region. But local street sellers and market venders, who have created their own open air Wal-Mart in and around the ruins, figured that their livelihoods were jeopardized by super-store competition and joined the fray. Street fights between those who opposed the project and those who did not want to bus 20 miles away to other towns to do their shopping ensued. When the Frente Civica camp was attacked by angry construction workers, the three hunger strikers moved to the ruins. A second strike began on the sidewalk outside the INAH's Mexico City offices.

By now, lots of fingers were being pointed at the INAH for having declared the Wal-Mart site of "no archeological value." One fired construction worker, Martin Hernandez, told the national left daily La Jornada that he had seen broken pieces of pottery and other items being hauled from the construction site and was ordered to keep quiet about the destruction.

Soon Rigoberta Menchu and Subcomandante Marcos were commenting on the desecration. The Teotihuacan Wal-Mart was a ready-made flashpoint for indigenous organizations such as the National Association for Indigenous Autonomy (ANIPA), which pointedly asked if the Catholic Church would allow a mega-store to be thrown up at the door to the Vatican? Aztec concheros dancers arrived from Mexico City to excite energies.

Francisco Toledo, Mexico's most luminescent painter, who had single-handedly kept a MacDonald's out of Oaxaca city's colonial plaza, like Teotihuacan a UNESCO World Heritage Site, drew pictures of monkeys pushing shopping carts beneath the pyramids of "Teotihualmart" as social critic Carlos Monsivais tagged it. Union leaders came to express their support of the hungry strikers and to remind the press of Wal-Mart's anti-union bias. Anarcho-punks, anthropologists, and comedians expressed their outrage--cabaret star Jesusa Rodriguez told of the "Hualmartas, a tribe from the north", the discovery of whose "Hualmart Codex" revealed that "they worshipped the Yanqui dollar." The Teotihuacan Wal-Mart even made U.S. late night TV when Comedy Central's Jon Stewart included it in his nightly fake news broadcast.

As the international uproar mounted, Wal-Mart worked around the clock to get the new store up and running before matters got completely out of hand. And as the deadline approached, tempers flared. In late October, militant farmers from nearby San Salvador Atenco who had fought off a proposed international airport with their machetes three years previous, clashed with police just outside the ruins--a police car and three motorcycles were torched.

When on Wal-Mart was finally ready to throw open its doors a week later, there were 70 customers on line before nine, many drummed out by a sound truck that had been circulating through the small city for days advertising free gifts and big bargains. But just before opening time, a team of INAH workers appeared on the scene and demanded entrance in order to drill for last-minute samples. A pair of two meter-deep holes were perforated between cash registers six and seven as store stockers stopped to gawk. The samples yielded only sand and fragments of 20th century brick and Wal-Mart received the INAH's blessings to open for business.

But the perforations had left a gaping chasm in the mega-store's floor and Wal-Mart public relations officer Claudia Algorri decided the inauguration would be postponed until after the long "Dia de los Muertos" (November 1st-2nd) weekend, Mexico's intensely traditional celebration of its dead.

Over the weekend, the Frente Civica built altars to their ancestors and prayed that the Gods of Teotihuacan were tuned in.

When customers once again flocked to the mega-store on Tuesday morning, 250 riot cops were on hand to greet them. The first scuffling occurred after the mob tried to take the doors and Wal-Mart officials had to calm the public with free Cokes, French fries, and "little cakes" (La Jornada.) Then the link to the satellite, which would connect up the Teotihuacan cash registers with Wal-Mart headquarters in Bentonville Arkansas, went kaplooy--the Gods must have been listening. For six hours, the crowd hung around the parking lot under the blazing sun. A family quarrel broke out and noses were bloodied. Finally, near 3:30. customers were allowed to grab a shopping cart and the consumer frenzy was consummated. But sales were not brisk--most had come just to gander at the marvels of modern merchandising contained within this temple of plastic.

And that night, a band of toughs thought to have been recruited by the INAH dismantled the Frente Civica encampment by the ruins. D'Herrera, then in the fourth week of his hunger strike, was rousted from his petate and three students slashed by a razor-toting thug. The Teotihuacan Wal-Mart was officially in business.

Christmas is a season of cultural confrontation in Mexico where gift-giving, as in much of the Hispanic Catholic world, is symbolic and confined to Epiphany on January 6th, the day the Three Kings visit the Christ child. But Santa Claus is the superhero of the global marketers and so like the Days of the Dead vs. Halloween and the Crucifixion vs. the Easter Bunny, Xmas breeds culture shock.

By December, the Teotihuacan Wal-Mart was doing boom time business. Although "Nueva Wal-Mart" (the corporation's Mexican handle) has posted no outside store sign to avoid controversy, the interior is unmistakably a prototypical Sam Walton-style emporium stocked to the roof beams with mostly Chinese-made items (Wal-Mart imports 10% of all goods China exports to the U.S.)

Given the season, the toy aisles were particularly packed with parents shopping for either Christmas or The Kings--of six customers questioned, opinions were split down the middle as to which day they would celebrate.

Nonetheless, all six fervently concurred that Wal-Mart prices were the lowest (and only ones) in town. Princess Barbi was on sale for 288 pesos (about $20), He-Man action figures for 162. But a giant yellow Hummer weighed in close to 4000 pesos. A miniature Wal-Mart mega-store marked down to 988 pesos was drawing oos and ahhs. Elsewhere in the aisles, Black & Decker irons were going like hot cakes at 97 pesos and U.S. grown tomatoes and apples were holding their own against local produce.

Out in the parking lot, Victor Acevedo, a local anthropologist who affects hand-made Indian accessories, was sheepishly ladling merchandise into his battered Volkswagen bug. "I don't like the idea of Wal-Mart being so close to the pyramids--but where else am I going to shop?" he told a U.S. reporter.

Sincreticism unlocks the door to much of the Mexican mystery. When the Europeans came, they pulled down the Aztec temples--Teotihuacan is a fortuitous exception--and built their cathedrals from the rubble. The Teotihuacan Wal-Mart, albeit transiently imposed, sits atop land once occupied by an Aztec "tianguis" or bazaar. In Mexico, you always need to look underneath.

Mexico is a four millennium-old civilization with a culture as obdurate as granite and obsidian. In contrast, the United States is a make-believe country with a bubble-wrapped culture and a minimal national history. The smart money says that when all the Wal-Marts crumble into dust, the majestic Pyramids of Teotihuacan will still be standing.

John Ross has just been awarded the 2005 Upton Sinclair Award (an "Uppie") by the San Pedro California chapter of the American Civil Liberties Union for his latest cult classic "Murdered By Capitalism--A Memoir of 150 Years of Life & Death on the U.S. Left". "The Wal-Martization of Mexico" appeared in a truncated form in the March issue of The Progressive.

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Vermont Lawmakers Weigh Statewide Big-Box Law

Mar. 16, 2005           [back to top]

If a new ordinance limiting big-box retail development in the town of Bennington, Vermont, is endorsed by voters in an April referendum, two lawmakers say they will introduce bills to extend those restrictions statewide.

read the rest at Hometown Advantage

Update 1: Labor Board Orders Wal-Mart Hearing

Associated Press                [back to top]
03.16.2005, 08:49 PM

The National Labor Relations Board on Wednesday ordered a hearing into complaints that Wal-Mart Stores Inc. intimidated and bullied workers at a Colorado store into voting against union representation last month.

After workers at the Wal-Mart Tire & Lube Express in Loveland rejected unionization 17-1 in a vote Feb. 25, a spokesman for United Food and Commercial Workers Local 7 said the union would ask the NLRB to dismiss the results. Local 7 spokesman Dave Minshall had said no union member was allowed to observe the election and that Wal-Mart added employees to the unit to dilute the strength of the union supporters.

"The claims made by the UFCW are simply not true, and we are confident that the (NLRB) regional office will find no evidence of these allegations," said Christi Davis Gallagher, a spokeswoman for Bentonille, Ark.-based Wal-Mart.

A hearing was scheduled for March 25 at the NLRB office in Denver.

"After a preliminary investigation I have concluded that the (union's) objections raise substantial and material issues of fact, including credibility resolutions, which can best be resolved at a hearing," NLRB regional director Allan Benson said.

Organizers of the unionization vote had hoped to establish what would have been the second union at a Wal-Mart store. Workers in Canada also are fighting the world's largest retailer to form a union.

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Update 1: Wal-Mart Faces Criticism on Ethics Code

03.16.2005, 12:59 PM                   [back to top]

Labor representatives at Wal-Mart Stores Inc.'s German arm claim the company is implementing an ethics code without consulting them, a union spokeswoman said Wednesday.

Wal-Mart's Wuppertal-based German operation denied the allegations, saying the worker-management councils had been informed that what it called "ethical guidelines" were to be distributed.

"The worker-management councils were informed in advance that the company's ethics code was being sent out," the world's largest retailer said in a statement released Wednesday.

Members of worker-management councils from several of Wal-Mart's 91 German stores have approached the ver.di service workers' union, saying they were not allowed to vote on the code before it was handed out.

Under German employment laws, employee-management councils must sign off on a wide range of workplace conditions, from hiring and firing to the position of desks in an office.

A spokeswoman for ver.di, which represents most of Wal-Mart's 13,000 employees in Germany, said council representatives were particularly angered at wording that she said was directly translated from the English, without regard for local norms and customs, and were contemplating a lawsuit.

"We would ask that those demanding ethical behavior would display such behavior themselves, which Wal-Mart doesn't, as this has shown," said Matina Suennicasen, a spokeswoman for ver.di.

She declined to comment on the guidelines. Media reports published excerpts prohibiting workers from having intimate relationships with colleagues who could affect their compensation or accepting gifts from wholesalers. The code also encourages workers to inform superiors of colleagues caught breaking the rules, according to the reports.

Wal-Mart insisted the guidelines are intended to maintain a safe workplace environment.

"The company's ethics code is used by Wal-Mart around the world and describes ethical ground rules for personal conduct that normally takes place in healthy and honest human understanding," Wal-Mart said.

Wal-Mart shares rose 20 cents, or 0.4 percent, to $51.08 in midday trading on the New York Stock Exchange, at the low end of their 52-week range of $51.01 to $60.45.

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Wal-Mart -- Not Exactly a Juggernaut in Europe:

David Pauly           [back to top]
March 15
Bloomberg

Small-town hardware stores, union organizers and Kmart managers can take heart: They may not be bulldozed by Wal-Mart Stores Inc. after all.

Wal-Mart, the master of computerized inventories and the king of cost-cutters, can wipe out the competition -- in the U.S. The Bentonville, Arkansas, discounter's juggernaut act hasn't always worked so well abroad, notably in the U.K., where it's outdistanced by Tesco Plc, and in Germany, where analysts say it's in the red.

Since moving into the U.K. in 1999 with the acquisition of the Asda Group Plc supermarket chain, Wal-Mart has lifted Asda from No. 3 to No. 2 among Britain's food retailers but remains well behind leader Tesco Plc.

In the 12 weeks ended Feb. 27, Asda's share of the $202 billion U.K. grocery market inched up to 16.9 percent from 16.7 percent in the same year-before period, according to research group Taylor Nelson Sofres Plc, as Tesco increased its share to 29.2 percent from 27 percent.

Tesco has outflanked Wal-Mart's stores by selling more expensive food items and being quicker to sell personal financial products like car insurance. Asda's Chief Executive Tony DeNunzio quit last week to take a job running Dutch electronics and clothing retailer Royal Vendex KBB NV.

Costco's Coming

Wal-Mart's backsliding in the U.K. is especially embarrassing because U.S. rival Costco Wholesale Corp. has been expanding rapidly from a smaller base.

While Costco, from Issaquah, Washington, may have benefited from a quirk in zoning rules that makes it easier for a wholesaler to get new stores approved than a retailer, it recently beat Wal-Mart prices on such things as cat food and gin -- and it sells in bulk and peddles big items like wide-screen TVs.

America's discount giant has fared even worse in Germany, where analysts say the U.S. retailer has lost money ever since buying Germany's Wertkauf chain in 1997. Wal-Mart doesn't break out results by country, lumping the U.K. and Germany with Canada, Brazil, Mexico, China and others under ``international.''

While Wal-Mart blames a weak economy for continued poor results in Germany, analysts say the company failed to adapt its 91 stores to German tastes. Wal-Mart also has resisted sharing its financial results with German officials, according the Financial Times Deutschland.

Good News

Overall, Wal-Mart is still a success abroad. In the year ended Jan. 31, its international sales climbed 18 percent to $56.3 billion, helped by the strength of the British pound and the Canadian dollar against the U.S. dollar.

The discounter's majority-owned Mexican unit, which is Latin America's biggest retailer, earned about $860 million last year. With $1.06 billion in cash, Wal-Mart de Mexico SA de CV was expanding and buying back stock. Wal-Mart this year promoted Mexico CEO Eduardo Castro-Wright to chief operating officer of its U.S. stores.

Wal-Mart's missteps in Europe do show that big companies don't always get their way. Remember too that Wal-Mart is exhibiting some weaknesses at home. Its 3.3 percent sales gain in stores open 12 months or more in the past year trailed the 5.3 percent increase by No. 2 discounter Target Corp., which often offers trendier merchandise. Wal-Mart shares, which closed yesterday at $51.30, have basically treaded water for the past five years.

A few more slips by Wal-Mart and retailing's smaller fry may have a future.

To contact the writer of this column: David Pauly in Ft. Myers, Florida dpauly@bloomberg.net

To contact the editor responsible for this column: Bill Ahearn at bahearn@bahearn.net.

Last Updated: March 15, 2005 00:26 EST

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Wal-Mart Ethics Code Angers Germans

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Ethic codes do not translate well

The German subsidiary of the world's largest retailer, Wal-Mart, has again infuriated employees, this time over policies that workers believe interfere with their private lives and force them to spy on colleagues.

Often mistrusted for its American corporate culture, the German subsidiary of Wal-Mart has once again stuck its foot in it. Employees of the 92-store discount chain received a moral lecture along with their February paychecks: a code of ethics employees must follow or face termination, the Financial Times Deutschland reported Tuesday.

The code forbids Wal-Mart employees from accepting presents from suppliers, dictates that employees may not fall in love with a colleague in a position of influence and requires workers to report colleagues immediately "if they observe that they have broken the rules." Non-compliance of the rules can lead to termination.

Translation problems

The German management of the company said they adopted the code after increasing requests by their American counterparts to do so. Still, representatives of employees say they will fight the code through the courts. The company declined comment.

Employee's rights expert Manfred Confurius told the Financial Times Deutschland that US employees face more concrete and stronger restrictions, something that doesn't always transfer well to German work culture.

"Such ethic codes should, in general, be voluntary," he said.

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Federal Appeals Court rules Wal-Mart broke labor laws

By Bloomberg News          [back to top]
March 15, 2005

Wal-Mart Stores Inc. violated US labor law when it disciplined an employee for wearing a union T-shirt in the store where he worked and telling co-workers about a union meeting, a Federal appeals court ruled.

''Wal-Mart failed to demonstrate how the T-shirt interfered in any manner with the operation of the store," the court said yester-day.

The court upheld most of a decision by the National Labor Relations Board that the employee didn't violate a policy at Wal-Mart, the world's largest retailer, that bars workers from soliciting inside the company's stores.

The Appeals Court, based in St. Louis, ruled in Wal-Mart's favor on one issue, saying the company could sanction employee Brian Shieldnight, who worked in a Wal-Mart store in Tahlequah, Okla., for asking another employee to sign a union authorization card.

© Copyright 2005 The New York Times Company

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Sam Walton reaches out from the grave to help unionize wal-mart workers

Sam Walton encourages Wal-Mart workers to join the Union

by Louie Maytorena, Webmaster, WalMartSux.com             [back to top]
24-7PressRelease.com
March 15, 2005

Waipahu, Hawaii- The late Retail Supermogul, Sam Walton has been dead for 13 years, but, that isn't stopping him from making a comeback as a union organizer. A new website has Sam Walton reminding all those overworked and badly treated associates to "regain their self-respect" and don't take what's being dished out to them by the Walton family and CEO, Lee Scott.

WalMartSux.com (SUX: an acronym for Supplemental Union eXchange) created by ex-sales associate, Louie Maytorena, puts out a call for action to all employees to STOP listening to the billionaire heirs and focus instead on Sam's words of practicing "true respect for the individual".

Louie tells us that "Too many associates are their worst enemy. Constantly listening to their own fears." I say, "Stop cowering as a result of your happy-face-everything-is-OK-brain-washing and, with Sam's help, make history by being the first store in the United States of America to become nionized."

It didn't take very long after Sam's earthly departure that the remaining family members started taking the Wal*Mart Store empire down a very dark path. "They have taken Sam's good intentions and completely corupt everything he stood for and admired, particularly the integrity and hard work of his beloved associates and replaced by the lure of the Mighty Dollar".

"Everyday going to work, seemed like dreamland. Nothing ever made any sense." Louie adds, "I myself was fired from Wal*Mart for wanting to use the restroom on my lunchbreak." Louie explains with a curious expression on his face. "Maybe it had something to do with my open worker's comp case due to my permanent injury to both my back and knee sustained by pushing pallet loads in excess of 2300 lbs. for many years in the Food department despite my protest and suggestion in obtaining a powered pallet-jack to push these heavy loads". Wal*Mart's loud response, "Absolutely...NOT!, these jacks cause injury and are a liability"! Duh...Ya Think? So they made me a "greeter" instead. A position created, in my opinion, as a one-way ticket out the door.

Even though Louie is no longer employed by the retail giant, this doesn't stop him from helping those still on the inside. "Do it for Sam..." the website proclaims, "...and call the UCFW Ohana today.

Louie believes that Mr. Walton would be proud to lead a new Wal*Mart cheer for the next century. One that would begin with, "Give me an R-E-S-P-E-C-T - WHAT DOES IT SPELL?".

About louie maytorena grafix Wal-Mart Supplemental Union Exchange

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Like the US, Mexico feels Wal-Mart era

Hundreds of stores in Mexico are busily upscaling in efforts to compete with the world's retail champ.

By Ken Bensinger               [back to top]

Canned white asparagus. Spanish serrano ham. Sushi rice. It's the fancy imports, says Claudia Gonzalez, that bring her to Comercial Mexicana, the nation's No. 3 retailer.

But this day, she also picked up an industrial-sized bag of diapers.

"The diapers are probably cheaper at Wal-Mart, but you can't get any of this other stuff there," says Ms. Gonzalez, unloading an overflowing cart in the parking lot of one of Wal-Mart's top competitors in Mexico. Then her voice drops. "The people at Wal-Mart just aren't like me," she whispers.

Ms. Gonzalez spends $100 a week on groceries, four times what a minimum-wage worker earns in that time. And while not exactly politically correct, her attitude could be the key to survival for Comercial and a half-dozen "big box" chains that are urgently testing new strategies after nearly a decade of trying to keep up with Wal-Mart.

Having learned that they can't go mano-a-mano with the world's retail champ, hundreds of stores here are busily upscaling - adding cozy cafes and stocking fine cheeses, gourmet dog food, and seasonal specialty items - an alternative strategy based on hard-won experience. "Nobody can beat Walmex. It is and will continue to be the dominant competitor here," says Joaquin Ley, an analyst at Santander Investments. "Instead, everyone else is racing to differentiate themselves."

