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Wal-Mart CEO: Profitability Driving
Supercenter Growth
By JAMES COVERT Of DOW JONES NEWSWIRES
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September
30, 2003
NEW YORK -- Wal-Mart Stores Inc.'s
(WMT) store growth next year will continue to be driven by its
supercenter format - simply because that is the company's most
profitable format, the top executive said.
Wal-Mart said late Monday it plans
to open 220 to 230 supercenters in 2004. Relocations and expansions
of existing discount stores will account for about 140 of the new supercenters, with the remainder built at new locations. Those
openings will dwarf the numbers of new discount stores, slated at 50
to 55. Sam's Clubs will open 35 to 40 locations, including about 20
relocations. Wal-Mart's developing Neighborhood Market format will
see only 25 to 30 openings.
"We are satisfied with the returns
on the Neighborhood Markets," Wal-Mart President and Chief Executive
H. Lee Scott said at the company's annual meeting with analysts at
its headquarters in Bentonville, Ark. "But we have a higher - much
higher - return on the supercenters, and we are going to spend our
efforts in that area."
By the end of this year,
supercenters will outnumber Wal-Mart's regular discount stores for
the first time, Scott said. Next year, they will outnumber discount
stores by at least 100, with more than 1,700 stores.
Wal-Mart executives in the past had
forecast limits on the growth of the supercenter format, figuring a
given area could support only a limited number of the giant stores,
which add full-line grocery stores to the general merchandise
offerings of regular discount stores.
Supercenter cannibalization, or
competition between stores of a single company, has hurt the
company's recent comparable sales by more than a percentage point,
and that figure will continue to creep higher as the number of
supercenters grows. But Wal-Mart is growing more skilled at locating
its stores to reduce customer overlap, for example by using
point-of-sale data to determine where a store's customers live.
What's more, "cannibalization
improves the customer experience," increasing the convenience of
locations, and resulting in shelves that are better stocked at both
stores, Scott said. He added that as stores mature, the effect of
cannibalization tends to wane.
"We can put more supercenters
closer together than we had ever dreamed of in our life," Scott
said.
As of August 31, Wal-Mart operated
1,494 discount stores, 1,386 supercenters, 532 Sam's Clubs and 56
Neighborhood Markets in the U.S.
-By James Covert, Dow Jones
Newswire
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Playboy Focuses on Wal-Mart, Which
Doesn't Sell the Magazine
By CONSTANCE L. HAYS
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The New York Times Late Edition - Final 2 English
29 September
2003
The November issue of Playboy takes
on Wal-Mart Stores Inc., the world's largest retailer. But no one
who shops for magazines exclusively at Wal-Mart is likely to see the
article, because Playboy is among the titles it does not sell.
The article, ''God and Satan in
Bentonville,'' in the November issue of Playboy, on newsstands
Monday, addresses the conservative, no-frills culture at Wal-Mart
after a tour of Bentonville, Ark., where it is based.
''Wal-Mart has never been able to
square its professed Main Street values -- the greeters at the store
doors, the flag-waving patriotism -- with the uncomfortable fact
that it's bad news for Main Street wherever it goes,'' Dan Baum
writes in the article. Mr. Baum reports that an independent
bookstore in town on the verge of shutting down is owned by a
daughter-in-law of Sam Walton, the founder of Wal-Mart.
Its ability to filter content for
its customers is among the points the article addresses, with such
observations as, ''The First Amendment prevents censorship by the
government, but Wal-Mart is now so huge that its perfectly legal
corporate policies can hinder freedom of choice.''
One evangelist interviewed said he
moved to Bentonville ''to fight Satan,'' and explained: ''Satan is a
mimicker. God is here, so Satan is here. Wal-Mart started out good,
selling things cheap to people who didn't have a lot of money. But
that's how Satan works.'' He added, ''The reason the religious right
is here in Bentonville is that it's holding off Wal-Mart.''
The retailer cooperated with Mr.
Baum by answering his questions and questions from his editors, a
spokesman, Tom Williams, said. ''We try to respond to all queries
that come to us,'' Mr. Williams said.
Playboy's Web site, Playboy.com, is
inviting women who work for Wal-Mart to pose nude for a feature
called ''Women of Wal-Mart.''
At Wal-Mart, ''we don't care for it
at all,'' Mr. Williams said. ''We think Playboy is exploiting our
name to sell the magazine.'' Has anyone signed up yet? Mr. Williams
said he did not know. But he added, ''We are confident a lot of the
associates are going to see right through it.''
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Should Denver
subsidize Wal-Mart?
Susan Barnes-Gelt
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Denver Post
Wednesday,
September 24, 2003
The world's biggest corporation
wants at least $12 million from Denver taxpayers to replace 20 small
shops with a Super Wal-Mart. And tomorrow the Denver Urb! an Renewal
Authority will approve the use of its most powerful tool - eminent
domain - to evict two Asian supermarkets, Denver's best dim sum
restaurant, a barber shop, beauty school, martial arts center and
several other small, locally owned businesses.
This co-called "friendly"
condemnation means DURA will relieve Wal-Mart and one of the current
landowners of the cost and aggravation of negotiating with a
collection of immigrant business owners. The threat of condemnation
also means all three property owners will get federal income-tax
breaks when it's time to pay taxes on their gains.
The multimillion-dollar tax subsidy
will close the gap between what the owners are asking for their
20-acre parcel of "slum and blight" and what Wal-Mart is willing to
pay. Ordinarily, the negotiation between a willing buyer and seller
reflects market value. But Wal-Mart says it won't pay the asking
price. The landowners are holding out for top dollar, and DURA is
willing to inflate the market.
A dozen years ago, DURA identified
this property as "slum and blight" and created an urban renewal
district. A few years later, immigrant business owners saw something
else: the opportunity to start a business, work hard and achieve the
American dream. It's urban renewal without capital letters or a
government handout.
Prodded by neighbors anxious for a
supermarket and tired of slow revitalization, DURA and the city are
ready to meet Wal-Mart's demand for aid.
Mayor John Hickenlooper's campaign
message was persuasive: Denver is open for business, especially
small business. Though his admini- stration inherited this dilemma,
the welfare-for-Wal-Mart scheme raises questions he must answer.
How many jobs will be lost?
University of California at Irvine economist Dr. Marlon Boarnet
found that for every 100 jobs a Wal-Mart creates, 150 existing jobs
in the community are destroyed.
What will the promised 400 jobs
pay? Will compensation exceed the $11,900 to $16,202 annual salary
the typical Wal-Mart worker earns?
Company spokesman Tom Williams says
fewer than half of Wal-Mart's employees are covered by the company's
health-care plan. This lack of coverage is further explained by
another company spokeswoman, Christi Gallagher: "Our plan is a
catastrophic plan. ... There's no cap on major illness or major
medical expanses."
Sounds catastrophic all right -
both for the employees and Denver Health's emergency room.
Right now, nearly 500 abandoned
Wal-Marts litter the landscape nationwide. Like all big-box
retailers, Wal-Mart remodels, expands and moves frequently. What
happens when the subsidy is paid off and Wal-Mart wants a bigger
store? Will the company sign an agreement guaranteeing its
participation in the redevelopment of the store? Or will Denver have
another decade of blight on West Alameda Avenue and Zuni Street?
The company hasn't submitted a site
plan to the city. However, the last plan the neighbors saw places
the store at the rear of the property, violating every rule and
regulation in Denver's urban design playbook. In return for a
handsome handout and shielding the company from existing tenants,
shouldn't Wal-Mart abide by the rules and regulations the city
requires of developers?
Condemnation and tax subsidy are
potent tools demanding substantial public benefit. Their use should
translate to long-term, quality revitalization, good jobs with good
pay, synergy for neighboring businesses and increased city revenue.
When the heavy club of government is used to transfer property from
one private owner to another, the public benefits must be
transparent and compelling.
A final question for Denver: Are
400 low-paying jobs, cheap goods and a grocery store worth evicting
20 shop owners, undermining local businesses and absorbing the
hidden costs of public health and social services? And, 12 or 15
years from now, what will we do with a big vacant box in the middle
of a parking lot?
The sales receipts from Wal-Mart go
to Bentonville, Ark. The Siu family, owners of the best dim sum
restaurant in Denver, banks up the street.
Denver native and civic activist
Susan Barnes-Gelt (bs13@qwest.net) served eight years on the Denver
City Council and was an aide to former Denver Mayor Federico Pena.
Her column appears on alternate Wednesdays.
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Class action no
bargain for Wal-Mart
1.5 million could be added to bias
suit by women
By Greg Burns Tribune senior correspondent
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Chicago Tribune
September
24, 2003
As sex discrimination cases go, the
pending lawsuit against Wal-Mart Stores Inc. is nothing unusual
except in one respect: Size.
At a pivotal hearing in San
Francisco Wednesday, a federal judge will consider arguments about
whether the case, brought by a half-dozen individuals, should expand
to encompass a staggering 1.5 million of the retail giant's current
and former employees.
If U.S. District Judge Martin
Jenkins certifies the case as a class action, all the women who
worked for the nation's largest employer between the end of 1998 and
the end of 2002 could be eligible for back wages. That would make it
the biggest-ever class-action litigation involving civil rights,
attorneys in the case say.
At issue is whether Wal-Mart, the
world's largest private employer, systematically discriminated
against women in its pay and promotion policies.
But the sheer scale of the
litigation has become the overarching factor. Class-action status
for such a large case would break new ground in a controversial
arena of the law that critics consider out of control and proponents
view as a vital check on corporate power.
Wal-Mart's status as a respected
model for other large employers raises the stakes as well,
especially with the rise of megacompanies whose practices directly
affect hundreds of thousands at a time.
Among its defenses, Wal-Mart has
said its adversaries are trying to hold it responsible for a
long-established phenomenon in the American workplace: "The
undisputed fact, present in virtually every major corporation, that
the percentage of women at the lower level is higher than the
percentage at the upper level," according to documents in the case.
In the hearing Wednesday, attorneys
for the Bentonville, Ark.-based retailer are expected to argue that
because its operations are so large and varied, the experiences of a
few employees never could be entirely representative. The lawsuit
would create conflicts by lumping together in a single class the
company's bottom-rung cashiers, for instance, with its 544 women
store managers who supervised them.
Since Wal-Mart has so many
different departments under one roof, taking action against the
entire company is akin to suing "all the shops" on main streets from
Alaska to Florida, the company said.
But by pursuing a "too-big-to-sue"
defense, "Wal-Mart is seeking a large-company exemption from civil
rights law," countered Joseph Sellers, one of several attorneys
bringing the discrimination case. "If Wal-Mart can get away with it
because of its size and deep pockets, it's going to speak volumes."
The issue of class certification is
the most significant hurdle, observers maintain.
Given the "astronomical" resources
of Wal-Mart, its low-wage women employees have no practical means
besides class-action litigation to enforce their rights, the
plaintiffs said in court documents. Wal-Mart "knows that if it can
defeat class certification, it will not be held accountable for its
conduct."
Logistical nightmare
Yet proceeding with a vast class
action would be unfair to Wal-Mart as well as a logistical nightmare
for the legal system, countered corporate spokeswoman Sarah Clark.
"No court has ever certified a class like this before," she said.
"It's simply not possible for the experiences of so few to represent
so many."
In practice, certification almost
surely would compel Wal-Mart to settle, no matter the merits of its
arguments, said Lester Brickman, a law professor at Yeshiva
University and a critic of class-action practices.
Even if the company believed it had
a strong case, the consequences of losing such massive litigation
would be too great a risk to run, he said. The decision on whether
to certify the class is "the whole ball game," he said. "There is
either a home run or an out."
The case turns on a dispute over
the statistical analysis of Wal-Mart's workforce, as defined by
dueling expert witnesses. That, attorneys say, is a fairly common
approach to sex-discrimination cases.
On the plaintiff's side, the
numbers show that Wal-Mart pays women less than men in every part of
the country where it operates and in nearly every job, from sales
associate to district manager. And although women account for
two-thirds of lower-paid hourly workers, they receive only one-third
of all promotions into management.
The pay disparity generally rises
in more senior posts, with the earnings of male regional vice
presidents averaging $419,435 a year as of 2001, or 50 percent more
than the $279,772 average for the relatively few women in those
high-ranking jobs.
Even among cashiers, male employees
earned $14,525 to $13,831 for women, who generally received higher
performance ratings.
Until recently, Wal-Mart selected
management trainees entirely through a "tap on the shoulder" system,
allowing store managers discretion over who was considered, that
plaintiffs brand as arbitrary and overly subjective.
As a result, the plaintiffs say,
Wal-Mart has maintained a pervasive male-oriented culture typified
by an annual retreat for senior management that revolves around a
quail hunt.
Wal-Mart flatly disputes the
allegation that it discriminates. "Wal-Mart is a great place for
women," said spokeswoman Clark. "The plaintiffs have a huge burden
of proof to meet."
Statistical analysis
Among the challenges is a competing
statistical analysis by a Wal-Mart expert that focuses on how many
women who apply for higher positions actually get the promotions.
While the plaintiffs say the application process is flawed, "Women
at Wal-Mart are more successful than men at securing the positions
they seek," the expert concluded.
Of 41,000 applicants to the
position of support manager, 46.1 percent were women, and 47.2
percent of those getting the promotions in the period covered by the
lawsuit were women, according to Wal-Mart.
Similarly, promotions of women to
higher-salaried positions such as store managers exceeded the rate
at which women applied. And differences in pay become statistically
insignificant when adjusted for factors such as the size and type of
store, the company said in court documents.
Judge Jenkins is expected to hear
several hours of argument Wednesday, but his ruling could be weeks
or months away.
Some advocates for using
class-action litigation to bring about change in the workplace see
great potential in the case.
"Litigation is so difficult for
individuals. In groups, they have more power," said Sheribel
Rothenberg, a Chicago attorney who focuses on employment issues.
"It's like this generation's unionization. Class actions serve some
of the same functions."
But others say that partly because
of its size, the case is unlikely to move ahead.
"The policies and data probably do
vary by store," said John Beisner, a Washington attorney who
specializes in defending against class actions. "It's probably
fairly difficult to certify."
Copyright (c) 2003, Chicago Tribune
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'Big box'
ordinance is OK'd by judge
By Eric Swedlund
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24 September 2003
ARIZONA DAILY STAR
A Pima County judge Friday upheld
Tucson's "big box" ordinance, rejecting Wal-Mart's claims that the
ordinance was unconstitutional, violated open meeting laws and
harmed the retailer.
Superior Court Judge Charles S.
Sabalos ruled that "Wal-Mart does not have standing to complain
about the legality or constitutionality" of the ordinance the City
Council passed Sept. 27, 1999. It limits the size of grocery
sections in stores larger than 100,000 square feet and requires such
stores to get special approval of plans for dealing with noise,
lights and traffic.
Wal-Mart filed suit in October
2000, arguing that new city regulations violated the state's Open
Meeting Law because amendments the council made immediately before
approving the ordinance were not publicized ahead of time, exceeded
the city's power to set zoning regulations and did not serve a
"legitimate governmental purpose." The suit said it was designed to
protect grocery stores from competition.
In the ruling, Sabalos wrote that
the ordinance serves government purpose in mitigating the effects of
"economic and aesthetic blighting of residential areas when
conveniently located grocery stores within the neighborhood shopping
centers, often anchor stores, close their operations due to
competition from Big Box establishments."