Indeed, since a consolidation in 1997, Wal-Mart de Mexico SA, or Walmex, the Mexican extension of its Arkansas-based parent, has steadily gobbled up everything in its path, posting soaring numbers - sales increased 10.5 percent last year - and pouring piles of cash into growth with trademark intensity. Today, Walmex runs 411 retailers and 285 restaurants, is Mexico's largest private employer, and has the second-highest market capitalization of any company on Mexico's stock exchange.

Its most recent victim is Carrefour, the world's No. 2 retailer after Wal-Mart. The French company announced late last Thursday that it would sell all its 29 Mexican stores, plus two under construction, to Chedraui, the country's sixth-largest chain, for a rumored $545 million. The retreat comes only two years after Auchan, the world's 23rd-largest retailer, also gave up on Mexico.

Eager to avoid such a fate, Soriana, Mexico's second-largest chain, says it will invest more than $300 million this year, and will fill its stores with what director of strategic planning Pedro Mejia calls "perks and improvements." It also plans an enormous emphasis on customer service. "Until 2003, we only had one format: trying to get all clients," he says. "Now our new stores are oriented to a higher socioeconomic level."

On top of working to maintain a somewhat fancier atmosphere, with more expensive stores in wealthier neighborhoods, both Soriana and Comercial Mexicana have begun developing their own lines of higher-end products, a strategy analysts say was inspired by US chains like Target.

It's a bold move, especially in a country where 70 percent of the population lives below the poverty line. But it could simply be a pragmatic approach to a marketplace where many people are already convinced that Wal-Mart's famous "Everyday Low Prices" are unbeatable.

"I shop at Wal-Mart because it's cheaper. Across the board, everything costs less here," says Maria Eugenia Zubiria, holding aloft a box of Special K cereal that actually costs nearly 5 pesos less at the Comercial Mexicana three blocks away. The perception that Wal-Mart is unbeatable on price is the store's best ally here. But in reality, thanks to a year-old buying alliance between Comercial Mexicana, Soriana, and the chain Gigante, prices for common groceries are essentially identical at Wal-Mart's competitors.

In contrast to chains like Soriana, there are other retailers who don't yet want to give up on the Mexican masses. Among them is Gigante, Mexico's fourth-largest big-box chain, which has most closely mirrored Walmex's strategy, peppering the airwaves with commercials touting falling prices.

Like Walmex, the majority of Gigante's stores are in the dense central areas of Mexico, particularly Mexico City. Also like Walmex, which also runs Sam's Club and the chain Bodega Aurrera, Gigante has tried to appeal to blue-collar consumers.

On top of 127 flagship Gigante stores, it has 34 Super G and 28 Bodega Gigante big boxes, which look and feel nearly identical to Bodega Aurrera, with its smaller selection and emphasis on food staples.

Despite the stiff competition from Walmex, Gigante says it will invest $90 million this year, while others, like Soriana and Chedraui, will break into the key Mexico City market this year.

It's a bold move in a country where millions of shoppers are like Virginia Soto, a retiree who never sets foot in a big-box store. "I'm just not used to them," says Ms. Soto, who buys all her food in a weekly street market near her house. "I'm not about to go anywhere else."

Yet Soto is the type of person that the chains are increasingly targeting. The big retailers point out that fully one half of the retail market belongs to "irregular" commerce like public street markets. And in this Coca Cola-crazy country, only 30 percent of soft-drink sales are in big box stores, according to Mr. Ley.

"There's a lot of room for growth, because this society is changing," says Carlos Ruiz, professor at the Pan-American Institute of Business Administration. "We're seeing a change in ages and in habits of consumption. More and more, Mexico is going to become oriented to [big box] stores."

And many are destined to be Wal-Marts. Walmex captured about a quarter of the retail market last year. This year it will invest $750 million, more than all its competitors combined, opening 70 new stores, according to Walmex spokesman Raul Arguelles. "Expect many, many more square meters of Wal-Mart sales floor in Mexico in the future," he says.

www.csmonitor.com | Copyright © 2005 The Christian Science Monitor. All rights reserved.

Copyright © 2005 ABC News Internet Ventures

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Wal-Mart 念191;½ la Mexicana

By John Ross                     [back to top]
The Progressive Posted
March 14, 2005

Each winter solstice, tens of thousands of revivalist Indians, New Age acolytes, and just plain tourists don cameras, feathered head dresses, or simple white cottons and tramp to the top of the Pyramid of the Sun in San Juan Teotihuacan to soak up the rays and revitalize their bodies and souls for the coming year.

Teotihuacan flourished for nearly a millennium between the second century BC and 700 AD. In the year 500, half a million people lived in the city, which covered an expanse of eight square miles, larger even than Rome. Having harnessed underground streams, the rulers of Teotihuacan created Mexico's first corn culture. Queztalcoatl, the plumed serpent, a deity ubiquitous in ancient Mesoamerica, ruled over Teotihuacan, and his priests maintained the balance of the agricultural seasons and upheld the sun in the sky through human sacrifice.

As I climbed the 247 steep stone steps divided into four narrow tiers to the pyramid's summit, many of my fellow pilgrims expressed their umbrage at the new Wal-Mart, in plain sight down below, just 2,000 meters away.

"It is like an invasion, a new conquest," opined Rafael, a young computer technician from Cordoba, Veracruz.

"Falta de respeto" (a lack of respect), a middle-aged woman missing her two front teeth spat. "This is Mexico, you know."

"What a horror! They insult the Gods! Quezalcoatl must be furious!" said Mexico City grade school teacher Xenia Marquez, extending her arms towards the weak December sun at the very apex of the Pyramid of the Sun. Her tirade was interrupted by the tingling of her cell phone.

The saga of the resistance to the Teotihuacan Wal-Mart is a picaresque footnote in the battle against the global leviathan. "Wal-Mart has profaned the City of the Gods, and there are no deities in Mesoamerica that can protect it," darkly warned Miguel Limon-Portillo, the celebrated translator of Aztec poetry. Whereas in the U.S., such disputes are apt to be settled before permit appeals and zoning boards, the Teotihuacan Wal-Mart touched a raw national nerve, and so this war was fought 念191;½ la Mexicana.

Having jumped the gun on NAFTA by buying into the 122-store Bodega Aurrer念191;½ chain here in 1992 and taking it over five years later, Wal-Mart now owns 687 superstores in 71 Mexican cities under the marquee logos of Wal-Mart, Bodega Aurrer念191;½, Superama, and Sam's Club – plus 52 Suburbias (a more upscale department store chain) and 235 Vips restaurants. Total Wal-Mart sales of $10.8 billion in 2003 dwarfed the $8 billion taken in by the next three retailers together. And Wal-Mart, the largest U.S. employer, is also Mexico's biggest job generator, accounting for 101,000.

As in the U.S., the bottom line is gospel for Wal-Mart in Mexico, and no unions or other troublemakers are tolerated on the premises. Non-union Mexican Wal-Mart "associates" earn an average of 13 pesos an hour (about $1.20) as compared to $9 for their non-union U.S. counterparts.

"It is not good for our sovereignty that all our clothes and our food come from another country," asserts Vicente Yanez, director of the National Association of Self-Service Stores. (More than 2,000 McDonald's also stain the Mexican landscape.)

A full decade after NAFTA kicked in, the commercial physiognomy of Mexico is often indistinguishable from that of its neighbor to the north.

Not many months ago, polleros (people smugglers) in Tapachula, Chiapas, on Mexico's southern border, wheedled $5,000 each from six Guatemalans and two other undocumented workers whom they promised to deposit safely in the United States.

Moving through Mexico stealthily in an old bus with its curtains drawn and slipping immigration officials the obligatory mordida (little bite, or bribe) to ease through the checkpoints, the smugglers arrived in Chihuahua City, 100 miles south of the U.S. border, drove out to an upscale suburb, and dropped their load off in front of an enormous Wal-Mart, informing the clueless clients they had arrived on "the Other Side." The Wal-Mart shared the gleaming mall with a Wendy's, a KFC, even an Applebee's, and the ten-plex "Hollywood" Cinema.

"It looked just like how it looked on television" a rueful indocumentado told Froilan Meza of the local Chihuahua Herald.

The Civic Front to Defend the Teotihuacan Valley (Frente Civica) first got wind of Wal-Mart's plans very late in the game after concrete trucks started pouring a foundation less than two kilometers from the pyramids. Activists immediately suspected a deal had been cut between the conglomerate, the municipal government, and the National Institute of Anthropology and History (INAH), without whose permission the project could not go forward.

On Oct. 1, 2004, Lorenzo Trujillo, a middle-aged teacher, the self-styled "spiritual guide" Emma Ortega, and Emmanuel D'Herrera, a poet and professor, set up camp at the Wal-Mart site, rolled out their petates (straw mats), lit copal incense to the guardian figure of Coatlicue, a sort of Aztec Shiva, and, in classic lost-cause Mexican struggle posture, declared themselves on hunger strike. Their sacrifice made an impact in a nation that bridles at dubious NAFTA encroachments and has been galvanized by the plight of its Indian cultures after ten years of Zapatista rebellion.

Mexico State Governor Arturo Montiel, a dark horse presidential hopeful of the Institutional Revolutionary Party, which ran Mexico for seven decades and would like nothing better than to take back power in 2006, was a big booster of the new Wal-Mart store. He boasted it would bring 3,000 new jobs to this run-down region. But local street sellers and market vendors figured their livelihoods were jeopardized by super-store competition and joined the fray. Street fights ensued between those who opposed the project and those who did not want to bus 20 miles away to other towns to do their shopping. When the Frente Civica camp was attacked by angry construction workers, the three hunger strikers moved to the ruins. A second strike began on the sidewalk outside the INAH's Mexico City offices.

By now, lots of fingers were being pointed at the INAH for having declared the Wal-Mart site of "no archeological value." One fired construction worker, Martin Hernandez, told the national left daily La Jornada that he had seen broken pieces of pottery and other items being hauled from the construction site and was ordered to keep quiet about the destruction.

Soon Rigoberta Mench念191;½ and Subcomandante Marcos were commenting on the desecration. The Teotihuacan Wal-Mart was a ready-made flashpoint for indigenous organizations such as the National Association for Indigenous Autonomy, which pointedly asked if the Catholic Church would allow a megastore to be thrown up at the door to the Vatican.

Francisco Toledo, Mexico's most luminous painter, who had single-handedly kept a McDonald's out of Oaxaca city's colonial plaza (which like Teotihuacan is a UNESCO World Heritage Site), drew pictures of monkeys pushing shopping carts beneath the pyramids of "Teotihualmart," as social critic Carlos Monsivais tagged it. Union leaders came to express their support of the hunger strikers and to remind the press of Wal-Mart's anti-union bias. Anarcho-punks, anthropologists, and comedians expressed their outrage, and cabaret star Jesusa Rodriguez told of the "Hualmartas, a tribe from the north."

As the uproar mounted, Wal-Mart worked around the clock to get the new store up and running before October was out. And as the deadline approached, tempers flared. On Oct. 24, militant farmers from nearby San Salvador Atenco, who had fought off a proposed international airport with their machetes three years previous, clashed with police just outside the ruins. A police car and three motorcycles were torched.

When on Oct. 30 Wal-Mart was finally ready to throw open its doors, there were 70 customers in line before 9 a.m. A sound truck had been circulating through the small city for days advertising free gifts and big bargains. But just before opening time, a team of INAH workers appeared on the scene and demanded entrance in order to drill for last-minute samples. Two meter-deep holes were perforated between cash registers six and seven as store stockers stopped to gawk. The samples yielded only sand and fragments of 20th century brick, and Wal-Mart received the INAH's blessings to open for business.

But the perforations had left a gaping chasm in the megastore's floor, and Wal-Mart public relations officer Claudia Algorri decided the inauguration would be postponed until after the long Dia de los Muertos weekend, Mexico's traditional celebration of its dead.

Over the weekend, the Frente Civica built altars to their ancestors and prayed that the gods of Teotihuacan were tuned in.

When customers once again flocked to the megastore the following Tuesday morning, 250 riot cops were on hand to greet them. The first scuffling occurred after the mob tried to take the doors, and Wal-Mart officials had to calm the public with free Cokes, French fries, and "little cakes," according to La Jornada. Then the link to the satellite, which would connect the Teotihuacan cash registers with Wal-Mart headquarters in Bentonville, Ark., went down – the gods must have been listening. For six hours, the crowd hung around the parking lot under the blazing sun. A family quarrel broke out and noses were bloodied, the Jornada reporter noted. Finally, at about 3:30 p.m., customers were allowed to grab a shopping cart, and the consumer frenzy was consummated. But sales were not brisk. Many people had come just to gander at the marvels of modern merchandising contained within this temple of plastic.

That night, a band of toughs dismantled the Frente Civica encampment by the ruins. D'Herrera, then in the fourth week of his hunger strike, was rousted from his petate, and three students were slashed by a razor-toting thug. The Teotihuacan Wal-Mart was officially in business.

By December, the Teotihuacan Wal-Mart was booming. Although "Nueva Wal-Mart" (the corporation's Mexican handle) has posted no outside store sign to avoid controversy, the interior is unmistakably a prototypical Sam Walton-style emporium stocked to the roof beams with mostly Chinese-made items.

Given the season, the toy aisles were packed with parents shopping. Of six customers questioned, all fervently concurred that Wal-Mart prices were the lowest in town. Princess Barbie was on sale for 288 pesos (about $20), He-Man action figures for 162. But a giant yellow Hummer toy weighed in close to 4,000 pesos. A miniature Wal-Mart megastore marked down to 988 pesos was drawing oohs and ahs. Elsewhere in the aisles, Black & Decker irons were going quickly at 97 pesos, and U.S. grown tomatoes and apples were holding their own against local produce.

Miguel Angel Nieves, a young custodian whose father worked rebuilding the Pyramid of the Moon in the 1960s, exalted the prices and the products. "Before Wal-Mart opened, we would shop in the street or in the central market, which is owned by one man," he said. "The prices were high – and, well, it wasn't very clean."

Out in the parking lot, Victor Acevedo, a local anthropologist who affects handmade Indian accessories, was sheepishly loading merchandise into his battered Volkswagen bug. "I don't like the idea of Wal-Mart being so close to the pyramids," he said, "but where else am I going to shop?"

Mexico is a four-millennium-old civilization with a culture as obdurate as granite and obsidian. When the Europeans came, they pulled down most of the Aztec temples. But the majestic pyramids of Teotihuacan remained. And so they will remain long after all the Wal-Marts in Mexico crumble into dust.

© 2005 Independent Media Institute. All rights reserved. View this story online at: http://www.alternet.org/story/21398/

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Wal-Mart Union Organizer Fasts to Protest Firing

by Madeleine Baran      [back to top]

Mar 14 - A Wal-Mart worker who said the company fired him Tuesday for trying to start a union, is now on a hunger strike. Ryszard Tomtas, a Polish immigrant, was fired from a Loveland, Colorado Wal-Mart Distribution Center.

Tomtas, 46, told ABC News that he was fired because he signed a union card and the union told Wal-Mart Tomtas would begin organizing the store. Wal-Mart denied these allegations, and said they fired Tomtas because of "horseplay."

Tomtas, who was involved in Poland's Solidarity movement to overthrow a Soviet-style dictatorship in the 1980s, chained himself to a stop sign in front of Wal-Mart on Thursday. Police asked him to leave to avoid arrest, but said he could continue protesting in front of the building provided he does not block traffic.

Tomtas told ABC News he will drink only water during his hunger strike, and that he is in the process of filing a wrongful termination complaint with the US Equal Employment Opportunity Commission.

An attorney for United Food and Commercial Workers Local 7 told ABC News that the union plans to file charges.

© 2005 The NewStandard. See our reprint policy.

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Wal-Mart uses new tactic to get around Maryland county law limiting size

[back to top]

BENTONVILLE, Ark. (AP) - Wal-Mart, the world's largest retailer, is employing a new tactic to get around a Maryland town ordinance that limits store sizes - build two outlets right next to each other.

Signalling what could be a new approach to getting around such restrictions, Wal-Mart will build adjacent stores in Dunkirk, Md., with one outlet being constructed so that it will be just under the 6,967.5 square-metre limit that is allowed by a Calvert County ordinance.

It is the first time Wal-Mart has considered such a measure, said Mia Masten, a Wal-Mart Stores Inc. spokeswoman.

"As these big-box bills come up, all retailers will just have to be flexible," Masten said. "In this case, we developed a model that allowed us to reach our customers."

Masten said Wal-Mart could use the strategy in other locations.

Calvert County passed an ordinance in August limiting the size of commercial retail buildings to 6,967.5 square metres. Wal-Mart usually builds stores that range from at least 9,290 square metres to more than 18,580 square metres for Super centers.

Wal-Mart proposed a 6,967.3-square-metre store in Dunkirk that will be next to a 2,107-square-metre garden centre. The two stores would have their own entrances, utilities, bathrooms and cash registers.

Wal-Mart has faced backlash for trying to expand in certain areas, and local jurisdictions have passed measures like the one in Calvert County that limit the size of retail stores. Total square-footage of the store would exceed the limit by 30 per cent.

Greg Bowen, who heads the county planning office, said his office will consider the proposal.

"It's not on hold indefinitely," he said. "The county commission has asked the planning commission to defer action until they have a chance to look into (the proposal)."

© The Canadian Press, 2005

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Wal-Mart auto repair workers in St-Hyacinthe, Que., win union accreditation

Canadian Press                 [back to top]
Sunday, March 13, 2005

MONTREAL (CP) - Auto repair shop employees at the Wal-Mart store in St-Hyacinthe, Que., have been granted union certification by the province's labour relations board.

The application to certify about 10 auto repair shop employees was submitted Jan. 28. About 200 workers at the store 60 kilometres east of Montreal were unionized Jan. 18. Negotiations with the company are set to begin March 16, the United Food and Commercial Workers union said in a news release.

"We are constantly working to improve the working and living conditions of Wal-Mart employees, and we will persevere," said Yvon Bellemare, president of Local 501 and the union's Quebec president.

A wide-ranging union drive is underway in Wal-Mart stores in Quebec and several other Canadian provinces.

Wal-Mart workers in Windsor, Ont., voted this week against unionization.

The only two unionized Wal-Mart stores in North America are in St-Hyacinthe and Saguenay, Que., 250 kilometres north of Quebec City.

Last month, after Saguenay employees voted to unionize, the company announced the store would close in May citing its unprofitability.

Wal-Mart, the second-largest company in the world in terms of revenue with more than 4,000 stores, has resisted increasing pressure to accept unionized stores.

The UFCW has been attempting to unionize workers in seven Wal-Mart auto departments in British Columbia.

© The Canadian Press 2005

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If they can make it there ... A nice place in New York still Wal-Mart's dream

By HENRY GOLDMAN              [back to top]
Bloomberg News
March 12, 2005, 9:28PM 

Wal-Mart Stores, recently dropped by a developer from opening what would have been its first New York City store, is looking at other locations in the city and again faces City Council opposition.

Councilman Michael McMahon, a Staten Island Democrat who sits on the Land Use and Zoning Committee, said its members would block the world's largest retailer from opening stores at two locations in the borough unless Wal-Mart changes policies. One site is near the Outerbridge Crossing, a bridge to New Jersey on the island's southwest corner, and the other is in Mariners Harbor in the northwest.

'A good neighbor' "Both locations are environmentally sensitive and both would require zoning changes for Wal-Mart to come in," McMahon said. "A zoning change is a privilege, not a right, and we won't issue one to Wal-Mart until it raises its wages and benefits and can prove to us that it can be a good neighbor."

Mia Masten, Wal-Mart's spokeswoman, confirmed the company's interest in the two Staten Island sites, among others throughout the city. Both are now zoned for manufacturing and would require a zoning change or a variance. The borough is the city's smallest in population, with 444,000 residents in the 2000 Census.

McMahon's comments came two weeks after Vornado Realty Trust dropped Wal-Mart from a proposed shopping center in Rego Park, Queens. At that time, Council Zoning Committee Chairwoman Melinda Katz said Wal-Mart's national labor practices "were overwhelming the conversation" in seeking land use approval for the pro-ject, leading Vornado to back away from the retailer.

Fights across U.S. Katz chaired a Jan. 6 hearing at which labor leaders said Wal-Mart was able to offer low-cost merchandise because it underpaid its workers and independent merchants said Wal-Mart might drive them out of business.

Similar battles have been played out in Los Angeles, Chicago, Denver, Atlanta and other U.S. cities as Wal-Mart seeks to expand beyond rural and suburban markets into urban areas with super-centers selling groceries, household items and clothing.

McMahon said the northwest Staten Island site Wal-Mart was eyeing was in a marshy wetlands area and the southern location, site of a former metal-smelting plant, needed to be cleaned up.

"If Wal-Mart could demonstrate that it's a company we could trust to be a good neighbor, perhaps we would look more favorably upon any application we received from it," McMahon said.

'New York rule' "The best thing it could do would be to adopt a 'New York rule' in which it would treat its workers better if it wanted to locate here," he added.

The developer of the site, South Avenue Development, has hired former Borough President Guy Molinari to help it persuade officials to approve Wal-Mart's presence.

"The public wants Wal-Mart," Molinari said. "Big-box stores have been enormously successful in Staten Island and we don't have the biggest one. Our people are traveling to New Jersey to shop there."

Councilman Andrew Lanza, a Republican who represents the area near the Outerbridge Crossing, said he's "open to the idea" of Wal-Mart coming in.

"It would bring brand new jobs and shopping convenience to my neighbors here," he said. Of those who criticize Wal-Mart, Lanza said, "they are the same people who didn't want Lowes or Costco or Home Depot here."

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Wal-Mart uses new tactic to dodge town law

Retailer building two outlets right next to each other

The Associated Press                                   [back to top]
Updated: 12:39 p.m. ET March 12, 2005

BENTONVILLE, Ark. - Wal-Mart, the world's largest retailer, is employing a new tactic to get around a Maryland town ordinance that limits store sizes — build two outlets right next to each other.

Signaling what could be a new approach to getting around such restrictions, Wal-Mart will build adjacent stores in Dunkirk, Md. with one outlet being constructed so that it will be just under the 75,000 square-foot limit that is allowed by a Calvert County ordinance.

It is the first time Wal-Mart has considered such a measure, said Mia Masten, a Wal-Mart Stores Inc. spokeswoman.

"As these big-box bills come up, all retailers will just have to be flexible," Masten said. "In this case, we developed a model that allowed us to reach our customers."

Masten said Wal-Mart could use the strategy in other locations.

Calvert County passed an ordinance in August limiting the size of commercial retail buildings to 75,000 square feet. Wal-Mart usually builds stores that range from at least 100,000 square feet to more than 200,000 square feet for Supercenters.

Wal-Mart proposed a 74,998-square-foot store in Dunkirk that will be next to a 22,689-square-foot garden center. The two stores would have their own entrances, utilities, bathrooms and cash registers.

Wal-Mart has faced backlash for trying to expand in certain areas, and local jurisdictions have passed measures like the one in Calvert County that limit the size of retail stores. Total square-footage of the store would exceed the limit by 30 percent.

Greg Bowen, who heads the county planning office, said his office will consider the proposal.

"It's not on hold indefinitely," he said. "The county commission has asked the planning commission to defer action until they have a chance to look into (the proposal)."

© 2005 The Associated Press. All rights reserved.

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Way-out Wal-Mart People keep quitting the retail empire

Saturday March 12, 2005                 [back to top]
Guardian

What is it about Wal-Mart where the best of Asda's talent quits rather than earn promotion inside the world's biggest retail empire? Former chief executive Allan Leighton walked to become a serial director and is now Post Office chairman. His successor Paul Mason was at the helm barely a year before quitting to join Matalan and is now European boss of Levi Strauss. Senior directors Richard Baker and Justin King also fled, and now run Boots and Sainsbury's respectively. We could go on (there are many more), and now we have Tony DeNunzio going Dutch with Vendex KBB. There's definitely a pattern.

The theory among retail analysts is that the boys from Bentonville, Arkansas, don't quite get the Brits. As one UK analyst put it yesterday: "We speak the same language, but that is about it. Wal-Mart represents small-town, neo-conservative America. These British executives have a rather different view of the world and that is reflected in the number who move on."

The timing of Mr De Nunzio's move is relatively simple to explain: he got a tap on the shoulder from headhunters Heidrick & Struggles and was offered the opportunity to make a shedload of money in bonuses and options away from the glare of the UK quoted sector.

But there are those who believe his departure was always only a matter of time because Wal-Mart wants to be number one everywhere it operates and cannot accept less.

Since buying Asda in 1999, it has become the second largest UK grocer and developed a £1bn clothing brand. Asda now generates half of Wal-Mart's international sales and represents 10% of the entire global corporation.

Last month, Wal-Mart announced a £600m investment to build 15 new Asda superstores, but it was De Nunzio who failed to convince the Competition Commission to allow any sort of bid for Safeway, which could have turbo-charged growth. Instead the latest TNS data shows signs of Asda's growth starting to slow.

Tesco, meanwhile, has strode yet further ahead and become the world's third biggest retailer. It is simply the most effective competition Wal-Mart faces anywhere in the world.

Asda's performance, while hugely impressive, just does not compare.

Down and dirty

Whitbread's investors can pat themselves on the back. A word here, and a prod there, seem to have done the trick: their company has slapped a "for sale" sign over its entire Marriott hotel chain, reversing last October's decision to sell just a part of it.

This just may be that rare thing: a board of directors opting to create instant value for shareholders, rather than retaining a top-end asset that produces questionable returns but impresses golf partners.

Whitbread these days is about down-and-dirty businesses, like the budget Travel Inn hotels, and mass-market restaurants such as Brewers Fayre and Pizza Hut. It is much the better for it: the share price hasn't looked so healthy for years.

Whitbread spent most of the 1990s in a state of drift, telling the world it was riding the leisure boom but steadily losing its competitive edge. Outsiders cottoned on when Hugh Osmond out-Punched it in the entertaining battle for Allied Domecq's pub estate. Whitbread's share price halved over the next two years. David Thomas, the last chief executive, led the fightback, jettisoning brewing, pubs and the briefly fashionable Cafe Rouge chain that epitomised the old lack of concentration on financial returns.

Alan Parker, the new man, can be forgiven any mixed feelings as Marriott departs, given that he cut his teeth managing it. But yesterday's 8% surge in the share price, speaks for itself.

An investment property boom is in full swing and if a private equity firm, or even a bank, wants to buy Marriott and gear it up with debt, let it: this a perfect moment to sell a hotel chain with too many frills for the modern incarnation of Whitbread.

Back to Plan B

The government is at least consistent in its approach to the EU-wide scheme to cut carbon dioxide emissions - it is consistently muddled. First it put forward one figure and got European commission approval. Then it put forward another, smaller cut and claimed that because it had said its first estimate was provisional Brussels' blessing was valid for the second.

Unsurprisingly, Brussels did not share that view and yesterday the government was forced to backtrack and accept the figure it first thought of. Yet just as it accepted Plan A, it said it would seek to overturn it in the courts in favour of Plan B.

At least this approach will allow British companies to know the basis on which they can plan their carbon strategies for the next three years and kick- start their involvement in the EU emissions trading scheme.

But Britain cannot afford such uncertainty when it comes to the next round of cuts covering the years 2008 to 2010. It is one thing to take leadership, another just to charge ahead regardless.

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Wal-Mart to Get Around Law Limiting Size

Associated Press            [back to top]
03.11.2005, 06:14 PM

Wal-Mart, the world's largest retailer, is employing a new tactic to get around a Maryland town ordinance that limits store sizes - build two outlets right next to each other.

Signaling what could be a new approach to getting around such restrictions, Wal-Mart will build adjacent stores in Dunkirk, Md. with one outlet being constructed so that it will be just under the 75,000 square-foot limit that is allowed by a Calvert County ordinance.

It is the first time Wal-Mart has considered such a measure, said Mia Masten, a Wal-Mart Stores Inc. spokeswoman.

"As these big-box bills come up, all retailers will just have to be flexible," Masten said. "In this case, we developed a model that allowed us to reach our customers."

Masten said Wal-Mart could use the strategy in other locations.

Calvert County passed an ordinance in August limiting the size of commercial retail buildings to 75,000 square feet. Wal-Mart usually builds stores that range from at least 100,000 square feet to more than 200,000 square feet for Supercenters.

Wal-Mart proposed a 74,998-square-foot store in Dunkirk that will be next to a 22,689-square-foot garden center. The two stores would have their own entrances, utilities, bathrooms and cash registers.

Wal-Mart has faced backlash for trying to expand in certain areas, and local jurisdictions have passed measures like the one in Calvert County that limit the size of retail stores. Total square-footage of the store would exceed the limit by 30 percent.

Greg Bowen, who heads the county planning office, said his office will consider the proposal.

"It's not on hold indefinitely," he said. "The county commission has asked the planning commission to defer action until they have a chance to look into (the proposal)."

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Is Wal-Mart Costing Us Billions?

By Selena Maranjian          [back to top]
(TMF Selena)
March 11, 2005

What a fascinating and rich topic Wal-Mart (NYSE: WMT) is. Love it or hate it, it rarely bores us. I myself have written a few articles on the company, such as when I questioned whether the firm was a force for good or evil and heard from many impassioned readers in response, and when I suggested some new business lines for the company. Other Fool writers have also chimed in:

Jeff Hwang: Wal-Mart: $10 Billion Saved Rich Smith: Wal-Mart Paints Bull's-Eye on Itself John Reeves: Predicting the Next Wal-Mart Rich Duprey: Wal-Mart Breaks Into China I recently read some new perspectives on the firm, though, and thought I'd offer them up as food for thought and/or discussion. (Jump into the fray on our Wal-Mart discussion board.)

First up, at Slate.com, Timothy Noah presented an interesting take on a recent speech by CEO H. Lee Scott, Jr. He explained that while Scott seemed to be defending the firm's record on how it treats its employees, Scott may have been really trying to quietly reassure investors that they're not being treated that well -- that pay and benefits remain at relatively low levels. Cynical? You bet. But some compelling data backs Noah up. For example, Scott says that "Wal-Mart's average wage is around $10 an hour, nearly double the federal minimum wage." But that average is skewed somewhat by the steep salaries of those at the top. Scott's own $15 million-plus compensation package, for example, will only bring up the average. The median (or middle) wage would have been a more telling figure.

Scott also explained that "our wages are competitive with comparable retailers in each of the more than 3,500 communities we serve." Noah countered that although this may be true, Wal-Mart has likely driven down the pay rates in such communities, as competitors try to compete.

Meanwhile, in The New York Review of Books, Simon Head reviewed a bunch of books related to Wal-Mart. His article was long and full of too many points to cover here, but these two points, among others, jumped out at me:

"The average pay of a sales clerk at Wal-Mart was $8.50 an hour, or about $14,000 a year, $1,000 below the government's definition of the poverty level for a family of three." This supports Noah's claim.

Head cites a February 2004 report by the Democratic staff of the House Education and Workforce Committee. The report "assesses the costs to US taxpayers of employees who are so badly paid that they qualify for government assistance even under the less than generous rules of the federal welfare system. For a two-hundred-employee Wal-Mart store, the government is spending $108,000 a year for children's health care; $125,000 a year in tax credits and deductions for low-income families; and $42,000 a year in housing assistance. The report estimates that a two-hundred-employee Wal-Mart store costs federal taxpayers $420,000 a year, or about $2,103 per Wal-Mart employee. That translates into a total annual welfare bill of $2.5 billion for Wal-Mart's 1.2 million U.S. employees." He added that state governments are burdened by Wal-Marts, too, with California spending more than $20 million on health care for Wal-Mart employees. So is Wal-Mart behaving criminally? Unethically? Well, perhaps not. In our capitalistic society, where such a firm has a responsibility to shareholders, is it so wrong to try to maximize profits, at any (legal) cost? If we were to punish Wal-Mart, would we then have to go after the many other firms with less-than-ideal practices? I'm afraid that I see both sides of this issue. On the one hand, I wish that the news from Wal-Mart weren't as troubling as it often is. On the other hand, with Wal-Mart's being a successful American business (in which I'm invested) that delivers low prices to many consumers, I wish it well.

Legal Information. ©1995-2005 The Motley Fool. All rights reserved.

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Wal-Mart, Dollar Rattle Billionaire Ranks

By Emily Chasan             [back to top]
March 10, 2005

NEW YORK (Reuters) - Four heirs to Wal-Mart Stores Inc. founder Sam Walton dropped out of the Forbes Magazine's top 10 list of the world's billionaires in 2004, brought down by the retailer's stagnating shares.

They were largely replaced by businessmen from other regions of the world, who benefited in part from the impact of the weak dollar.

Wal-Mart Chairman S. Robson Walton, with a personal wealth of $18.3 billion, was the only Walton to make the top 10 this year after several years in which all five Waltons made the cut.

Slow growth and a bevy of legal problems at the retail behemoth has prompted a 10.8 percent decline in Wal-Mart's stock price since March 2004, cutting the personal wealth of Walton's five heirs by almost $2 billion each.

And the dollar's steady slide in 2004 has fattened the coffers of billionaires abroad. Of the top 10 billionaires, half live outside of the United States, compared with two last year, and several saw their wealth increase by as little as $2.2 billion to as much as $18.8 billion.

The Walton's were replaced on the list by Indian steel magnate, Lakshmi Mittal, who took the no. 3 spot, with a net worth of $25 billion, and Mexican entrepreneur Carlos Slim Helu, who took the fourth spot after his telecommunications fortune grew by $10 billion this year. Ingvar Kamprad, founder of Swedish home furnishings retailer Ikea, and German supermarket owner Karl Albrecht also made the top 10, at no. 6 and no. 8, respectively.

Microsoft Corp. chairman Bill Gates held onto his title as world's richest man for the 11th year in a row, but no.2 billionaire, investor Warren Buffett, narrowed the gap between them to just $2.5 billion. Buffett's Berkshire Hathaway Inc. shares outperformed those of Microsoft this year, prompting speculation the "Oracle of Omaha" may overtake Gates soon.

Saudi Prince Alwaleed, Microsoft co-founder Paul Allen and Oracle Corp. chief executive Larry Ellison rounded out the top 10.

BUDDING BILLIONAIRES

The billionaires club is not as exclusive as it used to be, but the rich are richer.

More than 130 new billionaires were added to the list this year, including gas pipeline tycoon Daniel Duncan, Red Bull energy drink creator Dietrich Mateschitz and lifestyle trendsetter Martha Stewart.

The combined net worth of the billionaires rose to $2.2 trillion from $1.9 trillion a year earlier, while the overall number of billionaires grew to 691 from 587.

Daniel Duncan, a Houston natural gas pipeline mogul who was raised by his grandmother, was the wealthiest new billionaire on the list, with a net worth of $5.1 billion.

The United States had 69 new billionaires, while there were 38 in Europe and 13 in Asia.

Martha Stewart also made her debut onto the list after shares of her company, Martha Stewart Living Omnimedia Inc., doubled during her five-month stint in prison.

"Success does not always mean you have your freedom," said Steve Forbes, chief executive of the Forbes publishing company.

Russian oil tycoon Mikhail Khodorkovsky, was the biggest net loser after charges of fraud and theft landed him in a Moscow prison in October. Khodorkovsky, who just a year ago was ranked 16th among the world's billionaires, lost $12.8 billion from his net worth, Forbes magazine said.

Sixty-eight of the billionaires were women this year, including Russia's first female billionaire, Elena Baturina, a former factory worker who started a plastics company. The majority of the billionaires were self-made and 18 were high school dropouts, Forbes magazine said.

© Copyright 2005 The New York Times Company

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Officials challenge Wal-Mart on child labor

Author: Joelle Fishman                        [back to top]
People's Weekly World Newspaper
03/10/05 11:45

HARTFORD, Conn. — Anger was evident at the state Capitol here recently over revelations of a secret deal between Wal-Mart and the U.S. Department of Labor (DOL) to cover up child labor law violations. The charges include requiring teenage workers to use heavy equipment, including chain saws and forklifts.

State officials are launching a national effort to confront the notorious union-busting company over reports of the 24 child labor violations, 20 of which involved Connecticut stores.

Railing against a “sweetheart deal” on the four-year-old violations that requires Wal-Mart to pay a mere $135,540 in penalties in exchange for a guaranteed 15-day prior notification of inspections, state Rep. Walter Pawelkiewicz, a member of the Legislature’s labor committee, declared, “Connecticut won’t be part of this love affair!”

The Feb. 18 press conference included more than a dozen legislators, state Attorney General Richard Blumenthal and union leaders.

“The problems are bigger than Connecticut, Arkansas and New Hampshire,” Blumenthal said in announcing that he is in contact with attorneys general across the country. As a result of a request by Rep. George Miller (D-Calif.), senior Democrat on the House Education and the Workforce Committee, the DOL is now investigating its own activities.

Blumenthal welcomed the probe but stressed that the DOL should not use that as an excuse “for stonewalling states like Connecticut who want to know who the children were, how many and what they were doing. It took four years to reach a settlement and there are still no details.”

In the effort to “break through the veil of secrecy,” Blumenthal said he is working to involve other attorneys general to hold both Wal-Mart and federal authorities accountable. Noting that errors or improprieties would warrant overturning the settlement, he said, “Wal-Mart had a $3.2 billion profit last quarter. Compare the $135,000 fine to that.”

Blumenthal said in the past, companies would have paid millions of dollars for advance notice of inspections. “Apart from violating law, Wal-Mart has a net plus from this. The fact that this administration recognizes the settlement is much beyond the pale is a good step in the right direction, but it does not justify stonewalling.”

Rep. Kevin Ryan, co-chair of the state Labor Committee, indicated that Connecticut could impose increased fines or expand the investigation to all aspects of labor law, not just child labor.

“Not only child laws, but workers’ human rights are being violated,” Labor Committee Co-Chair Sen. Edith Prague said. “Wal-Mart is notorious for their exploitation of people, paying minimum wage and few, if any, benefits.”