The judge agreed with all of the
city's points, specifically that since Wal-Mart never applied for an
exception to the regulations it could not prove harm or challenge
the constitutionality of the ordinance, said City Attorney Michael
House.
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Wal-Mart stole his ideas and
employees, businessman says in lawsuit
BY D.E. LEGER
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16 September 2003
The
Miami Herald
A Vero Beach businessman announced
a $1 billion lawsuit against Wal-Mart Tuesday, charging the retail
giant of a conspiracy to steal his business.
Jeffrey Saull, owner and manager of
Tijid and Palm Beach Home Accents, which manufactures, imports and
sells office chairs and candles, among other products, said a former
partner collaborated with Wal-Mart to steal his design ideas and
talented employees since 2002, according in a lawsuit filed in
Indian River County. When he confronted Wal-Mart executives about
this, they said they would do something about it, but they did not,
he alleged.
Two weeks ago Wal-Mart stopped
stopped buying products from his firm.
''Why do I want to be David going
up against Goliath?'' said Saull, who said he had to lay-off
two-thirds of his 50-person staff this month after losing the
Wal-Mart account. ``I wonder if Wal-Mart could do this to me, a
longtime partner, what they would do to others. This is one mom and
pop company Wal-Mart won't be running out of town.''
Suzanne Haney, a Wal-Mart
spokesperson, said the company would have no comment until later
today.
Willie E. Gary, Saull's attorney,
said he expected to win the case. ''We don't come seeking charity,''
he said. ``We want a clean fight. We're prepared for war.''
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Wal-Mart's Standard of Living
ANNE ARMSTRONG
[back to
top]
15
September 2003
The Washington Post
In his Sept. 10
letter defending Wal-Mart, Jay Allen said the chain's full- and
part-time workers were "eligible" for benefits. But that does not
mean that these workers can afford the benefits because their
"competitive" salaries may not allow for buying into insurance in
addition to paying living expenses. Many of the families that the
Wal-Mart senior vice president mentioned as living "paycheck to
paycheck" include people working at Wal-Mart.
Further, the fact
that these families live hand to mouth does not justify the chain's
buying clothing and toys from nations that exploit their workers.
Wal-Mart could slash its profit margins and buy from responsible
nations while still offering good prices.
Mr. Allen said
Wal-Mart "[raises] the standard of living for millions of U.S.
families every day," but charging someone $2 less for a bag of chips
does not raise one's standard of living. However, paying the
employee who rings up that bag of chips $2 more an hour just might.
Is Wal-Mart the
devil incarnate? No.
But is it a savior,
sent down from on high to save the poor and hungry as Mr. Allen
would have readers believe? Definitely not.
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Wal-Mart set to pay ex-worker $150,000 to settle EEOC suit
BY ALEX DANIELS
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top]
13 September 2003
The Arkansas Democrat Gazette 41
Wal-Mart Stores and
the Equal Employment Opportunity Commission on Thursday settled a
year-long suit filed in U.S. District Court for the Eastern District
of Texas charging the company retaliated against a worker at a
Texarkana store after she filed a sexual harassment complaint in
1999.
The Bentonville
company agreed to pay $150,000 to former employee Marcia Mitchell.
In addition, Wal-Mart said it would monitor Miller's former boss,
Deshun White, the store's bakery manager.
In the suit,
Mitchell accused White of subjecting her to a hostile work
environment and barraging her with unwelcome comments and touches.
When she complained, she was transferred out of the bakery to a job
in the hardware department, according to the suit. That job, the
suit said, involved heavy lifting.
The EEOC claimed
that the transfer was retaliatory, made without proper investigation
into Mitchell's complaint and effectively led to her discharge from
the company.
Wal-Mart also
agreed to post information throughout the store informing employees
about Title VII of the Civil Rights Act of 1964, which protects
workers from discrimination based on race, color, religion, sex or
national origin. Wal-Mart also will provide training for its
managers at the Texarkana store.
"We are pleased the
company has taken this proactive step to ensure that harassment
doesn't happen again, and if it does, they'll act accordingly," said
Devika S. Dubey, senior trial attorney for the EEOC in Dallas.
Wal-Mart did not
admit guilt in the case. Instead, the company opted to settle,
calling the move, a "business decision," said Sarah Clark, a
Wal-Mart spokesman.
"We found no
evidence supporting allegations that Wal-Mart or any of its
associates engaged in any wrongdoing," Clark said.
Clark declined to
further describe the decision, saying it was in the best interests
of the company's employees, customers and shareholders to settle the
case.
She added that
Mitchell was transferred out of the bakery department to accommodate
her request to work only three days a week. Such a shift was
available in the hardware department, Clark said.
Starting this year,
Wal-Mart managers must take a two-hour training seminar on sexual
harassment law, Clark said. All employees receive information on
appropriate workplace behavior in handbooks, Clark said. In
addition, all workers receive computer training that focuses on
sexual harassment.
"They are required
to take it," she said of the computer class.
Wal-Mart has more
than 1.3 million employees internationally. The company would not
comment on the number of EEOC complaints that have been filed
against it. The EEOC does not release information on the number of
charges made against a particular company.
In the retail
sector nationwide, the commission received 8,272 charge filings in
fiscal 2003, which ends Sept. 30. The filings reflect all charges
filed by retail industry employees, not just sexual-discrimination
complaints. In fiscal 2002, the commission received 9,737 charges.
In Arkansas, the EEOC received 230 charges from retail employees so
far this fiscal year, down from 310 last year.
In all sectors
nationwide, the EEOC received 61,459 Title VII charges in 2002. Of
those, 21.2 percent received "Merit Resolutions," a term the EEOC
defines as having outcomes favorable to the charging parties or
charges with meritorious allegations.
As a last resort,
the EEOC said, charges result in litigation against a company. The
company currently has two Title VII cases - one in Alabama and one
in Kentucky - pending versus Wal-Mart.
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San Marcos Wal-Mart story
By John Berhman UNION-TRIBUNE
STAFF WRITER
[back to top]
September 12, 2003
SAN MARCOS – In a
stunning reversal, Councilman Lee Thibadeau says he will probably
change his vote on a controversial Wal-Mart store approved for
southwest San Marcos.
That would mean a
3-2 vote for the project – which residents who live near the site
have been fighting for months – would almost certainly become a 3-2
vote rejecting it.
"I don't want to
put the city through what I think will be a very nasty campaign,"
Thibadeau said yesterday.
Thibadeau was
referring to a well-organized initiative drive by a group called
Citizens for
Responsible Growth in San Marcos, which opposes the store. It
submitted petitions Monday with about 4,400 signatures asking that
the council rescind its approval of the project. If the council
doesn't do that, it will have to put the issue on the March 2
ballot.
"I'd be thrilled if Mr. Thibadeau
changed his vote," Laura Meyers, one of the group's leaders, said
yesterday. "It has been our goal all along. The people don't want
this (store)."
Peter Kanelos, a spokesman for
Wal-Mart, said he would not speculate on what the council might do
when presented with the referendum – which the Registrar of Voters
has not yet verified has the required 2,421 valid signatures – or
what action Wal-Mart would take.
"What I would like to know is who
paid for the collection of the signatures," Kanelos said, suggesting
the Teamsters Union and the grocery clerks union may have done so.
Wal-Mart has consistently opposed
unionization of its stores.
Meyers said most of the money came
from contributions from residents and about 50 signature gatherers
were volunteers, while a dozen were paid. Leonard Miller, also a
member of the group, said the manner in which the signature drive
was financed would be disclosed in financial statements required by
the state.
The store would be built on 20
acres at the northeast corner of Rancho Santa Fe Road and a future
alignment of Melrose Drive, in the University Commons development.
University Commons had no plans for the store until city officials
asked that a 300-unit condominium project be eliminated to make room
for one. Wal-Mart had approached the city seeking a site for a
second store in San Marcos.
The council approved the store in
August after a 5-2 vote against it by the city Planning Commission.
Yesterday, Thibadeau said he was
impressed with the opponents' efforts and always had concerns about
traffic and noise from the store.
"I give the Wal-Mart opponents
credit," he said. "They exhausted the legislative process, going to
the city Planning Commission and the council. And then going the
referendum route.
"I want to do what is best for the
whole community. But why put these people and the city through this
whole campaign process?"
But Thibadeau has another motive
for not having the potentially divisive Wal-Mart question on the
March ballot.
The same ballot will also contain a
measure, financed by San Diego Gas & Electric, intended to slow or
block the city's effort to find another company to provide gas and
electricity in new developments in San Marcos. The city is planning
on placing a competing measure regarding the energy question on the
March 2 ballot.
For more than two years, Thibadeau
has been the most vocal supporter of the city's dumping SDG&E for
another company, along with Mayor Corky Smith and Councilman Mike
Preston. They are the same three who approved the Wal-Mart.
"I think there is a more important
battle that will be on that ballot," Thibadeau said yesterday,
referring to the dueling city and SDG&E measures.
Smith and Preston said though they
will reconsider their Wal-Mart vote, as the referendum would
require, they remain supportive.
"I haven't made up my mind yet, but
there are still some things that bother me about this," Smith said.
"I still feel that a lot of the people who are against this don't
even live in the city, and they want to come in and tell us what to
do."
Wal-Mart opponents, many of whom
live in Carlsbad and unincorporated areas, counter that getting an
issue on the ballot required that they collect signatures only in
San Marcos and that the signatures came from all over the city.
"I also don't like the idea that
their two referendums put the entire University Commons project in
jeopardy," Smith added.
Wal-Mart opponents collected
signatures for two measures. One would prohibit a store on the
proposed 20-acre site, the second would prohibit one on any of
University Commons' 416-acre property. Smith said the way the second
referendum is written, the entire 1,224-unit University Commons
project will be put on hold if it passes.
Preston said it "was pretty
impressive" that store opponents collected so many signatures in
only 10 days, "but I also don't know if people knew what they were
signing. It was a couple of pretty lengthy documents. I will rethink
the issue though."
City Clerk Susie Vasquez said
yesterday she probably will send the signatures to the county
Registrar of Voters next week. That office will have 30 working days
to verify signatures.
[back to top]
Wal-Mart union drive heats up;
charges filed
Grace Leong THE DAILY HERALD
[back to top]
Saturday, September 13
A union organizing drive at the
Wal-Mart Supercenter at 1355 S. Sandhill Road in Orem is
intensifying with the filing of unfair labor practice charges
against the nation's largest retailer.
The Orem store is the first
Wal-Mart in Utah that's accused of federal labor law violations by
the United Food and Commercial Workers International in Washington,
D.C., said officials with the National Labor Relations Board.
The UFCW International filed
charges with the National Labor Relations Board on Sept. 5, accusing
Wal-Mart of violating federal labor laws in its efforts to
discourage its Orem workers from supporting a petition for an
election for union representation.
The NLRB, a federal agency charged
with investigating unfair labor practices, said it is now
investigating the union's charges. If the charges have merit, the
NLRB will issue a complaint against Wal-Mart.
Wal-Mart officials declined to
comment on the union's charges about unfair labor practices.
In Las Vegas, where the UFCW's
national organizing drive of the giant retailer originated, an
administrative law judge, acting on an NLRB complaint, had ruled in
January 2002 that Wal-Mart was to post notices at three Las
Vegas-area stores pledging, among other things, to obey the law and
stop preventing its employees from distributing union materials.
In recent months, organized labor
has escalated efforts to unionize Wal-Mart stores after several
years of failing to organize a single store.
The Orem store workers now are in
the process of gathering the required number of signatures to force
a vote. Once 30 percent of the Orem store's 500 workers have signed
in support of an NLRB-held election, federal law requires the store
to allow a vote on a union.
UFCW alleged in the charges that
Wal-Mart violated federal labor laws by surveilling and
interrogating workers about their union activities and implementing
work policies "intended to interfere with the employees' rights to
organize."
Wal-Mart also was accused of
"soliciting grievances from employees and granting benefits to
employees" who whistle-blew about union-friendly workers, the union
said.
The union said Wal-Mart violated
federal labor laws by failing to have a union representative or
co-worker present during investigatory meetings with its worker,
Bret Pope.
Pope, a Wal-Mart worker for more
than nine years, said the company allegedly failed to take steps to
resolve sexual harassment complaints he had filed with Wal-Mart
management against a supervisor and failed to allow a co-worker to
be present during meetings he had with Wal-Mart management about his
complaints and concerns about being watched.
"They also installed several
surveillance cameras at my service desk and asked other workers
about my union activities," he said.
Shawn Mansell, a sales clerk at the
Orem store for more than three years, alleged Wal-Mart forced
workers to attend mandatory anti-union meetings and hired union
busters to discourage union support since the organizing drive began
in June at the Orem store.
Fueling the organizing drive in
Orem is a growing disenfranchisement of many Wal-Mart workers with
the company's wage policies and working conditions, the union said.
UFCW officials said they fear Wal-Mart would drag down hourly wage
standards, charging the average wage for Wal-Mart workers is
$7.50-$8.50 an hour, while unionized workers with two or more years
of experience earn about $12.51 an hour with an hourly increase of
25 cents annually thereafter.
UFCW Local 711 represents workers
in Utah and Nevada, including Smith's and Albertson's grocery store
employees in Utah County.
But Christi Gallagher, a Wal-Mart
spokeswoman, disputed the union's allegations about wages and
benefits.
"Before we go into a market, we do
a competitive wage analysis to make sure we're competitive with all
retailers, both union and non-union," she said. "We don't start at
minimum wage at any of our stores in the country. Our benefits
include profit sharing plan, 401(k), stock purchase plans and
medical benefits."
Grace Leong can be reached at
344-2910 or gleong@heraldextra.com.
[back to top]
Wal-Mart sued for labor abuses
BY JULIE FORSTER Pioneer Press
[back to
top]
11 September 2003
Debbie Simonson was asked to
straighten up her area of the Wal-Mart store in Brooklyn Park at the
beginning and end of her shifts when she worked there in 2000 and
2001. She followed her supervisor's requests to work "off the
clock," passing out promotional items to customers, assembling candy
bags and clearing carts from the parking lot.
Most often, she didn't get meal or
rest breaks, and after she was promoted to supervise cashiers, the
store was so understaffed that there was never anyone to relieve
them for breaks.
She complained to higher-ups but
nothing changed. "They didn't care," she said. "It wasn't a
priority."
Now Simonson is fighting back by
suing her former employer, the nation's largest retailer. On Friday,
she and three other women will ask a Dakota County District Court to
give them class-action status on behalf of 63,000 current and former
workers in Minnesota. Their lawyers estimate that Wal-Mart workers
across the state lost tens of millions of dollars in wages and
500,000 hours of breaks per year since 1998.
Complaints such as these are at
issue in similar lawsuits filed across the country against Wal-Mart
by its employees. Wal-Mart says there are 37 separate off-the-clock
cases seeking class-action status in 29 states.
Wal-Mart is opposing the Minnesota
motion for class certification.
"This lawsuit alleges that the
plaintiffs deviated from company policy for many highly
individualized and personal reasons, which make this case unsuitable
to be pursued as a class action," said Christi Gallagher, a Wal-Mart
spokeswoman in Bentonville, Ark.