She announced a new bill in the labor committee to protect workers’ jobs if they speak out. The firing of one Wal-Mart worker, allegedly for talking about organizing a union, sparked the bill.

“There is a war on workers here and in Canada,” said Brian Petronella, international vice president of the United Food and Commercial Workers (UFCW) and president of Local 371 in Connecticut. When workers in a meat department in a Texas Wal-Mart voted to join the UFCW, Wal-Mart simply closed down 180 meat departments across the country. In Canada last week, Petronella said, Wal-Mart closed an entire store after employees won an election for union representation.

In a related development, legislators are also outraged that 11.3 percent of the 9,082 Wal-Mart workers in Connecticut are being subsidized by the HUSKY health insurance program at a cost to the state’s taxpayers of $5 million.

“Here is the richest retail company in the world, and we, the taxpayers, are subsidizing their coverage,” said House Majority Leader Christopher Donovan.

In response, a health security bill was introduced March 7 that would require employers of 100 or more to provide health benefits or pay into a government fund to do it for them.

joelle.fishman@pobox.com

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For Labor, a Wal-Mart Store Closing in Canada Is a Call to Arms

By CLIFFORD KRAUSS                        [back to top]
Published: March 10, 2005

JONQUIÈRE, Quebec - Shoppers in this Quebec mill town are about to pay more for ice-fishing gear, snowmobile covers and cheese curds for poutine: the local Wal-Mart is closing this spring.

But Wal-Mart's announcement in February that it could no longer do business here because of skimpy store revenue and escalating union demands is having a much broader impact across Canada and even south of the border. The closing - the first of a Wal-Mart in Canada - is a strategic retreat for the retailer in its war with organized labor.

Since August 2004, when this store became the only unionized Wal-Mart in North America, Jonquière has become a rallying cry for retail union organizers who want to stop an erosion of membership in the grocery industry in both Canada and the United States.

At least three other Wal-Mart outlets in Quebec have received bomb threats since the Jonquière closing announcement, forcing evacuations and losses in sales. Bernard Landry, the leader of the separatist Parti Québécois and a former premier of the province, has announced that he is boycotting the chain. A Quebec television broadcaster compared Wal-Mart to Nazism, but later apologized.

In the last decade, Wal-Mart has become Canada's biggest retailer, shoving the T. Eaton Company out of that spot and contributing to its demise. But in contrast to their counterparts in the United States, unions in Canada have had traces of success in organizing. For the giant American chain, Jonquière has become another barricade in its battle to keep unions out of its business.

"What we were left with was a store that was not going to be viable," Andrew Pelletier, director for corporate affairs at Wal-Mart Canada, said in an interview. "We felt the union wanted to fundamentally change the store's business model."

Unionizing efforts at Wal-Marts in North America have virtually never stuck. A store in Windsor, Ontario, was unionized in 1997, but workers dissolved the union three years later when it failed to deliver a contract. A vote in 2000 to unionize meat cutters in Jacksonville, Tex., was followed by Wal-Mart's turning to prepackaged meat, eliminating the need for meat cutters.

[On Tuesday, 74 percent of workers in Windsor voted against a new union, with both the organizers and Wal-Mart filing unfair labor practices complaints.]

Union leaders say Wal-Mart is using Jonquière as an example to whip workers into line at a second Wal-Mart store outside Montreal that successfully organized in January and in more than 20 other outlets in at least three provinces where organizing efforts have begun.

They also claim that the 17-to-1 vote against unionization at the Wal-Mart Tire and Lube Express in Loveland, Colo., in late February was a sign of the chill sweeping down from Jonquière for workers who fear that organizing a union could mean the loss of their jobs.

"What's at stake here," Michael J. Fraser, Canada national director of the United Food and Commercial Workers, said in an interview, "is whether or not Wal-Mart is going to be successful at attempting to prevent people from exercising their democratic right to form a union."

Workers at various Wal-Marts around Quebec say they are being pressured by both management and labor. They describe a workplace atmosphere poisoned by rumor-mongering, insults and damage to personal property.

Anti-union workers at the Ste. Foy store, which other workers are trying to organize, reported unwanted visits to their homes in the middle of the night by organizers during the unionization drive. Two pro-union cashiers at the Ste. Hyacinthe store outside Montreal reported that they recently had shortages in their registers, which they believe were the work of management trickery to get them into trouble.

"This store is basically hell right now," said Noella Langlois, 53, a saleswoman in the Jonquière store who opposes unionization. "You have two deeply divided clans."

Wal-Mart has been struggling to keep unions out of its Canadian stores since it bought more than 100 outlets from another retailer 11 years ago; it now has 256 Wal-Marts and 6 Sam's Club stores in Canada. A local of the United Food and Commercial Workers succeeded in gathering the signatures of a majority of Jonquière workers last summer.

But the battleground in Quebec, where Wal-Mart has 47 stores, is not particularly favorable to the chain because provincial labor law is tilted in favor of unions. Forty percent of the province's work force is unionized, a rate 25 percent higher than the rest of Canada and more than three times the rate in the United States.

Quebec's labor relations board recently ordered Wal-Mart Canada to stop "intimidating and harassing" cashiers at a store in Ste. Foy, a suburb of Quebec City, amid an organizing drive.

Since the union's success in Jonquière, it has successfully organized a Wal-Mart outlet in Ste. Hyacinthe and collective bargaining is about to begin there. But a union meeting in February was poorly attended because, some workers contend, employees are afraid of losing their jobs.

"The workers are nervous," said Veronique Falardeau, 23, a part-time cashier in the Ste. Hyacinthe store who says she wants a union to gain a more regular work schedule and benefits like insurance. "People are wondering if they closed Jonquière, they'll close our store, too."

Wal-Mart filed a court challenge to the certification process for union cards at the Ste. Hyacinthe store in February, claiming it is undemocratic and open to union pressure tactics.

Wal-Mart managers say a majority of their Canadian workers do not want unions, and they point to the fact that the 190 employees in Jonquière voted in a secret ballot in 2004 against the union. But under Quebec law, union organizers were able to unionize the store anyway by persuading a majority of employees to sign union cards.

Once recognized, the union entered collective bargaining at the Jonquière store and demanded work schedule changes that management said would have forced the hiring of at least 30 more workers and were financially impossible.

"After four collective bargaining meetings, it was clear we were not getting anywhere," said Mr. Pelletier, the Wal-Mart Canada senior manager. "The union is targeting us everywhere in virtually every part of the country. What it feels like and looks like is that they are transferring much of their effort from the United States to Canada."

Mr. Fraser of the United Food and Commercial Workers said he still hoped a government arbitrator could bring the two sides together, and keep the store open. He argued that union card-signing campaigns were more democratic than secret votes because "when there is a vote Wal-Mart uses intimidation tactics."

Intimidation appears to go both ways, according to workers at three Wal-Mart stores in Quebec.

Sylvie Lavoie, a 40-year-old single mother and part-time cashier in the Jonquière store who says she needs a union, accused store managers of taking workers aside before the secret vote and warning them that a union would mean the store would close.

Afterward the workers came to union organizers crying and pleading for promises that they would not lose their jobs.

"They intimidate and do what they want," Ms. Lavoie said.

But Steve Lemieux, a 20-year-old cart pusher in the Ste. Foy store, says it is the union that is the abuser. "People who are for the unions have trouble accepting other opinions and they keep knocking on our doors to get us to sign their cards," he said.

"We don't need a union since there is easy advancement if you work for it."

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Wal-Mart’s Sweatshop-on-Wheels Amendment Withdrawn in House but Battle Not Over as Highway Bill Moves to Senate

by Public Citizen President Joan Claybrook         [back to top]
March 9, 2005

We are gratified that Rep. John Boozman (R-Ark.) today withdrew the Wal-Mart amendment during House floor debate on the highway bill. This inhumane measure would extend the allowable workday of truckers from 14 to 16 hours – the equivalent of two full workdays for most Americans – and would lead to more fatigued truckers on the highway and more danger to American motorists. For truckers, this would amount to two months of extra work each year, with no extra pay. Truck driving already is the most dangerous occupation in the United States. Almost 5,000 people each year die in crashes involving big rigs.

But this important safety battle is far from over. The sweatshop-on-wheels provision could be added to the highway bill in the Senate or it could be tacked onto the bill in a House-Senate conference committee. We have heard reports that Senate offices are being deluged with requests to enact this abusive measure.

The proper venue for establishing hours-of-service standards for truckers is the Federal Motor Carrier Safety Administration, which is in the midst of revising these rules after the D.C. Circuit Court ruled that the agency had failed to take driver health into consideration when it enacted new standards in 2003. Congress should not interfere with this process.

Americans want and deserve safe highways. Lengthening the workday for truckers is abusive to them and threatens public safety on the highway.

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Wal-Mart Tries to Skirt Maryland Size Cap Law

Mar. 9, 2005                [back to top]

Wal-Mart is attempting to skirt a size cap law in Calvert County, Maryland, by erecting two side-by-side stores.

The law limits stores in the town of Dunkirk to no more than 75,000 square feet. Wal-Mart has proposed a 74,998-square-foot store adjacent to a 22,689-square-foot garden center.

read the rest at Hometown Advantage

Wal-Mart plans to develop its own gas-station brand

Tricia Lynn Silva                            [back to top]
San Antonio Business Journal
March 9, 2005

Wal-Mart Stores Inc. has begun building gas stations under its own brand name, according to a report by online industry publication Supermarket News. In the past, the retailer partnered with companies such as Murphy Oil Corp., Sunoco Inc. and Tesoro Corp. to develop gas stations at its stores.

Supermarket News reports that Bentonville, Ark.-based Wal-Mart (NYSE:WMT) has already built five gas stations under its own brand: four at area Sam's Clubs in Virginia, and one at a Wal-Mart Supercenter in Pineville, Mo.

Wal-Mart currently operates 10 stores in the San Antonio area -- a mix of retail stores and supercenters. Murphy (NYSE: MUR), an oil and gas company based in El Dorado, Ark., owns the San Antonio Wal-Mart sites.

San Antonio-based Tesoro (NYSE: TSO) owns and operates Mirastar-branded gas stations at Wal-Mart stores in the Western United States where Tesoro's oil refineries are located.

Sunoco (NYSE: SUN) is an oil refining and marketing company based in Philadelphia.

© 2005 American City Business Journals Inc.

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Wal-Mart labour wars rage as Canadian workers reject union bid

[09 Mar 2005]            [back to top]
TORONTO (AFP)

A major trade union accused retail giant Wal-Mart of thwarting workplace democracy, after workers rejected the chance to become the third Canadian store to secure union representation.

Workers at a branch of Wal-mart in Windsor, adjacent to the US city of Detroit, voted by a majority not to join the United Food and Commercial Workers Union (UFCWU).

"Today's vote result follows a clear pattern of Wal-Mart Canada associates voting against union representation when given the chance to express their views in a democratic, secret-ballot process," Wal-Mart said in a statement.

But the union pledged to battle on, accusing store bosses of waging a war of intimidation.

"We're disappointed for the workers but we're not surprised," said Michael Fraser, national director of UFCW Canada.

"The vote demonstrated Wal-Mart's fear tactics worked."

The union accused Wal-Mart of pressuring workers to sign anti-union positions and of warning that an already unionized store in the French-speaking province of Quebec could close.

Wal-Mart meanwhile, charged the union with conducting overly aggresive tactics to get workers to sign up.

In North America, a union must prove to authorities that it has the support of a majority of workers in a business to be accredited, and then becomes the sole representative of all the staff.

Last year, workers at two Wal-Mart stores in Quebec become the first two sets of workers to win union recognition at the retail giant's stores in the continent.

Wal-Mart complained the unionizing process in Quebec was "undemocratic" as it did not permit workers to have a secret ballot on the issue.

Low labor costs are among factors which have allowed Wal-Mart to slash prices on goods in its huge stores, which stock groceries to golf clubs and everything in between.

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State probes 'injury' to IWI

By Vicki Viotti                   [back to top]
Posted on: Wednesday, March 9, 2005

The state attorney general's office has launched a civil investigation into the appearance of "widespread desecration and injury" during archaeological work on Native Hawaiian remains unearthed during construction of the Ke'eaumoku Street Wal-Mart complex.

This has "indefinitely" postponed the reburial of an estimated 61 sets of iwi, or bones, according to yesterday's announcement by state historic preservation officials. Last month, officials put off the Feb. 18 reburial.

Dick Pacific Construction Co., the contractor on the Wal-Mart project, hired Aki Sinoto Consulting for the archaeological inventory of the remains. And Sinoto and the crew of his namesake company had been working since the summer on sorting out the remains, some of which were mixed because of previous development at the site.

The potential violations of state burial law include gluing of the remains during the inventory work, said James Paige, the deputy attorney general working on the case.

"Also, there appeared to be a lot of writing on remains with what looks to be permanent marker or ink," he said. "Any time you use an intrusive method to examine remains, you need to get authorization. You're dealing with a human's remains, a sensitive cultural issue."

Paige said he has not seen the remains, which are in a secured trailer on the Wal-Mart property, but he said state historic preservation officials checked them and reported that the writing and the gluing may have gone beyond what was authorized.

Sinoto, who turned over the remains after the state set a Feb. 11 deadline, said yesterday that he has not received official notification of any specific allegations and thus declined comment.

However, Rona Ikehara, an archaeological bone specialist he hired to assist in the work, issued a written response in which she called the state's action "absurd."

"The remains were treated by laboratory personnel with utmost respect at all times," Ikehara said, adding that the staff was "forbidden to complete this task, which could have been finished with only a few more weeks of work."

Miles Takaki, member of a family who had been designated as "lineal descendants" under the burial law, agreed and said that the family found none of the work to be desecration. Takaki also said state officials have not communicated about any of this with the direct descendants. "We question the motivation of this investigation and why so late in the game," he said.

Melanie Chinen, state Historic Preservation Division administrator, could not be reached for comment. But in a written statement, she said the state must investigate possible violations "to ensure the future protection of all human remains and to preserve the burial traditions in our community."

Attorney Moses Haia is representing families that filed a suit challenging the way state burial law has been enforced in the Wal-Mart case. The lawsuit is scheduled for court hearings this summer.

Haia acknowledged that further delay of the reburial "troubles us" but added that potential violations should be investigated. He said he is doing his own check of public documents to see if there's evidence of violations.

In a written statement, Wal-Mart spokeswoman Cynthia Lin said the company "will continue to cooperate with all involved parties until the iwi are reburied."

Reach Vicki Viotti at vviotti@honoluluadvertiser.com or 525-8053

© COPYRIGHT 2005 The Honolulu Advertiser, a division of Gannett Co. Inc.

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Our Take: Responding to Reich on Wal-Mart

Mar. 8, 2005           [back to top]

Our response to the destructive force of mega-corporations like Wal-Mart ought to involve much more than adopting regulations that "soften the blows" and "slow the pace of change," as Robert Reich, former Secretary of Labor under Clinton, argued in a recent New York Times op-ed entitled "Don't Blame Wal-Mart."

read the rest at Hometown Advantage

UFCW Canada: Democracy Loses to Wal-Mart Canada Intimidation

Mar 8, 2005            [back to top]
(CCNMatthews via COMTEX)

WINDSOR, ONTARIO,-- The Ontario Labour Relations Board (OLRB) has been asked to consider a second certification vote at a Windsor, Ontario Wal-Mart following charges Wal-Mart conducted a campaign of intimidation leading to a up to a certification vote held at the store on Tuesday.

The vote was conducted by the OLRB with ballots being cast at the store throughout the day concluding at 9:30 p.m. When the ballots were tallied the OLRB determined that a majority of the declined to form a union for now.

"We're disappointed for the workers but we're not surprised," said Michael J. Fraser, national director of UFCW Canada. "The vote demonstrated Wal-Mart's fear tactics worked."

"A month ago Wal-Mart posted a notice on the Windsor lunchroom bulletin board announcing they would be closing a store in Jonquiere that recently unionized. And throughout this week department managers were taking employees one by one out to the parking lot to sign anti-union petitions," explained Fraser.

"Wal-Mart only talks about workplace democracy when the workers are trying to join a union so they can intimidate them. The rest of the time it's 'do what you're told or get out'. Today democracy lost out to Wal-Mart's intimidation," said Fraser," but our support for these workers isn't over yet."

On Monday UFCW Canada filed unfair labour practice charges against Wal-Mart. Those charges detail a pattern of worker intimidation and harassment at the Windsor store in the months leading up to today's vote. Additional charges, substantiated by former and current Wal-Mart employees, detail a campaign to sabotage a previous union at the store that left a paper trail leading back to the office of then Ontario Premier Mike Harris.

"Wal-Mart Canada has been found guilty four times of intimidating employees during a union campaign; twice just in the last four months in Quebec, " said Fraser.

"The first time was in Windsor in 1994. Ten years later they are at it again because the only rules that Wal-Mart goes by are its own."

The new charges against Wal-Mart will be heard by the OLRB at hearings scheduled March 30, April 4 and 5, 2005.

UFCW Canada Michael Forman UFCW Communications (416) 579-8330

Copyright (C) 2005, CCNMatthews. All rights reserved.

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Wal-Mart, other retailers push to lengthen truckers' workday

02:39 PM EST Mar 8            [back to top]
LESLIE MILLER

WASHINGTON (AP) - Wal-Mart and other retailers are lobbying Congress to extend the workday for truckers to 16 hours, something labour unions and safety advocates say would make roadways more dangerous for all drivers.

Representative John Boozman, an Arkansas Republican whose district includes Wal-Mart's headquarters in Fayetteville, is sponsoring a bill that would allow a 16-hour workday as long as the trucker took an unpaid two-hour break. The proposal is expected to be offered as an amendment during debate over the highway spending bill Wednesday.

"Truckers are pushing harder than ever to make their runs within the mandated timeframe," Boozman said. "Optional rest breaks will reduce driver layovers and improve both safety and efficiency."

Current rules limit drivers' workdays to 14 hours, with only 11 consecutive hours of driving allowed, union leaders and safety advocates say. That gives truckers three hours to eat, rest or load and unload their trucks.

Critics of the proposal accuse Wal-Mart of trying to fatten its profits by forcing truckers to spend more time waiting at the loading dock without getting paid.

The International Brotherhood of Teamsters "hasn't gotten one complaint from drivers saying they don't have time for a break or a meal," the union's vice-president, John Murphy, said at a news conference Tuesday.

Joan Claybrook, president of the safety advocacy group Public Citizen, said drivers could end up starting their workday at 8 a.m. and quitting at midnight.

"This is a sweatshop-on-wheels amendment," Claybrook said. "The last thing we need is for tired truckers to become even more fatigued and threaten the safety of those around them on the roads."

The current rule had been struck down in federal court because it didn't take into account truck drivers' health. In October, Congress reinstated the rule for one year. If the Boozman proposal is adopted, it would retain the 16-hour workday regardless of any new rule.

Nearly 5,000 people were killed in large truck crashes in 2003, and those vehicles were three times more likely to be involved in fatal crashes than passenger cars, according to the National Highway Transportation Safety Administration.

Wal-Mart spokesman Erik Winborn said the proposal has broad support among the trucking industry and other retailers.

"We support it because we feel it would actually enhance safety rather than hurt safety," said Winborn, whose company employs about 7,000 truck drivers.