Simonson, Nancy Braun, Cindy
Severson and Pamela Reinert contend that employees were forced to
work without getting paid in order to meet Wal-Mart's profit and
productivity goals.
"It's important to speak up and
hold our ground," Simonson said Wednesday. "They have to comply with
the law."
In five cases elsewhere, courts
have denied the class certification that the Minnesota women are
seeking. A court in Indiana recently certified one class action. Two
years ago, a class action was certified in Colorado and then settled
for a reported $50 million. In late December, a Portland, Ore., jury
found Wal-Mart guilty of violating federal and state wage-and-hour
laws in requiring employees to work "off the clock."
Gallagher points to Wal-Mart's
policy outlined in a handbook that reminds employees to clock in at
the beginning of the workday. "Remember that working off the clock
is not only against Wal-Mart policy -- it's against the law," it
says.
Wal-Mart's policy allows employees
a paid rest break for every three hours worked and an unpaid meal
period of at least 30 minutes for every six hours worked.
"Wal-Mart's policy is to pay its
associates for every minute that they work," Gallagher said.
Individual managers who deviate from Wal-Mart policy are subject to
disciplinary action, including termination, she said.
Minnesota labor law says workers
are entitled to time to use the nearest restroom within each four
consecutive hours of work and mealtime for every eight or more
consecutive hours worked.
According to the women's lawsuit,
Wal-Mart's violations stem from a deeply ingrained corporate culture
of maximizing profits as the one and only objective.
Managers feel so pressured to meet
ambitious financial goals, the suit says, that they keep down labor
costs by altering time cards or getting employees to work off the
clock before and after their shifts.
One time clock report from the
Apple Valley store shows that one of the sales associates worked
8.28 hours of overtime. On the same report, a handwritten note
states: "needs 8.28 hours taken off," according to court records.
Simonson's time records in one case
were edited to insert a punch-out time of 6:58 a.m., one minute
after she started her day. Braun's store manager at the Apple Valley
Wal-Mart asked her to place frozen food deliveries in the freezer
before clocking in at the beginning of her shift, the suit says. She
also was asked after clocking out in the afternoon to stay for an
extra 15 or 30 minutes to help out at the in-store eatery.
Reinert says she frequently was
asked to work for 15 to 30 minutes after clocking out at four
different Twin Cities Sam's Clubs, where she had jobs in personnel,
payroll and as an assistant manager.
Severson said when she went
shopping with her kids one day at the Brooklyn Park Wal-Mart where
she worked, her store manager asked her to help in the customer
service area. She says she ended up working 11/2 hours without being
scheduled or clocking in.
The women earned between $5.46 and
$10 per hour and worked at Wal-Mart and Sam's Club stores from 1997
through 2001.
"These were the lowest-paid of our
working poor," said Jonathan Parritz, one of the plaintiff's
attorneys arguing the case. "They were slightly above minimum wage
but not much."
Between 15 and 25 Wal-Mart workers
a week call Al Zack, an official with the United Food & Commercial
Workers union in Washington, D.C. Zack, who is leading the effort to
organize Wal-Mart workers nationwide, says one of the top complaints
is the "off-the-clock" work.
"Wal-Mart is a different kettle of
fish simply because of its size," Zack said, adding that Wal-Mart is
extraordinary among retailers in its intense focus on minimizing
costs. Managers will do anything, he said, including chiseling 15
minutes off of a time card, to get in line with the numbers.
In the Oregon case, 400 current and
former employees joined the litigation. What convinced the jury?
"Hearing similar stories from
workers from around the state, who didn't know each other, hadn't
met each other but had described the same experiences while working
at different Wal-Marts," said James Piotrowski, the plaintiff's
attorney in the case. A damages trial is set for Jan. 6.
Attorneys representing the
Minnesota plaintiffs said they plan to use statistical evidence as
well as an internal audit by Wal-Mart to make their case. They also
will use Wal-Mart's own employee handbook and policies to prove that
Wal-Mart breached promises to its employees when it failed to pay
them for hours worked and to give them rest and meal breaks.
The women in Minnesota also are
relying on an important precedent in their case. The Minnesota
Supreme Court has recognized that an employer's published policies
can create a contractual obligation to its employees.
[back to top]
Wal-Mart exports anti-union stance
to China
By Richard McGregor in Shanghai
[back to
top]
Published: September 10 2003 14:46
Wal-Mart has long battled to keep
unions out of its stores in the US. Now, the world's largest
retailer has picked the same fight in China.
The All-China Federation of Trade
Unions, which oversees all workers' organisations in the country,
said it has been repeatedly rebuffed in an effort to establish
unions in Wal-Mart outlets.
The federation says all companies,
foreign and local, are required to establish a union under its
supervision, using funds from a 2 per cent levy on wages.
"Many times we have tried to talk
to Wal-Mart about this, but they knock us back with excuses, like
the boss is not in, and so on," said an official at the federation
in Beijing.
"We want to tell them that unions
in China are not troublemakers - they help the company "develop". As
sceptical as Wal-Mart might be about such claims, Chinese unions
have traditionally been an instrument for the Communist party to
control workers, not a vehicle for agitation and strikes, which are
almost never allowed.
The federation said that about 90
per cent of foreign companies had co-operated with it in one form or
another, and it would continue to press Wal-Mart.
Yuan Jizhong, another federation
official, said the "Beijing party committee had paid great attention
to this issue and had held special meetings about it."
"The task is very difficult, but we
will carry on," Mr Yuan said.
Wal-Mart has 27 stores in China and
sources about $10bn worth of goods from the mainland every year,
according to US government estimates, or about a tenth of all
Chinese exports to the US.
A spokesman for Wal-Mart could not
be reached, but a company official in Shenzhen, Zeng Qiang, told
Reuters: "We're not prepared to make a statement at this time."
[back to top]
Here Comes the Neighborhood
by John Unrein, Baking Buyer
[back to top]
September 1, 2003
When Sam Walton ran for student
body president at the University of Missouri in the 1930s, he
learned a crucial lesson called the 10-foot rule: Greet anyone
within 10 feet with a smile and speak to them directly, preferably
by name.
This neighborly attitude made
Walton billions.
Now, as Wal-Mart gains familiarity
and clout in the food business, the world's largest retailer is
ready to cozy up to even more bakery customers through its
Neighborhood Markets. These stores are roughly one-quarter the size
of a Wal-Mart Supercenter and carry dozens of bakery items such as
donuts for 50 cents apiece, loaf cakes for $1.49 and hot French
bread for less than a buck. Yet little baking is done at store
level.
Most baked goods are shipped from a
nearby Supercenter, and analysts say Wal-Mart is wise to recognize
these two concepts fit well together. Both are supported by regional
distribution centers that keep Wal-Mart stores efficiently stocked.
"Wal-Mart is a stellar brand, and
they have proven through the test of time that most everything they
do turns to gold," says Ira Blumenthal, a retail analyst and
president of Co-opportunities Inc. in Atlanta, GA. "It's only a
matter of time until they build strong credibility in food
categories, as well."
There are now 53 Neighborhood
Markets in eight states. Wal-Mart plans to add 20 to 25 locations
during its current fiscal year.
By comparison, Wal-Mart operates
1,356 Supercenters. This discount store-supermarket hybrid was
introduced in 1988, and within a decade Wal-Mart had emerged as one
of the nation's largest grocers. Today, it's No. 1.
Analysts predict Neighborhood
Markets will solidify Wal-Mart's dominant position in the
supermarket sector by grabbing new customers in urban areas. New
locations are going up in fast-growing markets such as Dallas-Fort
Worth, TX, Orlando, FL, and Salt Lake City, UT.