Wal-Mart employees were Boozman's top contributors in 2003-04, giving him $48,152 US for his re-election campaign, according to the Center for Responsive Politics. Wal-Mart and its employees gave $44,500 to Boozman for his first successful bid for Congress in 2001-02, the last year corporations could give to congressional candidates.

© The Canadian Press, 2005

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Wal-Mart Union Files Complaint Amid Ontario Organization Drive

March 8                 [back to top]
Bloomberg

The United Food and Commercial Workers' Canadian unit filed an unfair labor practice complaint against Wal-Mart Stores Inc., saying the world's biggest retailer is trying to derail an organization drive at a store in Windsor, Ontario.

The union said it filed the complaint with the Ontario Labour Relations Board yesterday. Wal-Mart will ``vigorously'' defend itself and accused the union of using ``force and intimidation'' to recruit the workers in Windsor, the Toronto Star reported today.

Employees at the Windsor store are voting today on whether to join the United Food and Commercial Workers. It isn't clear when the results of the vote will be announced, union spokesman Michael Forman said in a telephone interview today.

Wal-Mart has been fighting union organizing efforts in Canada and the U.S. Officials of the United Food and Commercial Workers have said they are organizing more than 20 Wal-Mart stores across Canada.

Only two of Wal-Mart's North American stores are unionized and they are both located in Quebec. The company has already announced its intention to close one of them in May.

In 1997, the Windsor store became the first Wal-Mart outlet in North America to win certification from the labor board after an organizing drive by the United Steelworkers of America. No collective agreement was ever signed and the union was later decertified.

Wal-Mart spokesman Andrew Pelletier didn't immediately return a call seeking comment today.

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“Wal-Mart Amendment” Would Increase Trucker Hours, Endanger Motorists

Safety Groups Call on Congress to Reject Deadly Measure

March 8, 2005                 [back to top]

WASHINGTON, D.C. – Public safety advocates called on Congress today to defeat a measure being pushed by Wal-Mart and other retail and short-haul truckers that would extend truckers’ workdays to 16 hours – an excessively long day that research shows would lead to a dramatic increase in highway crashes. U.S. Rep. John Boozman (R-Ark.) plans to introduce the measure, H.R. 623, as an amendment to the highway bill tomorrow on the House floor.

Sixteen hours is double the standard eight-hour workday and two hours longer than the day truckers now may be required to work, the safety advocates said at a press conference held on Capitol Hill. Wal-Mart is among the country’s worst 100 carriers in terms of crash rates, according to the Department of Transportation. In 2003, 5,382 Wal-Mart truckers traveled the roadways; 173 Wal-Mart trucks were involved in highway crashes, causing 10 fatalities.

“Requiring truckers to work 16 hours straight is inhumane,” said Joan Claybrook, president of Public Citizen, which has worked for years to lower the number of hours in a trucker’s workday. “It’s pure exploitation and a safety hazard to have rolling sweatshops on our highways where drivers work the equivalent of two full workdays in a single day. Not paying them for this two extra months a year of work is outrageous.”

Said Daphne Izer, founder of Parents Against Tired Truckers (PATT), whose son and three friends were killed October 1993 in a crash involving a tired Wal-Mart truck, “What Wal-Mart is seeking will lead to more highway slaughter and more shattered lives. Congress bestows enough gifts on industry as it is. Lawmakers should not give Wal-Mart this gift.”

Almost 5,000 people die annually in the United States in crashes with trucks. The National Transportation Safety Board estimates that 30 to 40 percent of truck crashes are caused by tired truckers. The Wal-Mart amendment would require truckers to work 10 extra hours per week, adding up to a maximum of two extra months of work per year with no extra pay. Working more than 60 hours per week in any job increases the odds of a sleep-related crash by 40 percent, research shows.

“On behalf of the 600,000 Teamsters who work on our nation’s highways and byways, and in the interest of public safety, we must stop this ill-conceived measure in its tracks,” said Jim Hoffa, president of the Teamsters Union. “I call on the Congress to recognize the fatal flaws with this amendment and vote it down.”

Added John Murphy, vice-president of the Teamsters Union, “Every day, 600,000 Teamsters start their shift by turning the key to an 18-wheeler, delivery van, highway maintenance truck, school bus or some other work vehicle. In addition, we represent tens of thousands of toll collectors, construction workers, and public safety officers across the nation. I’m here today to represent those hard-working Americans because – for them – highway safety means workplace safety.

The Wal-Mart amendment is an attempt make an end-run around a D.C. Court of Appeals ruling last year. The court found that the rule setting the current 14-hour workday – which took effect January 2004 – did not take worker health into account. It also described the rule as fundamentally flawed in every area challenged by the parties and unsupported by scientific evidence. The ruling came after a lawsuit was filed in 2003 by Public Citizen, Citizens for Reliable and Safe Highways and PATT.

“Safety groups, truck crash survivors, truck drivers and the American public are tired of attempts in Congress to roll back safety,” said Jaqueline Gillen, vice president of Advocates for Highway and Auto Safety. “Public opinion polls show that Americans are tired of inadequate government attention to truck safety problems. We ask Congress to give it a rest and stop these assaults on safety.”

The rule at issue in the case permitted up to 11 hours of consecutive driving. Before 2004, truckers could drive no more than 10 consecutive hours.

Last year, in response to a request from the Bush administration, Congress enacted temporary legislation allowing the new rule to stay in place for one year, until September 2005, so that the Federal Motor Carrier Safety Administration (FMCSA) could develop a rule consistent with the court’s ruling.

“Many truck drivers are already exhausted working fourteen-hour days, and adding two more hours to the workday will only increase fatigue and compromise overall highway safety,” U.S. Rep. Mike Honda (D-Calif.) said. “More than 15,000 Americans have died in truck-related accidents in the last three years; the Boozman Amendment threatens to exacerbate this public health crisis.”

Also attending the press conference were Rick and Ann Curl, from Overland Park, Kansas, whose 15-year-old daughter, Ashley, was killed in a crash caused by a tired trucker in 2001 when she was returning from a horse show.

“Our daughter was needlessly killed by a tired trucker. If a tired pilot causes a plane crash Congress demands action, but tomorrow it will vote on a special interest bill to make tired truckers work even longer hours. How many more Ashleys have to die before the government gets serious about truck driver fatigue?” asked Rick Curl.

The safety groups also denounced attempts by the administration to amend the SAFETEA reauthorization bill by removing the requirement that FMCSA consider driver health in promulgating rules and enacting the overturned rule into law. This would gut the agency’s ability to protect not only truckers but also the public, the groups said. The administration should fulfill its safety priority mission and re-issue a scientifically sound new hours-of-service rule, and should not look to Congress to help it evade its clear responsibility to protect truck driver health and public safety.

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Adjacent Wal-Marts May Dodge Size Curbs

Calvert Had Stopped Supercenter Plans

By Amit R. Paley                [back to top]
Washington Post
Monday, March 7, 2005

Robin Gottlieb cringed when she learned of Wal-Mart's plans to build a store the size of three football fields near her home in Dunkirk, a cozy hamlet in Southern Maryland ringed by rolling tobacco fields. The 44-year-old librarian feared it would overwhelm her tightknit community and usher in even more development.

After intense lobbying from Gottlieb and her neighbors, Calvert County officials passed tough regulations last summer that limited the size of big-box stores in quaint town centers such as Dunkirk's. Gottlieb and her friends arranged to cheer the victory with celebratory drinks.

But Wal-Mart, the world's largest retailer, appears to have hit upon a novel way around the rules: divide the store in two.

In what company officials are calling one of the first arrangements of its kind in the country, Wal-Mart plans to build a 74,998-square-foot store cheek by jowl with a 22,689-square-foot garden center. The two Wal-Marts -- each with its own entrance, utilities, bathrooms and cash registers -- would have a combined area 30 percent larger than the 75,000-square-foot limit for a single store in Dunkirk.

The tactic is the latest example of Wal-Mart's increasingly creative responses to the scores of jurisdictions, including Prince William and Montgomery counties, that have passed regulations limiting the size and location of big-box stores.

"It almost points out the futility of municipalities developing ordinances and laws that restrict the size of stores," said Kenneth E. Stone, professor emeritus of economics at Iowa State University, who has studied the company for 20 years. "There's always a way around them, and an outfit as big and smart as Wal-Mart will think of a way."

Mia Masten, community affairs manager for Wal-Mart's eastern region, said she believed the Dunkirk site would be the first time the Bentonville, Ark., company will build two side-by-side stores in response to size restrictions. It is a strategy that Wal-Mart is likely to consider in other areas, she said.

"As these big-box bills come up, all retailers will just have to be flexible," she said. "In this case, we developed a model that allowed us to reach our customers."

Wal-Mart has two dozen stores in the Washington region, all of them outside the Capital Beltway. Some communities, including the District, are courting the retailer for the jobs and tax revenue the giant store could bring.

But in this hamlet in Calvert, a narrow peninsula on the Chesapeake Bay, residents are incensed at what they consider Wal-Mart's blatant disregard for their wishes.

"They're like a slippery eel that won't be pinned down," said Gottlieb, a leader of Calvert Neighbors for Sensible Growth, which lobbied for the big-box ordinance and now is fighting Wal-Mart's newest proposal. "But we can't let them get away with this. It makes a mockery of our county."

Wal-Mart officials say there is nothing Calvert can do to prevent construction of the stores. Mark Davis, a lawyer for Charlotte-based Faison Enterprises, which is developing the Wal-Mart site, said the county can regulate only the size and nature of buildings. He said it would be illegal and discriminatory to create laws that regulate the owners of specific buildings.

Still, the county commissioners said Wal-Mart's plan violates the intent of the regulations. Last month, they asked the planning board to delay any action on the Dunkirk plan so the county attorney can evaluate possible options to stop the stores.

Calvert is hardly the first jurisdiction to try to block Wal-Mart from building in its community. Opposition to the company has mounted as organized labor -- increasingly threatened by non-unionized Wal-Mart's entry into the food sector -- has joined with preservationists and small-business owners to keep the retailer at bay.

Last month, plans for the first Wal-Mart in New York were scrapped after intense opposition from several City Council members and congressional representatives. In November, Montgomery passed tough zoning regulations on big-box stores. Prince William set a maximum size for stores last April. Alexandria requires special permission for retail outlets larger than 20,000 square feet.

Wal-Mart has grown increasingly resilient when faced with such restrictions. In Inglewood, Calif., the company tried to circumvent the City Council's rejection of its 130,000-square-foot superstore by putting a measure before voters that would have exempted the company from the city's zoning and environmental laws. It was rejected last April by 60 percent of voters.

In Tampa last year, Wal-Mart opened a 99,000-square-foot Supercenter prototype designed to come in just below the 100,000-square-foot size caps imposed by cities and counties across the country.

Masten concedes that splitting a store into side-by-side parts may not be the most cost-effective or consumer-friendly design, but she said it is the best way to serve Dunkirk customers in light of the regulations. "This makes more sense than having the general merchandise store on one side of town and the garden center on the other side," she said.

Opponents charge that Wal-Mart is concerned less with customers than with a profit-centered approach that disregards community desires.

"They will try any tactic that they think they can get away with," said Al Norman, 58, founder of Sprawl-Busters, a Massachusetts-based group that helps communities fight big-box stores. "I've adopted the attitude with Wal-Mart that having a clear intent in your ordinances doesn't mean anything with them."

The tenacity of Wal-Mart Stores Inc. in its march across the American landscape has helped make it the nation's biggest company. The retailer, which rang up more than $288 billion in sales last year, has 1,353 regular Wal-Mart stores in the United States and 1,713 Supercenters, which sell grocery items.

In Calvert, a once-rural outpost transforming into a bustling bedroom community, there is widespread fear that a Wal-Mart in Dunkirk could shatter the county's quiet. Residents worry that the store would draw shoppers from neighboring Prince George's and Anne Arundel counties, further clogging the county's only major highway and turning Calvert into a bustling retail hub for the region.

Gottlieb said she worries that Wal-Mart will continue adding stores to its Dunkirk complex. "Wal-Mart will no doubt continue adding 'modules,' until they have the auto repair center and food store they'd originally planned, and Calvert County will have a sprawling, ugly, megaplex of 'Wadules,' " she wrote in a letter to the county commissioners.

About 50 members of Calvert Neighbors for Sensible Growth turned up Feb. 23 at the planning board's usually sparse meeting. Clutching handmade signs with such messages as "Rules are rules!!" they urged the board not to allow Wal-Mart to sidestep the regulations.

Yvonne Remz, 49, who moved to Dunkirk three years ago, testified that her hometown of St. Mary's, Pa., had been devastated since the opening of a Wal-Mart. Family friends lost jobs, small businesses closed and the social fabric of her community began to fray, she said.

"I don't have a downtown St. Mary's anymore," she said with a slight break in her voice.

The National Trust for Historic Preservation highlighted the threat big-box retailers pose for rural areas when it placed the state of Vermont on its annual list of endangered sites last year. The group said stores such as Wal-Mart drain tightknit communities of their unique character and contribute to the homogenization of American life.

That's why Cornelia Poudrier, the founder of Calvert Neighbors for Sensible Growth, said she would work relentlessly to keep Wal-Mart from exploiting the apparent loophole in the county regulations.

"This could ruin the county forever," she said. "We're fighting to preserve our way of life."

© 2005 The Washington Post Company

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New Math at Wal-Mart

March 7, 2005         [back to top]    

To the Editor:

Re "Don't Blame Wal-Mart," by Robert B. Reich (Op-Ed, Feb. 28):

If Wal-Mart offered high-paying union jobs, as do the auto industry and the government, it would be seen as a savior in small towns and welcomed into big cities.

Would increasing wages cripple the company? If the wages of Wal-Mart's 1.2 million workers were increased to $25 an hour (from about $10), the company's costs would go up by about $36 billion.

Passing on that increase to consumers would add about 12 percent to the company's current annual revenues.

Therein lies the choice: jobs that pay about $50,000 a year for more than a million Americans, or a 12 percent discount on Gummy bears and barbecue grills.

William Seay Nyack, N.Y., March 1, 2005 The writer, a psychologist, is a union representative for the New York State Public Employees' Federation.

Copyright 2005 The New York Times Company

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3 Candidates Hope to Rout Wal-Mart

Challengers in Rosemead's election on Tuesday seek to unseat incumbents who backed the store's move into the community of 53,000.

March 6, 2005                  [back to top]
By Jason Felch
LA Times

A 23-acre plot of gravel and grass has caused a political divide in Rosemead, where the campaign for three City Council seats has largely become a referendum on plans to build a Wal-Mart Supercenter.

Three incumbents helped approve the plan in September. Now three challengers opposed to the development hope to win the seats in Tuesday's election.

But even if the challengers prevail, it's unclear whether the project could be stopped.

The challengers have received support from the AFL-CIO, several other unions and U.S. Rep. Hilda L. Solis (D-El Monte) and state Sen. Gloria Romero (D-Los Angeles), who attended a rally Saturday to encourage participation in an election that typically draws just several thousand voters. Afterward, about 100 residents, union members and community activists fanned out to canvass the city with fliers.

Wal-Mart has contributed more than $23,000 to the reelection of the incumbents, including two recent mailers, said Peter Kanelos, regional director for community affairs for Wal-Mart. By comparison, the retail giant has contributed just $1,000 to one candidate, City Councilman Bernard Parks, in the Los Angeles mayor's race, he said.

"Rosemead has much more impact because we can be much more involved," Kanelos said.

The Wal-Mart debate has created an unusually heated political season in the city of 53,000 residents, candidates on both sides said. Seven candidates are vying for council seats that four years ago went unopposed.

"Normally it's just boring, humdrum elections," said Councilman Joe Vasquez, who has been on the council for 13 years. "As long as I've been here, I've never seen this."

By Saturday, city officials said 2,000 absentee ballots had been sent out, and some expect a record turnout. Both sides allege that the election has included misleading and negative campaigning. "This is probably the most outside money that I've ever seen," said Mayor Margaret Clark, who is seeking reelection.

Rosemead is the latest electoral battleground to pit unions and community groups against the world's largest retailer. Last April, Inglewood voters overwhelmingly defeated an initiative put on the ballot by Wal-Mart that would have allowed a new development there without an environmental review or public hearing. The company spent $1 million in that campaign.

The site for the Rosemead development straddles a geological fault in the southern portion of the city. It is bordered by an elementary school and residences, commercial buildings and a golf course.

The political fault lines are familiar. Proponents say the Wal-Mart will bring 400 new jobs, hundreds of thousands of dollars in revenue for the city and a much-needed grocery store. Opponents predict traffic jams and the demise of local businesses.

Save Our Community, a neighborhood group opposed to the project, said its efforts to reason with the current City Council have been rebuffed. "It's the respect they did not get from the council that is driving this," said Polly Low, one of the challengers. The group is backing her, John Tran and John Nunez.

Council members, who voted 5 to 0 to approve the project, said the neighborhood group's concerns do not reflect the desires of the broader community, which recently lost its only chain grocery store. Mayor Clark and Councilmen Bill Alarcon and Vasquez think their support for Wal-Mart will help them hold on to their seats.

Another challenger, Dennis McDonald, is running without the support of Wal-Mart or unions, and favors the project.

Some rally participants Saturday who live closest to the site seemed the most concerned.

"I'm voting on this issue. I'm that upset," said Lynda Harbert, 53, who lives two blocks away. She said her real estate agent told her the value of her house will go down by $10,000 if the store is built. "The thought of having a 24-hour Wal-Mart down the block scares me."

A mile away, at the Diamond Square shopping area, some residents and shop owners were less concerned.

"Rosemead is a lot of second-generation Chinese families," said Vinh Ngo, 31, a bank executive. "Most of the folks here shop Asian. These stores will be around forever because they cater to the community."

The Ranch Market there sells items not typically found in Wal-Marts: live striped bass, lotus root, boiled salted duck eggs and 50-pound bags of rice.

Jenny Suang, who sells jade trinkets, brass statuettes and feng shui supplies, pointed at her goods and asked, "Does Wal-Mart sell this?"

Despite the debate, it is unclear what a new group of council members could do to prevent the project, which has already been granted the permits it needs to build. A lawsuit contesting the project's environmental impact report could be resolved in April.

"We will start construction soon," said Wal-Mart official Kanelos.

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Welcome to Sherwood Forest, Er, Wal-Mart

By DANIEL AKST             [back to top]
March 6, 2005

THE recent bankruptcy filing of Winn-Dixie Stores, the supermarket chain, would seem to be the latest evidence that Wal-Mart, dreaded by competitors as retailing's 24-hour-a-day death star, has lost none of its price-cutting potency. The company's apparent invincibility is part of what galls its critics, whose opposition led to the cancellation of a proposed Wal-Mart in Queens.

The conventional criticism of Wal-Mart is that it's an insatiable capitalist juggernaut, reaping private benefit at the expense of the public good. The view retains some currency, I suspect, because many of Wal-Mart's critics haven't really shopped there.

The funny thing is that, for quite a while, this view has had the situation almost exactly backward. Instead of producing private benefit at public expense, Wal-Mart has been producing public benefit at private expense. And the equation is likely to become ever more lopsided.