"To get into metros, this is their
answer," says Dick Spezzano, a retail analyst and a former
perishables executive at Vons supermarkets in Southern California.
"You can't get 15-acre blocks in big cities. But there are
opportunities in metros to put down 30,000- to 40,000-square-foot
stores. The challenge is the Krogers and the Safeways of the world
are looking for the same spots, and they'll pay more for location."
Neighborhood Markets, which debuted
in 1998, range in size from 42,000 to 55,000 square feet and carry
fresh perishables, general merchandise and dry grocery items.
Neighborhood Markets typically employ 80 to 100 and offer about
28,000 items.
"Neighborhood Markets are generally
opened in areas with existing Supercenters," says Karen Burk, a
Wal-Mart spokesperson. "This allows shoppers who want to make a
quick trip to the grocery store a convenient, more intimate format.
For longer grocery trips, customers can enjoy the nearby
Supercenter. Both formats offer a different kind of convenience for
our customers."
What Neighborhood Markets lack in
production at store level, they more than make up for in
merchandising. Bakery departments feature a sparkling clean, upscale
look with wooden tables-with extras like mobile heating display
units for stocking French bread on the sales floor. Customers just
open the door and select what they need.
"The more square feet you have with
stuff to sell, the better off you are," Blumenthal says. "The more
space you have devoted to baking and production, that's not selling
feet."
Another unique feature of the
Neighborhood is the "Grab-n-Go" section, where shoppers can buy a
donut or cinnamon roll on the honor system by dropping two quarters
in the box. Or they can pour their own coffee or soft drinks and
pick up a newspaper here. The self-serve price is noted above each
product. Not all Neighborhood Markets offer the Grab-n-Go section.
Most new locations offer this feature.
"It has been popular in those
communities where it is available," Burk says. "Whether it's
one-stop shopping at our Supercenters or the Grab-n-Go at our
Neighborhood Markets, convenience is definitely a focus for serving
our customers."
Some analysts say Wal-Mart has
tweaked the merchandising of Neighborhood Markets so much in five
years that they've rubbed the original paint off the shelves. One
challenge has been to open more aisle space.
"From the stores I've seen, they've
got perishables squeezed. You've got to have 6- and 8-foot aisles,
so people feel comfortable shopping," Spezzano says. "You want to
slow down the shopping trip to expose more products to them. When
you squeeze down bakery and produce, that's 70% impulse. Tight
aisles and tight displays in the first Neighborhood Market stores
worked against them."
But new locations have a more open
feel. Plus, bakery selections are on the rise because perishables
departments in smaller stores play an even more important role to
the gross-profit bottom line. Some inside Wal-Mart are in favor of
larger Neighborhood Markets in the future so the stores can boast
wider selection.
In July, a new 48,600-square-foot
Neighborhood Market opened in Fort Worth, TX.
"They tweak and tweak and tweak.
The store gets better each time," Spezzano adds. "It shows you how
strong they are. Once they latch on to something, they roll it out."
Blumenthal agrees that it's not a
question of if Wal-Mart will expand its Neighborhood Market concept
across the country, as it did with Supercenters during the '90s, but
when.
"Being relatively slow to get into
something is their pattern," he says. "Look at McDonald's. They had
two restaurants for eight to 10 years. To me, this is the Wal-Mart
way. Wal-Mart knows no other way than winning. They are perhaps the
world's leading marketer. They plan well. They research well. Most
importantly, they execute well."
[back to top]
Wal-Mart
Government Perks Raise Questions
By David Sedore, Palm Beach Post
Staff Writer
[back to top]
Sunday, August 31, 2003
MACCLENNY -- On the eastern
outskirts of this North Florida town, where U.S. 90 makes a long,
slow rise, behemoth trucks turn off the two-lane highway into an
industrial park that emerges from the surrounding pine woods.
Their destination is a Wal-Mart
distribution center, a sprawling, low-slung building where trailers
filled with meats, produce and foodstuffs of all sorts are unloaded,
sorted and reloaded for shipment to company stores as far north as
Charleston, S.C., as far south as Daytona Beach and as far west as
Tallahassee.
For Macclenny and surrounding Baker
County, where the biggest employer is a state hospital and No. 3 is
a state prison, the traffic means jobs, good jobs. Nearly 700, in
fact. The jobs are there because the city leveraged its location and
workforce with $8.9 million in corporate goodies -- free land and
tax credits -- to beat unknown, unnamed rivals to the north trying
to woo the retail giant.
Wal-Mart hopes Palm Beach County
officials also will be accommodating, as it looks to build a food
distribution center on a tract just west of Royal Palm Beach and
Wellington on Southern Boulevard, according to sources familiar with
negotiations. Like Macclenny, Palm Beach County faces competition
from the north in Brevard County.
But a deal to bag the project
raises the question not only of whether the price -- believed to be
as high as $10 million -- is worth it but also of whether a county
with an already booming economy should still be in the business of
paying for jobs.
"I want this project here," says
Larry Pelton, president of the Business Development Board of Palm
Beach County, the private agency that oversees local economic
development efforts. "But we have to be realistic. If it's going to
happen, it's going to happen because a private landowner and the
company agree on a price that makes the project feasible.
"I have never, nor would I ever,
ask the county to ante up $10 million."
Pelton legally could not confirm
that Wal-Mart is interested in Palm Beach County, but he did say a
major company is looking at the site, now owned by Palm Beach
Aggregates. The site offers strong transportation links convenient
to all points in South Florida, he says. It's also cheaper to ship
from Palm Beach County than Brevard.
The problem is site cost. The
Southern Boulevard property is about $10 million more than the
Brevard competitor's. Pelton hopes the site owners will work out a
deal with the company rather than rely on government to put together
a large package of grants and tax credits to get it done. The
project is on hold temporarily, which might give the sides more time
to work out the numbers.
"I want the project, and I think
it's going to bring jobs," says Commissioner Addie Greene, whose
district includes Belle Glade, where unemployment is high and good
jobs are scarce. "But does it make sense? Do they seem like they
need your financial support? "Give me a break."
Company officials declined to
comment on the project.
St. Lucie OKs $1.2 million
St. Lucie County recently agreed to
give Wal-Mart $1 million in cash through that county's Job Growth
Incentive Fund for construction of a 1.2 million-square-foot
regional distribution center that is to be built near Fort Pierce.
It will employ about 1,000. The county's also throwing in $200,000
worth of dirt for the site, plus some office space while the center
is being built.
St. Lucie is extending a road to
the site at a cost of more than $8 million, a project that County
Administrator Doug Anderson says was already in the works. It's also
extending utilities, but those will also be available to other
customers.
Wal-Mart's distribution system,
unglamorous as it may sound, is one of the not-so-secret weapons
that has put it atop the Fortune 500. It's part of what makes
Wal-Mart one of the most feared, and admired, companies in the
world.
For the fiscal year ended Jan. 31,
Wal-Mart earned $8 billion on revenue of $244.5 billion. It had
1,568 discount stores, 1,258 Supercenters, 525 Sam's Clubs and 49
Neighborhood Markets -- the latter a relatively new concept that
sells mainly groceries.
At Wal-Mart's strategic core,
however, is the 84 distribution centers that feed those stores. It
is rapidly opening new ones to support its breakneck growth and
major push into groceries. And populous Florida is clearly in its
sights.
Besides Macclenny, Wal-Mart has a
regional center in Ridge Manor that handles general merchandise and
a food center in Winter Haven. It's planning a regional center in
Alachua, although on hold, and is building a food distribution
center in Arcadia on the DeSoto County-Charlotte County line.
While building this network of
distribution centers, Wal-Mart generally expects, and has gotten, a
fair amount of government help. Since the 1980s, the giant retailer
has received at least $150 million in municipal, county, state and
even federal incentives to open 47 distribution centers in 32
states, according to a study by The Palm Beach Post.