Like the airlines, whose investors generously provide low fares and convenient service while forgoing gains for themselves, Wal-Mart has kindly mustered considerable capital from investors with the goal of providing all kinds of basic goods under one roof at convenient locations and amazingly low prices. These investors must be charitably minded because they aren't the main beneficiaries of Wal-Mart's business.

For several years now, the shareholders, who have more than $200 billion tied up in the company, have not done especially well. Since the end of 1999, Wal-Mart stock is off 23 percent, while Target is up 43 percent and Lowe's is up 95 percent.

The big winners during this period were the juggernaut's customers, who gained by having Wal-Mart drive down the price of consumer goods. Assuming that Wal-Mart investors are more affluent than its shoppers, the system offers a progressive transfer from rich to poor - from capital owners to less prosperous American consumers and hard-working Chinese factory hands. It's like Robin Hood, only with parking.

It's tempting to say that some of the benefits to shoppers come at the expense of Wal-Mart's roughly 1.2 million employees, but it's a tough case to make. Many Wal-Mart employees presumably can't get better jobs; if they could, they would. By continuing to work at the chain, they are showing that they prefer the jobs they have to no jobs at all. If Wal-Mart vanished, in fact, they would be in big trouble indeed.

For Wal-Mart shoppers, the good news is that, for a variety of reasons, they can expect the investors' largess to continue. If you shop at Wal-Mart or its Sam's Club unit, you know that the company cannot afford to raise prices much, because prices are almost the only reason to go to these places. I shop at Wal-Mart stores occasionally, and the ones I visit are poorly lit, poorly organized and unenthusiastically staffed. The clothing is mostly relentlessly unfashionable, and the groceries far from tempting when compared with those of a first-class supermarket chain like Wegmans, based in Rochester; that chain is a perennial on Fortune magazine's list of best places to work. If Wal-Mart does improve its stores, it's hard to see how customers will be made to pay for it without the risk of sending them elsewhere.

WAL-MART'S low cost of labor, meanwhile, appears to be under pressure. Sooner or later, union organizers may succeed at some of its stores, and in any event, the company may have to spend more on wages, benefits and working conditions, if only to improve its public image and to keep the unions at bay. Then there is sheer arithmetic: Wal-Mart is already so big that it simply will not be able to match the hypergrowth of its own past unless it soon employs everyone in the world.

If you don't have much money, Wal-Mart is a godsend, and, in a way, that's the trouble. Wal-Mart's hold on its shoppers is largely mercenary, and therefore tenuous. To me, shopping at Wal-Mart feels like a chore, and Sam's Club is better only if there's no Costco nearby. In other words, I think the juggernaut is vulnerable. It may well be, for the foreseeable future, that it's smarter to buy stuff at Wal-Mart than to buy stock in Wal-Mart. The stock may or may not be a good deal. The stuff is a sure thing.

Daniel Akst is a journalist and novelist who writes often about business.

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Canadian Wal-Mart in 2nd Union Effort

By THE NEW YORK TIMES               [back to top]
March 3, 2005 

OTTAWA, March 2 - Workers at a Wal-Mart store in Windsor, Ontario, will try to form a union for a second time, union officials said Wednesday.

The United Food and Commercial Workers Canada filed on behalf of the employees with the Ontario labor board Tuesday.

Andrew Mackenzie, the union representative who led the organizing drive, said Wednesday that the union delayed its application more than two weeks after Wal-Mart said that a unionized store in Jonquière, Quebec, would be closed in May. Workers at that store are in the process of negotiating their first contract.

Andrew Pelletier, a spokesman for Wal-Mart Canada, said the company would challenge the petition on the ground that the union's definition of the store's bargaining unit was undemocratic. According to Mr. Pelletier, the union wants to exclude 50 hourly workers from the unionization vote. About 200 people work in the store.

Mr. McKenzie said the 50 were excluded because they all had the word "manager" in their titles. In 1997, the Windsor store, which was then in a different location, was organized by the Canadian arm of the United Steelworkers of America.

After the union and the company failed to negotiate a contract, employees voted to remove the union in 2000.

Copyright 2005 The New York Times Company 

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Details sought on Wal-Mart child labor settlement

By LOLITA C. BALDOR                      [back to top]
Associated Press
March 3, 2005, 4:34 PM EST

WASHINGTON -- Connecticut lawmakers are pressing Labor Secretary Elaine Chao for more details about Wal-Mart's alleged violations of child labor laws, including those at 21 Connecticut stores.

In a letter to Chao Thursday, Democratic Sens. Christopher Dodd and Joe Lieberman also questioned the federal government's recent settlement with the retail chain, which requires the agency give Wal-Mart 15 days' notice before any investigation of any store.

"On the surface, this would appear to be an entirely ineffective means to ensure enforcement of our labor laws intended to protect U.S. workers," the lawmakers said in the letter.

They pointed out that child workers could simply be told not to perform illegal tasks on the day of the investigation.

The senators asked Chao to provide details and justification for the agreement's provisions.

Rep. Rosa DeLauro, D-Conn., already has asked the Labor Department to suspend enforcing the 15-day notice policy. She said the warning period could allow the retailer time to cover up evidence of any violations.

Under the settlement Wal-Mart denied the allegations, but agreed to pay a penalty of $135,540.

The alleged violations at 25 stores in Arkansas, Connecticut and New Hampshire between 1998 and 2002, involved 85 teenage workers who used hazardous equipment such as a chain saw, paper balers and fork lifts. Child labor laws prohibit those under 18 from operating hazardous equipment.

Labor Department investigators are reviewing the settlement.

Members of Connecticut's General Assembly have vowed to increase state penalties for companies that violate child labor laws, saying the current fines of up to $300 per offense are too low.

Copyright © 2005, The Associated Press

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Pruitt sentenced for kickbacks

From Staff Reports                                       [back to top]
Posted on Saturday, March 5, 2005

BENTONVILLE — Clifford H. Pruitt Jr., a former Wal-Mart regional vice president now living in Tallahassee, Fla., has been sentenced to 16 months in prison for taking kickback payments.

The sentence was announced Friday by Bob Balfe, U.S. attorney for the Western District of Arkansas.

Pruitt, who once lived in Bentonville, will serve eight of the 16 months in the Bureau of Prisons and the other eight months in home detention. Pruitt will also be on three years’ supervised probation and must pay $56,500 in restitution and a $100 special assessment.

Pruitt pleaded guilty May 28, 2004, to causing to be sent, delivered and moved by the U.S. Postal Service kickback payments to defraud in violation of federal law, a news release from Balfe states.

Pruitt used his position at Wal-Mart to obtain kickbacks from some suppliers to Wal-Mart in his region.

The case was investigated by the FBI.

Copyright © 2001-2004 Arkansas Democrat-Gazette, Inc. All rights reserved. 

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Is FOX Trading News For Favors With Wal-Mart?

Panel Gives FNC A Pass On Saturday night's

(3/5/05)          [back to top]

FOX News Watch, during the "Quick Takes" section, headline #3 was about the Wal-Mart TV network, the television network that is shown only within its stores. Host Eric Burns said, "FOX News channel is on that occasionally... They take some news stories from us, we do some promotions from them."

Burns continued, "This is what TIVO and remotes have led to. Advertisers have gotten more and more creative."

Comment: So has the news, apparently! You might think that a panel of media critics would immediately inquire what kind of promos FOX News provides Wal-Mart in return for its favors, but you'd be wrong. Is it advertising (in which case I'd think the host would have called it such, not "promos") or free publicity which is more in line with the general meaning of "promo?" I immediately thought of a 13-minute, commercial-free interview with Wal-Mart's CEO on Your World With Neil Cavuto last January, which was reported by Melanie.

Since nobody on the panel came up with any questions about this arrangement, we'll do it for them. Is news a trading commodity at FOX News? How much does it go for? Are there other companies, people, entities that have "deals" with FOX for news coverage? In this day of paid-to-shill columnists such as Armstrong Williams and fake White House journalists like Jeff Gannon/James Guckert, it's a real question. And what standards did Wal-Mart apply in deciding which news to carry? The network that gave it the best terms or the one with the best coverage? Finally, did the FOX News Watch panelists really not think of these issues or did tbey prefer not to ask too many questions about their employer? You don't have to be a media expert to wonder.

Reported by ellen at March 7, 2005 01:46 PM | TrackBack

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Arizona Chain Reaction Backs Bill to End Big-Box Subsidies

Mar. 4, 2005            [back to top]

Arizona Chain Reaction (AZCR), a coalition of nearly 600 independent businesses, has launched a campaign of phone calls and emails to urge state lawmakers to enact legislation that would curtail cities' ability to offer tax breaks and subsidies to chain retail developments.

read the rest at Hometown Advantage

Wal-Mart Shoppers: What's the Real Price? (6 Letters)

March 3, 2005              [back to top]

To the Editor:

"Don't Blame Wal-Mart," by Robert B. Reich (Op-Ed, Feb. 28), suggests that the best way to forestall the substantial economic and social problems associated with Wal-Mart is to change federal labor and offshoring laws.

That's a good idea, but since we don't all have a finger on those legislative buttons, our best alternative is to exercise the consumer-citizen choice he describes in favor of the citizen - and say "no" to Wal-Mart in New York.

Mr. Reich says that he loves a deal but bemoans the negative effects that come with it. Some of us prefer not to be tempted.

Now Wal-Mart knows that if it wants to do business here, it does it our way or not at all. And we don't have to rely on the creaky legislative process to accomplish this.

Mark Solomon New York, Feb. 28, 2005

•

To the Editor:

Robert B. Reich misses a critical point. Wal-Mart puts pressure on its suppliers to cut costs to ensure that its customers' needs are filled most "economically."

Consequently, even more of our products and services are declining in quality, poor quality has become acceptable and we've become a throw-away society.

Indeed, small suppliers have been "thrown away" by Wal-Mart when they could cut costs no further.

Waste and low quality, then, join the low wages of most of Wal-Mart's 1.2 million American employees. All three negatively affect our society and economy.

Wal-Mart contributes hugely to the substandard quality of life of millions of our citizens.

Yes, I blame Wal-Mart.

Linda Nottingham Statesboro, Ga., Feb. 28, 2005 The writer is an assistant professor of management at Georgia Southern University.

•

To the Editor:

Re "Don't Blame Wal-Mart," by Robert B. Reich (Op-Ed, Feb. 28):

Our family has been in the retail hardware business for almost 84 years, and in the current atmosphere of shifting buying habits, we are for the first time experiencing the dilemma described by Mr. Reich: how to maintain fair wages and benefits for our staff while keeping our prices competitive.

The price that customers pay is demonstrated in what has been happening around the country: as local retailers disappear from Main Street, customers have to travel farther for their merchandise.

Harry Tarzian Brooklyn, Feb. 28, 2005

•

To the Editor:

I part with Robert B. Reich when he tells us that we need more government regulation to ensure that our values are properly represented in the marketplace.

If Mr. Reich and his Cambridge neighbors had really cared about their local independent bookstore, they would have continued shopping there, willingly paying a few more dollars for their books.

But as he tells us, they didn't. And it's not the government's place to decide that these citizens' values weren't given full accord.

Moreover, when government acts to defend people's values, whose values should it choose? Mr. Reich's, mine or someone else's?

John V. Kjellman Henniker, N.H., Feb. 28, 2005

•

To the Editor:

Robert B. Reich makes a good argument about the Faustian bargain we make as both consumers and workers.

But he does not mention the other side of the equation, that Wal-Mart is also engaged in such a bargain. After all, the natural result of the Wal-Mart strategy would be to eliminate the ability of American workers to afford to shop at these stores.

As a corporation - and as a major economic force - Wal-Mart has a duty to act in a socially responsible manner. I'm sure that if Wal-Mart were to provide the benefits Mr. Reich recommends, its shoppers would be more than happy to pay a few cents more for their purchases.

Tim Brill Ithaca, N.Y., March 1, 2005

•

To the Editor:

Won't the laws and regulations that Robert B. Reich ("Don't Blame Wal-Mart," Op-Ed, Feb. 28) proposes accelerate the movement of American jobs to lower-cost parts of the world?

If so, his solution might worsen this problem.

Lou Kirschbaum Largo, Fla., Feb. 28, 2005

Copyright 2005 The New York Times Company 

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Windsor Wal-Mart applies for certification

Thu, 03 Mar 2005 15:26:37 EST               [back to top]
CBC News

WINDSOR, ONT. - Workers at a Wal-Mart in Windsor, Ont., that ultimately failed to win a first contract after winning certification in the 1990s have again applied to certify a union.

The United Food and Commercial Workers Canada union said an application for certification was filed Tuesday with the Ontario Labour Relations Board. The union said a certification vote could come next week.

In 1996, the Windsor Wal-Mart became the first Wal-Mart in North America to win certification following an organizing drive by the United Steelworkers union. But no contract was ever reached with the retail giant and the union local eventually collapsed.

The UFCW has won certification at two Wal-Marts in Quebec within the last year (one in Jonquière and one in Saint-Hyacinthe) as part of its drive to make in-roads at the chain.

The company made headlines earlier this year when it then announced its decision to close the Jonquière outlet for what it said were financial reasons. The union said the closure was nothing more than an attempt to intimidate employees into rejecting other unionizing efforts at the chain.

Last week, the Quebec Labour Relations Board ordered Wal-Mart to stop harassing and intimidating employees at its store in Ste-Foy, near Quebec City. UFCW Canada is trying to unionize at that location.

Copyright ©2005 Canadian Broadcasting Corporation - All Rights Reserved

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Timeline of world's largest retailer

CBC News Online
Updated February 16, 2005

Wal-Mart Inc., which also operates Sam's Club warehouse-style membership stores, is the largest retailer in the world by revenue. In 2004, the company earned $256.3 billion US in sales. It is also the largest retail employer in the world, with more than 1.5 million workers, most of them in the U.S. But Wal-Mart also has operations in Canada, Argentina, Brazil, China, Germany, South Korea, Mexico, Puerto Rico, and the United Kingdom.

The company first moved into Canada in 1994, buying 122 Woolco stores. Now, Wal-Mart has 256 stores across Canada, and six Sam's Club stores, with a total of about 70,000 full- and part-time employees. The company does not provide Canadian sales figures. Wal-Mart Canada is headquartered in Mississauga, Ont. As of February 2005, two stores were unionized, both in Quebec. The United Food and Commercial Workers Union has filed another dozen applications for union certification in Quebec, Saskatchewan and British Columbia.

A Wal-Mart ad, telling its employees they're the "cornerstone" of the company, shown in front of a Wal-Mart store in Laval, Que. (CP PHOTO/Paul Chiasson).

Timeline:

Feb. 14, 2005: Wal-Mart plans to appeal union certification in Saint Hyacinthe, Que.

Feb. 9, 2005: Wal-Mart announces decision to close Jonquière, Que. store in May 2005.

Jan. 2005: Workers at the Ste-Hyacinthe. store certified as a bargaining unit, after a majority sign membership cards for the United Food and Commercial Workers Union.

Aug. 2004: United Food and Commercial Workers Union Local 503 is certified to represent employees at Jonquière.

2000: Union at Windsor Wal-Mart withdraws after unsuccessful attempt to reach collective agreement, and a legal settlement with the company.

1999: Wal-Mart acquires 229 stores in the United Kingdom. Also becomes largest employer in the world, with 1.1 million workers.

1998: Wal-Mart enters South Korea and Germany.

1997: Wal-Mart becomes biggest employer in the U.S., with 680,000 employees worldwide. Also has its first $100 billion US sales year.

1997: Employees at a Wal-Mart in Windsor become first in North America to earn union certification with a division of the United Steelworkers of America (later a division of the Canadian Autoworkers Union). After lengthy legal and labour relations battles, the union local collapses, in 2000.

1996: Wal-Mart expands to China.

1995: Death of co-founder "Bud" Walton. Company expands to Argentina and Brazil.

1994: Wal-Mart moves into Canada with the purchase of 122 Woolco stores.

Apr. 5, 1992: Death of co-founder Sam Walton. Company expands to Puerto Rico.

1991: First international stores open in Mexico City.

1987: Completion of the Wal-Mart Satellite Network, the largest private satellite communication system in the U.S.

1983: First Sam's Club opens in Oklahoma.

1979: Wal-Mart sales top $1 billion US for the first time. The company has 276 stores, and 21,000 employees.

1977: Wal-Mart buys 16 Mohr-Value stores in the U.S., the company’s first acquisition.

1972: Wal-Mart listed on the New York Stock Exchange.

1970: Wal-Mart becomes a publicly traded company.

1962: First Wal-Mart opens in Rogers, Ark. Founders: Sam Walton and brother Bud Walton.

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Union seeks certification at Wal-Mart store in Windsor, Ont.; vote to follow

Canadian Press          [back to top]
March 2, 2005

WINDSOR, Ont. (CP) - A union is seeking certification to represent Wal-Mart employees at a store in Windsor.

An application for certification was filed Tuesday with the Ontario Labour Relations Board and an employee vote could follow as early as next week, the United Food and Commercial Workers Canada said Wednesday.

Wal-Mart stores in Jonquiere and Saint-Hyacinthe, Que. are the only unionized Wal-Mart stores in North America, but applications to certify 12 others are pending with labour boards in British Columbia, Saskatchewan and Quebec, the union said in a release.

Last Friday, Wal-Mart Canada was ordered by the Quebec Labour Relations Commission to stop intimidating workers who want to form a union.

The commission said Wal-Mart must stop "harassing and intimidating"' three employees at a store in the Quebec City district of Ste-Foy.

© The Canadian Press 2005

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Columbus Commission Votes Against Proposed WalMart

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Wednesday morning Columbus' Planning and Advisory Commission voted not to support a re-zoning request that includes building a Walmart super center off Gateway Road. That recommendation could play a major role when council makes it's final decision.

Walmart is a booming business in Columbus. And if this corporate giant gets its wish, this boom will be taken up in another part of town. But those living there don't want it "We've already heard that there are 4 grocery stores in 2 miles of each other we don't need more groceries," says one area resident. Some commissioners denounced the argument saying the proposal it fits in the city's proposed land use plan of what should be built there, and it's up to Walmart to decide if the location is an economic fit. Commissioner Bradford Dodds says, "from our standpoint a development is a development is a development; the land use is the same as general commercial and that is where we have to focus our attention."

Green space is a concern for many, but so is the small two lane road that it would sit on. The main entrance of the complex would come out on Gateway Road, but it's in the plans to expand Gateway North of the entrance to make a four lane road up to JR Allen, but Gateway would remain two lanes South of the entrance." For some commissioners that's not enough. "I'm sorry, but we are trying to put a square peg in a round hole when it comes to traffic," says Commissioner Bob Crane.

Another fear is that with a large super center other Walmart's around town will close. Rebecca Shepard says, "don't we have enough giant empty buildings in Columbus; what we need to do is redevelop the core of the city." And as some would say, stop the sprawl.

This site to be rezoned has been vacant for roughly 20 years. City council will decide whether or not it stays stay that way.

All content © Copyright 2001 - 2005 WorldNow and WTVM, a Raycom Media station. 