The study is based on government
and agency documents, interviews, Wal-Mart news releases and
published accounts of distribution center construction and openings.
The $150 million includes only
incentives quantified in the reports. That number probably would
grow by tens of millions if unquantified breaks, such as government
bond financing for construction, and ongoing breaks, such as those
given to businesses in enterprise zones, were included.
Many types of incentive
The deals, usually paid out over a
period of years, include just about every type of incentive that
government can create: cash, free land, tax abatements and credits,
money for roads, utilities and worker training. Some use a portion
of employees' state taxes to pay construction costs; some use a
portion of taxes the company would pay to local governments to
finance the project.
Among the more notable deals: •
Lewiston, Maine, provided Wal-Mart with $17 million in state and
local incentives in February 2002 for a 400,000-square-foot food
distribution center that is to employ 150 workers when it opens in
2005. The package, the largest Wal-Mart has received, included free
land and water and sewer improvements.
• Bartlesville, Okla., gave
Wal-Mart $9 million for an 893,000-square-foot food center that is
to employ 700 after it opens in 2004. Former Gov. Frank Keating
attended the groundbreaking, heralding the incentives and the
state's new right-to-work law for their part in attracting the
center.
• Pageland, S.C., provided $7
million for a food center that opened in 1997 and paid its workers
$8 an hour. Neighboring North Carolina bemoaned its inability to
compete with South Carolina, but in 2002, Wal-Mart opened centers in
Shelby and Henderson; in Shelby, Wal-Mart received $2.1 million.
Biggest offer: $46 million
But the king of deals came from
Killingly, a town of 16,400 on the Quinebaug River in northeast
Connecticut. It offered Wal-Mart $46 million for a 1.2
million-square-foot center that would have employed 1,000.
James Reck, a member of the town's
conservation commission, said opposition to the project first
focused on the proposed location and the effects of having hundreds
of trucks a day roll through town.
"The site was about a thousand feet
from an old-age home, maybe 2,000 feet from an elementary school,"
Reck said. "It was a bad spot altogether."
Reck filed freedom of information
requests with the town and the state seeking details of the
incentive package. What he found amazed him: a state grant for
buying equipment; funding for utilities and highway improvements;
tax credits and exemptions; no property taxes for five years;
enterprise zone credits; employee training and more.
"It was all a secret," Reck said.
"We just kind of blew the lid off it. The state of Connecticut is in
a terrible financial crisis. How can it give one of the largest
companies in the world $40 million when it's cutting funds to
schools?"
David Flanagan, an unemployed truck
driver who lives in the town, has a one-word answer: jobs.
Killingly's unemployment rate has
ranged as high as 7.3 percent, third highest in the state, Flanagan
says. The town has an industrial heritage, mostly making textiles,
and most of the population in the region is blue collar, so a
Wal-Mart distribution center would be perfect.
"There's this piece of land that's
undeveloped, a prime piece of land that Wal-Mart could use,"
Flanagan says. "All it would do is help bring in more business."
Flanagan, defending the hefty
incentive package, says the state would have reimbursed Killingly
for its portion, and other benefits offered would go to any business
that would go into that site.
Killingly's zoning board
effectively killed the deal in March, when it voted 4-1 against a
change in the property's zoning. Flanagan says there's still hope
that Wal-Mart will build a center, either at that site or in a
nearby town.
Little debate needed
There was little debate, however,
in Lewiston over the $17 million package that Wal-Mart received in
2002. "Certainly, there have been the occasional naysayers who say
the town paid too much," says Lincoln Jeffers, Lewiston's deputy
director of economic and community development. "We've had a
tremendous outpouring of support; the business community has
overwhelmingly spoken in its favor."
Much of the money is being spent on
projects the city had planned already, Jeffers says. It also was
needed to "level the playing field" with competitor sites.
Lewiston is the classic New England
town, its fortune based on mills powered by the fast-running waters
of the Androscoggin River. The Bates Mill, which helped clothe the
Army of the Potomac during the Civil War, once employed as many as
6,000 workers, making it Maine's largest employer.
As the economy sagged, employment
at the mill dropped to fewer than 100 by the 1990s. Lewiston leaders
turned the mill into a business park and have worked to diversify
the region's economy. The city has become a center for financial and
health-care services and other businesses; unemployment is about 4
percent, well below the national average. That raises the question
again: Why $17 million for a Wal-Mart distribution center?
"The reason why we're thriving is
because we are aggressive," Jeffers says.
But not all Wal-Mart projects
require incentives. The company paid full freight, and even helped
Raymond, N.H., buy a fire truck when it built a distribution center
there in 1996.
It turned down $1.3 million from
Apple Valley, Calif.; if it accepted government help, it would have
had to comply with the state's prevailing wage law while
constructing the building, which would have jacked up costs
substantially.
Support is widespread
Support for economic incentives is
widespread and crosses both party and ideological lines. But some
argue that incentives are corporate welfare and wasteful at a time
when many states are starved for cash.
Nebraskans for Peace and Justice, a
group founded in 1972 to oppose the Vietnam War, is debating whether
to move forward on a ballot initiative to end the state's tax-credit
program, which, it says has cost Nebraska $1.5 billion since 1987.
Wal-Mart is one the recipients: $5 million for a food center in
North Platte.
"They've cut programs for children,
for education, four straight times," says Tim Rinne, the group's
state coordinator, referring to the legislature. "Big business has
never been touched."
He doesn't oppose incentives
entirely but says they should be used sparingly.
Robert Lynch, chairman of the
economics department at Washington College in Chesterfield, Md.,
says factors other than incentives determine where businesses put
down roots: the cost and quality of the workforce, transportation,
cost of housing and quality of life, to name a few. To base the
decision on state and local taxes is "completely irrational.
"I don't know this for a fact, of
course, but I'd bet they've already decided where they want to go,"
Lynch says of Wal-Mart's proposed South Florida food distribution
center. "They're trying to get the best tax deal they can" for that
site.
Barry Atwood, an adjunct government
professor at Florida Atlantic University and finance director at
Fort Lauderdale-Hollywood International Airport, says incentives
work, but it's an unknown just how big a factor they play in a given
decision.
"Quite frankly, it's money that's
going to be spent anyway," Atwood says. "It's a matter of policy
priorities."
Officials in Macclenny, 15 months
after the Wal-Mart center opened, say their policy priority was the
right one. Few in the town of about 5,000 voice any complaints about
the center or the financial package given to Wal-Mart.
"It's been nothing but a plus for
us," says Ginger Baker, executive director of the Baker County
Economic Development Commission and the Baker County Chamber of
Commerce. "They're very, very good neighbors. The rest of the state,
where the economy depends on tourism or the airlines, is going
through a downturn. Our economy is booming."
david_sedore@pbpost.com
[back to top]
Wal-Mart settles EEOC complaint
L.M. SIXEL
[back to top]
23 August 2003
Wal-Mart Stores has agreed to pay
$140,000 to a black worker whose complaint led to a lawsuit accusing
the giant retail company of paying black employees who unload trucks
and stock shelves less than Anglo and Hispanic workers.
Under terms of the agreement with
the Equal Employment Opportunity Commission, Wal-Mart will pay Billy
Simmons, 61, who made the complaint after being passed over for a
promotion at the company's Webster store. It will also pay $3,500
that the EEOC will divide between two to four black employees who
had received lower raises.
Also, Simmons, who worked at the
Webster store for six years, agreed to quit.
Wal-Mart did not admit that it
violated any civil rights laws. It also specifically denied all of
the allegations by the EEOC and Simmons that it discriminated
against employees based on race, according to the consent decree
signed by Judge Nancy Atlas earlier this week.