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Wal-Mart Foes Join In Fight Over Court Files

Justin Scheck               [back to top]
The Recorder
02-28-2005

A small Berkeley newspaper may soon have some company in its attempt to pry open court records in a wage-and-hour class action against Wal-Mart.

In a tentative ruling earlier this month, Alameda County Judge Ronald Sabraw indicated he'll place a permanent seal on some discovery documents and materials related to various motions in the case, even though some of the documents were posted online in past appeal court proceedings.

The Berkeley Daily Planet is represented by M. Suzanne Murphy, a partner at Oakland's Weinberg Roger & Rosenfeld and a former sealed records-rule specialist with the Judicial Council of California.

If Sabraw makes his tentative ruling final, Murphy said, she expects to bring outside lawyers and additional media outlets into the case.

Mary Duffy Carolan, a media law specialist with Davis Wright Tremaine, said Sabraw's tentative ruling seems to err on the side of secrecy.

"The specific Rule of Court relied on by the court in its tentative ruling is inconsistent with the public's First Amendment right of access," she wrote in an e-mail Friday.

Carolan isn't involved in the case and says she doesn't know Wal-Mart's motives. But, she said, "We do find, oftentimes, that when parties are trying to seal documents, it's because they're damning or embarrassing, not because they sit within a trade secrets definition."

"It's a tremendously important and closely watched case," said Karl Olson, a media law specialist and partner with Levy, Ram & Olson who frequently represents news outlets seeking access to government and court records. He is concerned that Sabraw's definition of trade secrets is overly broad and unnecessarily prevents public scrutiny.

"The public has an overwhelming interest in seeing what the evidence was that's been presented in the case, which has been up and down to the court of appeal already," added Olson, who has represented The Recorder in other cases. "It's another example of a litigant taking a very aggressive approach to sealing and calling everything a trade secret when it's not."

John Nadolenco, a partner with Mayer, Brown, Rowe & Maw in Los Angeles who represents Wal-Mart, referred all comments to a company spokeswoman. She did not return calls by press time.

The fight over sealed documents comes in Savaglio v. Wal-Mart, C-835687-7, in which a class of plaintiffs represented by Jessica Grant, a partner with the Furth Firm in San Francisco, alleges that Wal-Mart has failed to pay overtime wages.

While Grant continues to litigate the case -- she was in Arkansas deposing Wal-Mart executives last week -- Murphy's firm, one of the Bay Area's most prominent union-side firms, argues that Wal-Mart is trying to hide embarrassing records from the public by labeling them trade secrets.

Murphy said she and her partners began looking at the matter after hearing that Wal-Mart's filings might give insight into employers' attempts to change state lunch-break regulations.

"We got involved last summer, in July of 2004. There were rumors going around the labor and employment bar that employers had approached the [Division of Labor Standards Enforcement]," she said. "The whole records issue came up because we were just trying to determine what was going on in the case."

The lunch-break fight ended up coming to a head in December, when DLSE proposed a rule that would have curbed lunch-break litigation. The rule change was eventually dropped.

But, Murphy said, her firm felt there was no basis for the records to be sealed. And the lawyers think the material could shed light on the business and political strategies used by the labor and employment bar's prime target.

"This case is really sui generis in the scheme of things," she said. "It has the combination of public interest and the rights of workers."

Becky O'Malley, a Daily Planet co-owner and editor, said the paper became involved after a reporter heard from Murphy that the Wal-Mart documents were sealed. "We're a paper. We want to know what's going on in the courts," she said.

Murphy was glad to take the paper as a client. "The benefit of having a media client in this contest is that we don't get slammed constantly with union bashing," she said.

Murphy declined to say whether the Planet was paying her fees, but said she expects to recover fees if she prevails.

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Wal-Mart ordered to stop harassing workers in Quebec 

Fri, 25 Feb 2005 18:53:33 EST
CBC News                                      [back to top]

MONTREAL - The Quebec Labour Relations Board has ordered Wal-Mart Canada to stop intimidating workers who want to form a union.

The board's ruling cited efforts to "harass and intimidate" three employees at a Sainte-Foy store outside Quebec City.

The ruling says a Wal-Mart manager demanded one cashier give him the names of union sympathizers.

Louis Bolduc of the United Food and Commercial Workers Union, which is trying to organize workers at the store, said Wal-Mart was using unfair tactics.

"[Getting] the employees in an office with two top managers of the store, asking the employees about the organizing of the union," Bolduc said.

"'How many cards? Are you involved?' You shouldn't do that. If you do that, something is going to happen to you.'"

This is the second time Wal-Mart has been reprimanded for trying to intimidate workers in Quebec, Bolduc said.

Wal-Mart has been ordered to stop intimidating employees and to display the ruling in the store's lunchroom for 30 days.

Andrew Pelletier, a Wal-Mart spokesman, said the company will comply with the commission's ruling, but denied that Wal-Mart intimidated employees.

"Our corporate culture is based on open communication and the empowerment of people," he told the Canadian Press. "We believe people are empowered to make their own decisions."

Earlier this month, the company announced it would close its store in Jonquiere, Que. Last August, it became the only unionized Wal-Mart in North America when it won certification.

The company said it was closing the Jonquiere outlet because of poor financial performance.

Last month, UFCW Canada won certification at another Wal-Mart store, in Saint-Hyacinthe, Que. A contract agreement has not been reached at that store.

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Quebec labour commission says Wal-Mart intimidated workers who wanted union

NELSON WYATT            [back to top]

MONTREAL (CP) - Wal-Mart Canada was ordered Friday by the Quebec Labour Relations Commission to stop intimidating workers who want to form a union.

The commission said in a ruling Wal-Mart must stop "harassing and intimidating" three employees at a store in the Quebec City district of Ste-Foy.

The ruling said one cashier was intimidated behind closed doors by a manager who demanded the names of union sympathizers. Another was threatened with a bad evaluation.

Wal-Mart was ordered to post the decision in the store.

Andrew Pelletier, a Wal-Mart spokesman, said the chain accepts the commission's ruling and will comply.

"We don't agree with the decision but we are going to comply with it because we feel it is important to move forward in Ste-Foy and we look forward to moving forward in a peaceful manner," he said in an interview from Toronto.

He denied Wal-Mart intimidated employees.

"Our corporate culture is based on open communication and the empowerment of people," he said. "We believe people are empowered to make their own decisions."

He described the labour commission's judgment as "not a particularly severe ruling" that the company would not appeal.

Louis Bolduc, a spokesman for the United Food and Commercial Workers union, hailed the commission's decision.

"It's good news," he said, vowing "Ste-Foy will continue" its efforts to unionize.

Bolduc said the company tactics cited in the ruling are not unusual.

"There's a culture of that at Wal-Mart," he said, noting some workers had been rattled by the news that a Wal-Mart store in Saguenay that had received union accreditation late last year would close in May.

But he said the ruling will boost the spirits of those seeking accreditation.

"We're happy that the labour board recognized the intimidation that Wal-Mart is doing. We're not happy that Wal-Mart is doing intimidation.

"We hope that Wal-Mart will one day realize that people have the right to join a union."

The United Food and Commercial Workers Union has been trying to gain a foothold in the discount store's outlets.

The Saguenay store, 250 kilometres north of Quebec City, gained union certification but the company said the branch would close in May because it was not making money. Workers there were in negotiations for a first contract at the time.

Other attempts to unionize are being made in several other provinces.

© The Canadian Press, 2005

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Chastened Wal-Mart abandons 'bully' tactics

Says urban invasion campaign all wrong

By BARRIE MCKENNA AND PETER KENNEDY                 [back to top]
Friday, February 25, 2005 Updated at 4:38 PM EST

WASHINGTON and VANCOUVER -- Wal-Mart's customer-sucking suburban superstores have long been blamed for wrecking small towns.

But suddenly the company has run smack into a new and more formidable foe: Big City North America.

Facing a storm of protest from a powerful coalition of small-business owners and labour groups, a real estate developer this week walked away from a plan to give Wal-Mart its first toehold in New York City. It marked the latest in a series of humiliating defeats for the world's largest retailer in its conquest of the last holdout corner of the North American retail landscape.

Executives of Bentonville, Ark.-based Wal-Mart Stores Inc. now openly admit they went about their urban invasion all wrong, particularly in California, where people in several communities voted to keep it out in a referendum the retailer sought.

"I think we came across as a bully who would get their way regardless," Wal-Mart chief executive officer Lee Scott told The Washington Post earlier this month. "Our size causes us, when we do something inappropriate, which is usually done out of stupidity, to come across as being done out of arrogance. And people just won't stand arrogance."

So now the company is showing a new kinder, gentler face to woo urban shoppers and decision makers -- part of a massive image-boosting campaign launched in January.

At a public meeting Wednesday night in Vancouver, Wal-Mart executives showed off plans for what they hope will be their first store in the city. The U.S. retail giant is seeking the green light for a 128,000-square-foot energy-efficient store, featuring wind turbines, geothermal heating and climate-controlled skylights. Outside, Wal-Mart is promising to mitigate noise by laying down sound-absorbing asphalt, and a grove of 180 dogwood trees.

"They have to get into major population centres like Vancouver, New York and Dallas because they are already well served in outlying areas," said Ulysses Yannas, a retail analyst at Buckman Buckman & Reid in New York.

In Washington, D.C., Wal-Mart has hired a former top aide to Mayor Anthony Williams to help it win approval for its first store there. Instead of bypassing city hall, the company is wooing insiders.

And Wal-Mart isn't giving up on California either. At a town hall-style public meeting in Los Angeles this week, Wal-Mart's Mr. Scott faced off against his critics and offered up the lure of lower grocery prices for shoppers if they let the company in. Californians, he said, shouldn't have to pay 20 to 40 per cent more than other Americans at the supermarket.

While Wal-Mart now rules suburbia and small towns across Canada and the United States, many cities remain a black hole.

"They've saturated that market and the next virgin territory is Urban America," explained Nelson Lichtenstein, a labour historian at the University of California in Santa Barbara and author of the soon-to-be-released book, Wal-Mart: Template for 21st Century Capitalism.

But Mr. Lichtenstein pointed out that in tackling urban areas, Wal-Mart is moving a long way from its roots near the Interstate off-ramps of the rural, staunchly anti-union and deeply religious South.

"Wal-Mart doesn't work if you can't drive a truck to it," he said.

Just a handful of its 4,170 stores are in urban locations. Wal-Mart, for example, has 30 stores in British Columbia, but none in Vancouver, nearly two years after its first bid to build there failed. Of the 131 stores listed on the firm's website in Ontario and Quebec, just 12 are located in Toronto and Montreal.

"One thing Wal-Mart has learned across North America is that if you lose one year, you just come back a couple of years later and do it again," said Vancouver City Councillor Anne Roberts.

***

Wal-Mart's Downtown Blues

NEW YORK: Wal-Mart Stores Inc. is better known for its expansion battles with merchants in small towns, but lately the battleground has shifted to city centres, where many analysts feel the company's best hopes for growth lie. Yesterday, a real estate developer scrapped plans to build New York's first Wal-Mart. Opposition was led by small business owners such as shoe-store operator Lenny Karp (above) and by labour leaders who cited the firm's decision to close a store in Quebec as evidence of an anti-union bias.

VANCOUVER: Using green tactics on the next battle front

Wal-Mart is fighting criticism of the environmental impact of its proposed first big-box downtown store by pitching an environmentally advanced building with the following features:

Climate-controlling skylights

Ground source heating and cooling (geothermal)

Accessibility to public transit including existing and future transit facilities

A reflective roof membrane to reduce overheating

Storm-water management by retaining and redirecting storm water into the ground while naturally filtering it

Power-generating wind turbines to provide power to mechanical systems, including geothermal heating and cooling systems

© Copyright 2005 Bell Globemedia Publishing Inc. All Rights Reserved.

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Wal-Mart attacks critics

Reuters                      [back to top]

LOS ANGELES – The head of Wal-Mart Stores went on the offensive on Wednesday against critics who say the world’s largest retailer pays its workers too little and does not provide adequate health benefits.

In a heated speech to California business leaders, Wal-Mart chief executive Lee Scott said labour unions like the United Food and Commercial Workers and higher-priced retailers were operating out of self-interest, not public interest, when they complained about his company.

“There are some who say that Wal-Mart’s wages and benefits have some kind of negative impact on wages across the board,” Scott said at a luncheon sponsored by Town Hall Los Angeles. “We believe that’s just wrong – just dead wrong.”

Scott’s comments come as Bentonville, Arkansas-based Wal-Mart is in the midst of a national advertising campaign to burnish an image tarnished by claims of worker discrimination and anti-union practices.

Public resistance to Wal-Mart’s expansion has been particularly strong in California, where the retailer’s campaign to improve its image began last year.

Wal-Mart has plans to open 25 new stores in California, Scott said, arguing they will help lower grocery prices statewide by forcing supermarket chains with union employees to compete with them.

Scott also defended Wal-Mart’s wage practices, saying it is right to pay its workers less than those at other big US companies such as Ford Motor.

“A single Ford worker might operate dozens of computer-controlled robots that assemble a car,” Scott said. “In a Wal-Mart store, hundreds of associates are helping customers find what they need and check out fast.”

He also addressed claims that Wal-Mart does not offer adequate health benefits to its employees, saying premiums for workers, including part-timers, start at under $40 a month for individuals and under $155 a month for families.

Scott added, however, that both the government and individual consumers – not just employers – should play a role in improving health care coverage options.

“You can’t get something for nothing,” he said.

Scott conceded Wal-Mart had made mistakes, particularly in the way it approached opening a store in the Los Angeles suburb of Inglewood last year. Residents there rejected plans for a proposed supercentre, which, unlike traditional Wal-Mart stores, includes full-line grocery departments.

“We decided to move through a process that didn’t go through City Hall. We paid a price for that,” Scott said. “It comes across not as good business, it comes across as arrogance.”

But Scott defended buying cheap goods from places like Bangladesh where factory workers earn very little, one of the ways Wal-Mart is able to keep its prices so low.

“I’ve been in the factories in Bangladesh,” Scott said. “It’s not the life you want to lead, it’s not the life I want to lead. But it’s a life that is very much a step up from the life that those people would otherwise lead.”

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Retail union president says Wal-Mart not welcome

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Stuart Appelbaum, president of the Retail, Wholesale and Department Store union, said developers should "hesitate to consider Wal-Mart in any future plans." His comments on Thursday come one day after the superstore withdrew plans to open an outlet in Rego Park, Queens on a 132,000-square-foot site owned by Vornado Realty Inc.

Wal-Mart's decision came one week after BJ's Wholesale Club pulled its application to open a superstore in the East Bronx. BJ's zoning application, which was to be voted on by the City Council, had been expected to face rejection by the council.

In a statement on Wednesday, Wal-Mart said it was "interested in opening stores in New York City" and was continuing "to explore a number of possible sites throughout the five boroughs."

Mr. Appelbaum warned that Wal-Mart would face opposition "wherever they attempt to open." He also attacked the giant retailers labor practices such as its low wages and benefits. "Working families in New York simply cannot afford the high cost that comes with Wal-Mart's promise of low prices," he said in a statement.

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Wal-Mart can't shake its little town blues; NYC plan foiled

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NEW YORK (AP) — A real estate developer scrapped plans to build the city's first Wal-Mart (WMT) store amid intense pressure from residents and union leaders. The decision, announced by city officials Thursday, is a blow to the retail giant, which has sought for years to move into the lucrative New York City market.

The company had announced Dec. 6 that it would open a new store in the Rego Park neighborhood of Queens.

Wal-Mart Stores spokeswoman Mia Masten said Wednesday the company had never signed a deal with the developer, Vornado Realty Trust (VNO), for the 132,000-square-foot space. She said Wal-Mart is still interested in exploring other locations in the city.

Vornado spokeswoman Roann Kulakoss declined to comment Thursday.

Councilwoman Melinda Katz, head of the City Council Land Use Committee, said she received a call on Wednesday from Vornado's attorney that it had made the decision Tuesday night, and that it is looking for other tenants.

Katz said the deal may have fallen through because of Wal-Mart's track record on labor issues.

"Vornado may very well have a project that could be a good project in the area, and they wanted to go forward based on the substance as opposed to getting caught up in the issues that Wal-Mart seems to bring to the table," she said.

Opponents formed coalitions to block the store immediately after Wal-Mart, the world's largest retailer, announced plans to expand into New York.

Small businesses feared Wal-Mart would drive many retailers out and residents near the site raised concerns about traffic and parking at the proposed site. Union leaders cited a list of labor offenses against the company, including a recent settlement of allegations that Wal-Mart violated child labor laws and the company's decision to close a Quebec store when workers moved to unionize.

Meanwhile, in California, Wal-Mart Chief Executive H. Lee Scott Jr. said Wednesday that the company is renewing efforts to expand its Supercenter stores there. Public outcry had stalled the company's plans there last year.

Scott said that although Wal-Mart's $1 million campaign to gain voter approval for superstore projects in the Los Angeles and San Diego areas failed, it is moving ahead with plans to open 25 new stores in the state this year.

"We're not going to lay down," he said. "We've got nothing to apologize for."

Analysts have said that Wal-Mart needs to tap into the New York City and Southern California markets to make up for slow growth elsewhere in recent years.

Copyright 2005 The Associated Press. All rights reserved

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Jury awards $7.5 million in Wal-Mart discrimination case

NY Newsday.com                               [back to top]
February 24, 2005, 3:03 PM EST

NEW YORK (AP) _ A federal jury has ordered Wal-Mart Stores to pay a Long Island man $7.5 million after ruling that the retail behemoth discriminated against the man because he has cerebral palsy.

Patrick Brady, 21, was hired for a job in the Wal-Mart pharmacy department in Centereach during the summer of 2002. After one day in the pharmacy, he was reassigned to other responsibilities, including collecting garbage and shopping carts from the parking lot.

The jury in U.S. District Court in Central Islip deliberated one day before ruling on Wednesday that Brady was discriminated against when he was transferred. It also found that Brady was asked impermissible pre-employment questions about his disability, said his lawyer, Douglas H. Wigdor.

Brady, who now works in a Centereach supermarket bagging groceries, said in a statement that he was "very happy the jury believed in me."

The jury award includes $5 million in punitive damages, which Wigdor said was likely to be reduced to $600,000 since federal law limits the amount that can be awarded for punitive damages. The jury also awarded Mr. Brady $2.5 million in compensatory damages, Wigdor said.

Christi Gallagher, a spokesman for the Bentonville, Ark.-based Wal-Mart, said in a statement that the company would appeal.

"We appreciate the service of the jurors but disagree with their decision," Gallagher said. "We feel very strongly that Mr. Brady did not suffer discrimination in our store."

Copyright © 2005, The Associated Press

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CEO Takes His Case to California

He says the retailer erred in its aggressive pursuit of the crucial market but won't back down.

By Nancy Cleeland and Debora Vrana Times Staff Writers       [back to top]
February 24, 2005

With its California expansion plans stalled, Wal-Mart Stores Inc. dispatched its top executive to Los Angeles on Wednesday to plead the case for the world's largest company.

Among his messages: We're not backing down.

Chief Executive H. Lee Scott Jr. acknowledged to 500 business leaders at a Town Hall Los Angeles luncheon that Wal-Mart had made mistakes in trying to expand quickly in California, its most important market for growth. The company's efforts to build Supercenters — combination grocery and discount stores — have faced hostile city ordinances, strong community opposition and complaints that they pay too little and run competitors out of business.

But Scott said Wal-Mart was undeterred. If critics want to take the company on, "they need to bring their lunch, because we're not going to lay down," he said in an interview. "We've got nothing to apologize for."

Wal-Mart said three years ago that it would build 40 Supercenters in California by 2008. Only three have opened so far. Scott said Wal-Mart would open 25 stores in California this year, including one in Los Angeles, but declined to say how many, if any, would be Supercenters. The retailer has 180 of its traditional discount stores in the state.

Analysts said Wal-Mart couldn't afford to quit its expansion in California. The company's once-meteoric growth has slowed in recent years as it moved from the rural South into urban areas and the West, and some international markets, including China, have been less welcoming than expected.

Given that, seriously tapping into California's huge pool of consumers is essential for Wal-Mart's health, said retail consultant Burt P. Flickinger, who follows the company closely.

"Southern California is their most important market in the world right now," he said. "Lee Scott really should have been out there a long time ago."

Scott's image-building appearance in Los Angeles was part of a nationwide public relations campaign launched last month with full-page ads in prominent newspapers, television spots and sponsorships of National Public Radio programs. The campaign portrays the company as a benevolent employer and good citizen that contributes enormously to local and state tax bases.

In his speech, Scott said Wal-Mart had saved consumers billions of dollars a year by cutting prices, while still paying wages comparable to those of most other retailers. He also said a high percentage of its workers worked full time and enjoyed health benefits.

The timing of his remarks was in some ways unfortunate. As he spoke in Los Angeles, Alabama announced that Wal-Mart employees used state medical benefits at a higher rate than those from other companies, joining a handful of states that have identified the retailer as the biggest drain on public health costs.

That was the latest bit of unflattering publicity. Last month, the Labor Department said it found underage workers operating heavy equipment in some stores. It was later disclosed that the federal agency had agreed to give the Bentonville, Ark.-based company 15-day advance notice of pending citations and a chance to fix them. That deal is being investigated by the department's inspector general.

Wal-Mart's low prices were blamed for this week's bankruptcy filing by Southern grocery chain Winn-Dixie Stores Inc. In addition, the retail giant faces a class-action lawsuit claiming that it systematically discriminated against women and federal charges that it employed illegal immigrants as contracted janitors and paid them less than minimum wage.

And in a stinging symbolic letdown, Wal-Mart this week fell from the top ranking in Fortune magazine's survey of the nation's most admired corporations, replaced by Dell Inc.

Scott said Wal-Mart — which had $256 billion in sales last year and is the nation's largest employer — had made some missteps. In particular, he said last year's company-sponsored ballot initiative to allow a Supercenter in Inglewood, which failed, "came across as arrogance" because it would have bypassed the city's planning process.

And Wal-Mart has been unfairly maligned simply because it's so big, Scott said. Comparisons with past leading national employers, such as General Motors Corp., are unfair, he said, because retailing in general pays less than manufacturing.

He blamed much of the company's image problems on union activists trying to protect high-paying jobs in the grocery industry, and said if they had their way, prices would rise.

"I'm afraid that their gain would come at the expense of average Americans who need to improve their standard of living," Scott said.

The barrage of criticism, he said, had hurt employee morale.

"I decided to speak up because of our associates," he said. "They want to know Lee Scott has the courage to speak up for them."

On that note, Scott left for a tour of a Wal-Mart store in Panorama City, where dozens of employees waited for handshakes and photos. "He's here, he's here," they exclaimed as Scott entered.

Customers, however, were more interested in bargains.

Leslie Sanchez of Glendale, shopping with her 5-year-old daughter, Denise, carefully checked out a girl's swimsuit and barely looked up as Scott walked by. She had driven to the Panorama City store for the first time Wednesday because she heard the bargains were good and found it to be true.

"I'll come again," she said.

That's just what Scott wants to hear.

"If we continue to be a better company," he said, "I think the citizens of California are going to find it easier to like us."

Copyright 2005 Los Angeles Times

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Developer Drops Plan for City's First Wal-Mart

By STEVEN GREENHOUSE             [back to top]
February 24, 2005

Facing intense opposition, a large real estate developer has dropped its plans to include a Wal-Mart store in a Queens shopping complex, thwarting Wal-Mart's plan to open its first store in New York City, city officials and real estate executives said yesterday.

The decision by the developer, Vornado Realty Trust, is a blow to Wal-Mart, the world's largest retailer, and comes after company officials said that New York City was an important new frontier in which Wal-Mart was eager to expand.

A Wal-Mart spokeswoman said the company was still exploring other sites in the city, but the possibility that the company would open a 132,000-square-foot store in Queens had immediately stirred a storm of opposition by neighborhood, labor and environmental groups as well as small businesses. Wal-Mart also faced opposition from many City Council members and several members of Congress.

Labor unions fought Wal-Mart with a special intensity because they believe its wage levels and benefits are pulling down standards for workers through the United States.

Melinda Katz, chairwoman of the Council's Land Use Committee, said a Vornado representative informed her yesterday that Vornado was no longer negotiating with Wal-Mart for it to be part of the mall planned for Rego Park, Queens, in 2008.

"I think they just decided it's not worth the complications of having Wal-Mart," Ms. Katz said. "The idea of Wal-Mart was overshadowing what could very well be a good project."

Roanne Kulakoff, a Vornado spokeswoman, declined to comment, except to say there was never a formal deal between Vornado and Wal-Mart. But one executive briefed on the talks between Vornado and Wal-Mart said Vornado had concluded that keeping Wal-Mart would jeopardize the city's approval of a large, ambitious project that included other stores and two 25-story apartment towers.

"There were people who felt it was a major risk for the project," said the executive, who asked not to be identified in order not to anger either side.

The executive said Vornado had originally hoped that city planning officials would approve the Rego Park project before it before it became publicly known that Wal-Mart was involved. But once Wal-Mart's participation became public, the opposition mushroomed, and the fight was shaping up to be the biggest battle against a single store in the city's history.

Small-business advocates declared victory after the decision was made public, but predicted that the battle would resume in other neighborhoods. "Vornado saw the writing on the wall and responded the way a developer needs to when he knows he's holding a losing hand," said Richard Lipsky, a spokesman for the Neighborhood Retail Alliance, an anti-Wal-Mart coalition in New York. "We stopped Wal-Mart this time, but they are going to continue their efforts to open in New York and we will be sure to meet that with significant opposition wherever else they try to locate."

Mia Masten, Wal-Mart's director of corporate affairs for the Eastern region, sought to play down yesterday's developments. She noted that Vornado and Wal-Mart had never signed a formal deal to include Wal-Mart in the complex, planned to be built near the intersection of Queens Boulevard and the Long Island Expressway. Nonetheless, city planning officials and City Council members said Vornado had told them that it wanted to include Wal-Mart.

"We never had a deal," Ms. Masten said, adding that Wal-Mart remains interested in opening stores in New York City. "In fact, we continue to explore a number of possible sites throughout the five boroughs," she said. "Until we have an executed agreement for a specific site, we will not comment on any ongoing negotiations."

Ms. Masten declined to say whether Vornado had dropped Wal-Mart from the project or whether Wal-Mart had pulled out voluntarily. Wal-Mart's opponents said that Vornado might have been swayed in part by a unanimous vote of the City Council's Land Use Committee two weeks ago to block a B.J.'s Wholesale Club in the Bronx. In the face of intense lobbying by environmental, community and labor groups, the committee overruled the local planning board and the borough president.

Several shoppers interviewed yesterday in Rego Park said they were disappointed that a Wal-Mart would not be coming to the neighborhood, noting that many Queens residents now travel to Long Island to take advantage of the store's low prices.

"It would've been good if we had a Wal-Mart nearby because then we wouldn't have to travel outside the area," said Rolando Sands, 21, a soft drink deliverer from Jamaica, Queens. "We'd be able to keep the money in the Queens community instead of Long Island."

Corinth King, 45, a traffic enforcement agent from Rego Park, said she had been looking forward to the store's variety. "They have a lot of good sales," she said. "I like it for things for the bathroom and the kitchen. They have a wide variety. I'm going to miss it."

But shoppers did not form an organized group to support Wal-Mart.

Helen Sears, the City Council member representing Rego Park, had warned Wal-Mart, which has several stores in the suburbs surrounding the city, that to win approval in the city itself, it needed to improve its wages, health benefits and pensions and end its vehement stance against unions.

"I am hopeful that if Wal-Mart attempts to locate another site, whether in Queens or Brooklyn, the Bronx, Manhattan or Staten Island, that its officials work tirelessly to improve workplace benefits and conditions so that New York City will welcome it with open arms," Ms. Sears said. "Until then, we can only offer our backs."

Small-business owners had voiced fears that opening a Wal-Mart in Queens would push hardware stores, shoe stores and many clothing shops out of business, as has been the case in many small towns where Wal-Mart is dominant. Company officials said the store would bring low prices to New Yorkers and would create more than 300 jobs.

City Hall officials declined yesterday to discuss the Wal-Mart matter. Mayor Michael R. Bloomberg appeared at first to back the project, saying that it was wrong to simply say that warehouse-type stores should not be allowed in the city. But his aides later said that it was not at all clear that he would ultimately support the project.

Charles V. Bagli and Colin Moynihan contributed reporting for this article.

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Wal-Mart Is Found Liable in Bias Against Disabled Man

By CONSTANCE L. HAYS      [back to top]
February 24, 2005 

federal jury found yesterday that Wal-Mart Stores had discriminated against a disabled Long Island man who briefly held a job at the company's Centereach, N.Y., store, and ordered the company to pay him $7.5 million in damages.

The plaintiff, Patrick Brady, 21 years old, has cerebral palsy. He applied for a job in the Wal-Mart pharmacy department in the summer of 2002 and was hired. He said he quit not long after he was reassigned to other responsibilities, including collecting garbage and shopping carts from the parking lot.

The award includes $5 million in punitive damages, Mr. Brady's lawyer said, which is likely to be reduced to $600,000 since federal law limits the amount that can be awarded for punitive damages. The jury also awarded Mr. Brady $2.5 million in compensatory damages, which has no similar limit, said the lawyer, Douglas H. Wigdor. "The jury was giving an award that was meant to send a message to Wal-Mart," he said.

Last night, Mr. Brady said in a statement that he was "very happy the jury believed in me," and added: "I hope that Wal-Mart now understands that they can't get away with treating people with disabilities like second-class citizens."

His lawyer said Mr. Brady had celebrated the verdict and then showed up for his shift at a Stop & Shop in Centereach, where his responsibilities include bagging groceries at the front of the store.

Mr. Brady asserted in a lawsuit that Wal-Mart had discriminated against him because of his disability, violated the Americans with Disabilities Act with "a hostile work environment" and other obstacles, and ignored the requirements of a nationwide consent decree it signed as part of a $6.8 million settlement with the Equal Employment Opportunity Commission in late 2001 that closed more than a dozen similar cases from around the country.

"We appreciate the service of the jurors but disagree with their decision," a Wal-Mart spokeswoman, Christi Gallagher, said in a statement. "We feel very strongly that Mr. Brady did not suffer discrimination in our store." She added that the company plans to appeal, and "we are optimistic that the award will be substantially reduced or eliminated altogether."

Mr. Brady's childhood was one long struggle, with surgery for his eyes and legs after cerebral palsy damaged them. Painful stretches of rehabilitation followed. His mother, Karen Brady, who testified on his behalf during the 10-day trial before Judge James Orenstein of United States District Court for the Eastern District of New York, said in a recent interview that Wal-Mart's decision to reassign her son was baseless.

"He can read and he can match a name," she said. "There was no reason for this. He always worked so hard at everything." In the aftermath of his Wal-Mart experience, she added, he wilted before her eyes, winding up in the care of a psychiatrist for the first time in his life. His feeling was, she said, "Why work so hard at school, and then have them tell me I'm not good enough?"

Mr. Brady's lawsuit named the manager of the Centereach store, James Bowen, and the head pharmacist, Yem Hong Chin, as well as Wal-Mart as defendants. Along with Wal-Mart, Ms. Chin was found liable by the jury.

Wal-Mart has been on a public-relations campaign recently, rebutting critics who say its employment practices hurt women, immigrants and others. Company executives, including the chief executive, H. Lee Scott Jr., have made public statements about the benefits of working at Wal-Mart. Last month, the chain took out full-page ads in scores of newspapers around the country, stating that the jobs and pay it offers are among the best anywhere. Television ads that feature Wal-Mart workers talking about their satisfying careers have been shown since 2003.

At the company's shareholder meeting in June, Wal-Mart executives highlighted an employee with cerebral palsy for his dedication to his job cleaning bathrooms inside the stores.

The commission has another lawsuit pending on behalf of a man with cerebral palsy who was rejected for a job in the company's Richmond, Mo., store. "It's disappointing and unacceptable for an employer as large and sophisticated as Wal-Mart to shun qualified job applicants because they're disabled," Lynn Bruner, the agency's district director in St. Louis, said in announcing the lawsuit.

People with disabilities are not supposed to be questioned about them when they apply for jobs, according to New York and federal laws. But Mr. Brady said he was questioned by Wal-Mart managers about his ability to do the job before he was hired. They also questioned him about medications he was taking and asked for his medical history, Mr. Wigdor said. That, too, would violate the law, he said.

In the 2001 consent decree, Wal-Mart agreed to provide sensitivity training to all of its employees and pledged not to use what it called "the matrix," a series of questions about an applicant's capacity to do a job with or without "reasonable accommodation," which is information that would reveal whether or not they were disabled.

In the past, such questions had been used to exclude people who were deaf, diabetic, who used a wheelchair or were otherwise disabled, said Mary Jo O'Neill, a regional lawyer for the commission in Phoenix, who led the legal team that produced the consent decree.

"That was the epidemic," she said. "That was the way disabled people were kept out of the system."

Ms. O'Neill said she had not received reports of widespread lack of follow-through with the requirements of the nationwide consent decree, but noted that Wal-Mart's rapid growth created certain issues for the retailer.

"It's a company that grew too fast, too soon," she said. "It grew really, really fast, and historically they haven't put enough resources into their equal-employment opportunity program." That approach, she added, is "pennywise and pound foolish."

Copyright 2005 The New York Times 

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Wal-Mart's next battle: in the Big Apple A proposal for a store in Queens could produce the biggest showdown yet with the megastore's opponents

By Alexandra Marks | Staff writer           [back to top]       
The Christian Science Monitor
February 24, 2005

[UPDATE: Since this story was written, developers have dropped plans to build a Wal-Mart at the proposed Queens site. But Wal-Mart says it still would like to open a store in New York City and will continue looking for a new site.]

NEW YORK - Wal-Mart, once no more than a rural dime store, is now hoping to cap its global retail empire by taking on the nation's largest untapped metropolis: New York City.

While no formal agreements yet exist, word that the controversial low-cost retailer is eyeing a site in Queens has already generated such a backlash that some analysts say the fight for approval in Rego Park will be the largest and most symbolic showdown yet between the megastore and its union opponents.

"If there ever was a part of the country where people wouldn't tolerate [Wal-Mart,] it would be a city like New York where there's a strong labor movement," says Kate Bronfenbrenner, a labor economist at Cornell University in Ithaca, N.Y. "People there fight back when they smell a labor rat."

The battle for the Big Apple will also prove to be a test case for one of several new tactics that opponents are employing from here to Montana to hold big-box employers like Wal-Mart accountable to the community. They include requiring companies to provide health insurance, as in a proposal in New York; establishing so-called living wage laws, which is under consideration in Chicago; and limiting the size of such stores, which some communities are attempting to do in Vermont.

"A second-generation response to the big-box sector has emerged over the last year or so," says Paul Sonn, associate counsel at the Brennan Center for Justice at the New York University School of Law. "The aim is to level the playing field so that if Wal-Mart does come to New York, it will provide the same benefits that other responsible retail employers like the supermarkets are paying."

Wal-Mart and its supporters say the retailer already offers good benefits, paying almost double the minimum wage and providing some health and dental insurance, as well as a 401(k) retirement plan to eligible employees.

They believe the unions have targeted the company because it is now the country's largest employer with 1.2 million workers. And it's proudly nonunion, which they say allows it to offer bargains, helping families and communities by saving them money - at the same time that the stores increase the tax base.

"What's at issue here is not whether a particular union has been able to organize or collect dues from our workforce," says Daphne Moore, director of community affairs for Wal-Mart in Bentonville, Ark. "It's whether consumers have a choice of where they shop."

But opponents argue that Wal-Mart's wages are lower than those of other retailers such as department stores and supermarkets. And they contend that its controversial labor practices, from alleged violations of child-labor laws to lower wages to minimal health insurance, actually cost communities money.

Studies have shown that Wal-Mart employees are more likely than other retail workers to end up on food stamps and Medicaid and their children in state-sponsored health-insurance programs. Plus, they argue, Wal-Mart drives out other retailers and replaces good jobs with lower-paid ones, undermining the very fabric of the American middle class that the company purports to serve.

"As Wal-Mart goes into larger urban areas, the opposition has been much stronger than in rural areas because they're more directly competing against unionized grocers and larger numbers of successful small businesses," says Ken Jacobs of the University of California at the Berkeley Center for Labor Research and Education.

In New York, the powerful Central Labor Council, which represents more than 400 unions across the trades, has already made it clear it opposes Wal-Mart's arrival. President Brian McLaughlin says a Wal-Mart in Queens "will prove to be an economic disaster for our entire city."

He has lots of support from the nonunion sector as well. Small retailers in Rego Park like Sayed Afaq, who owns B&R Photo, Electronic and Wireless, are worried that the arrival of the megastore will be the "final nail in the coffin" for his shop. His business was already cut in half by the development of a mall across the street two years ago.

"Everybody knows Wal-Mart is the biggest company in the world, and we obviously can't compete with them in terms of prices," says Mr. Afaq. "We've already reduced our prices, but the rents are going higher. I fairly believe that if Wal-Mart is here, we will definitely be going out of business sooner rather than later because we are just surviving now."

Wal-Mart's city supporters argue that New York doesn't have the same level of retail jobs as its surrounding communities, in part because zoning restrictions make it difficult to develop here. Thus, its retail tax base isn't as hardy as in other places, and Wal-Mart will help expand it. While supporters admit some smaller retailers may go out of business, they don't believe that would be too much of a loss to the city overall.

"In New York City, we're talking about bodegas and greengrocers," says Steven Malanga, a senior fellow with the Manhattan Institute, a conservative think tank. "Not only do they overcharge consumers, they also don't offer any benefits for the people that work there."

Wal-Mart also contends that it already has plenty of customers in New York. They just travel elsewhere to shop. While the company doesn't have exact numbers, they include people like Queens resident Maria Torres and her family. They drive regularly to a Wal-Mart in New Jersey to take advantage of the savings and would love to be saved the trip.

"We buy there a lot," says Mrs. Torres. "It would be important to have one here."

But other Queens residents are skeptical. Take Maria Garcia, who hasn't yet decided whether she's in favor of the proposed Wal-Mart. "I like it ve