Tim Bowne, the EEOC attorney in
charge of the case, said the standard annual raise for unloaders was
4 percent to 5 percent.
Although black unloaders didn't
receive a boost of more than 5 percent, some of the Hispanic and
white workers got raises in the 15 percent to 27 percent range,
Bowne said.
In one year, one of the Hispanic
unloaders earned $50,000, more than twice as much as Simmons, Bowne
said.
Simmons wasn't given as many
overtime hours as some of the Hispanic unloaders, he said.
Black unloaders also started at $7
to $9 an hour and never went beyond $10 an hour, Bowne said.
Hispanic and white unloaders, however, started at a higher wage
level and got up to $11 and $12 an hour.
Simmons' attorney, Ronald Reynolds,
said he couldn't comment because of a separate confidentiality
agreement with Wal-Mart.
Wal-Mart spokesman Tom Williams
also said he couldn't comment because of the confidentiality
agreement.
[back to top]
Wal-mart Urged to Establish Trade
Unions in China
Xinhua
[back to top]
August 26, 2003
Wal-mart, the world's biggest
retailer, is facing pressure in China to establish trade unions for
thousands of employees.
The All-China Federation of Trade
Unions (ACFTU), claims the retail giant had ignored repeated efforts
by its staff to talk to the company about setting up trade unions.
"We have contacted Wal-mart several
times since its branch store opened in Beijing in July, but no
progress has been made in establishing trade unions," said Feng
Lijun, local ACFTU official.
According to ACFTU officials, they
were told by Wal-mart, whichhas not set up trade unions in any of
its branches in China, that Wal-mart had established effective
channels to resolve labor disputes and there were no trade unions in
its United States stores either.
As opposed to most western
countries, Chinese workers, including employees of foreign-funded
enterprises, usually join trade unions affiliated to their
companies. Only a small number of staff of foreign-funded
enterprises can join trade unions affiliated to the Foreign
Enterprises Service Corporation (FESCO),said Wang Ying, ACFTU
official.
According to ACFTU statistics, most
foreign-funded supermarkets in Beijing have not established trade
unions, which means hundreds of their employees can not become
members of the ACFTU.
Feng said it was very hard for
individual workers to protect their legal rights without support,
especially in foreign companies.
"The best way to protect workers
rights is to sign group contracts with employers through trade
unions, which can protect workers' rights involving wage
negotiation, vacations, and discharge regulations."
According to Chinese laws, all
workers have the right to join a trade union, but companies are only
required to allow the establishment of a union if more then three
workers request it.
Some foreign-funded companies
explained that they did not receive workers' requests to have trade
unions to join, so they did not think it necessary to establish
trade unions.
Although many employees of
foreign-funded enterprises wish to join a trade union, they did not
want to express their hopes in public, mainly because of concerns
over the safety of their jobs, said ACFTU officials.
In Beijing, only 2000 of Beijing's
5000 foreign enterprises have established trade unions. Most foreign
enterprises with trade unions are joint ventures, whose trade unions
were transferred from the former Chinese factories.
China has revised labor laws to
protect workers' rights and punish companies that prevent workers
from joining their trade union. "However, we are still facing
difficulties in establishing branches of ACFTU in foreign-funded
companies like Wal-mart due to their reluctance to be cooperative,"
said Wang Ying.
The ACFTU was established in 1925
and boasts over 131 million members across the country. (Xinhua )
[back to top]
Wal-Mart opens wallet in effort to
fix its image
Constance L. Hays, New York Times
[back to top]
Thursday, August 14, 2003
Wal-Mart, concerned about its
public image, is using a consultant to analyze that image and has
commissioned radio and television ads to try to reverse criticism
from local officials, consumers and others.
It is the first time that Wal-Mart,
known for parsimony in its business practices, has invested in
reputation research -- using polling techniques, focus groups and
phone interviews -- and then spent more money to try to repair the
distressing aspects of what it found.
The project began about two years
ago at the suggestion of Wal-Mart board members, a company spokesman
said, and is continuing. Regular updates are being given to the
board, with one scheduled next month. The company's relationships
with consumers, employees, bankers and community leaders have all
been examined by the consultant, Fleishman-Hillard, a part of the
Omnicom Group. Last but not least will be its ties to suppliers, who
make and deliver billions of dollars' worth of goods to Wal-Mart
stores.
Such an effort indicates concern at
Wal-Mart's highest levels about fallout from the company's rapid
growth and enormous economic influence. With that ascent has come
scrutiny of Wal-Mart's penchant for hiring part-time workers as well
as its treatment of female employees, the subject of a pending
federal lawsuit, and its resistance to organized labor.
Community opposition to building
Wal-Mart stores has been vociferous in some places, and muttering is
heard from time to time among manufacturers, who say they are being
constantly pressed to sell their goods to Wal-Mart at low prices.
The project found that many people
view Wal-Mart as a place of dead-end jobs and that its performance
as a corporate citizen leaves much to be desired.
"They didn't see us as involved in
the community as they might like," Wal- Mart's chief spokesman, Jay
Allen, said. "They didn't give us good marks on listening. Sometimes
it was as basic as the parking lot was not clean, and that's not
treating the community with respect."
To reverse the impression about its
jobs, Wal-Mart is broadcasting three ads nationwide that portray it
as a great place to work. Two of the ads feature women who work at
Wal-Mart discussing their job satisfaction. "They give you
opportunity to advance," says one, a black department manager who
persuaded her daughter to give Wal-Mart a try.
Another, a white mother of two who
is a district manager in charge of several stores, says, "It's not
easy to have a career and a family, but my job makes it a lot easier
to do both." As the camera pans over her tranquil home, she says she
hopes to "set a good example for my boys, that they can go out and
achieve absolutely anything."
The ads, produced by GSD&M of
Austin, Texas, also part of Omnicom, are appearing at a time when
Wal-Mart is on the defensive over its treatment of female employees.
A group of them filed a discrimination lawsuit against the company
18 months ago in federal court in Washington, and a hearing to
determine whether the suit should become a class action, covering
all of the women working at Wal-Mart, has been scheduled for next
month.
So far, the television ads have
focused on correcting what Wal-Mart maintains is a false impression
about its employment record. But a lawyer for the plaintiffs said he
thought the ads were a direct result of the lawsuit.
"The telling thing is that the ads
are even here," the lawyer, Joseph Sellers, said. "My sense is that
Wal-Mart has never run ads like this before and that the timing is
more than coincidental." The lawsuit includes accounts from many
women, he said, who claim that they were told that "they were
unsuited to management," and from others "who said they were told
that, 'The hours are too long. You should be home with your
children.' "
Allen insisted that the research,
rather than the lawsuit, prompted the ads featuring the women. But
he added: "We would acknowledge that we need to get better as an
employer. The lawsuit has certainly heightened our awareness of
that."
Among bankers, Allen said,
Wal-Mart's image included problems that some consumers and local
officials had cited, including low-paying jobs. "But it didn't
really have an impact on the way they looked at Wal-Mart as an
investment," he said. "Their questions were: Can Wal-Mart continue
to grow in the United States, and are we well positioned to
capitalize on the international opportunities that we have?"
Wal-Mart workers generally gave the
company high marks, Allen said. But pay and benefit levels did not
get much applause. "People always want to make more money," he said.
"Really, what you see for the most part is people want to be treated
well. They want to be treated fairly. They want to develop on the
job."
The lawsuit contends that women
were often overlooked or ignored when it came time to promote
cashiers and others to management positions. In January, Sellers
said, the company began its first formal system for inviting people
to apply for vacancies in an important management-training program.
His attempts to find out more about the program were batted away by
company lawyers, who said it was "attorney work product" and
therefore not to be offered as part of discovery.
"It was clear that they were
inaugurating this with the help of lawyers," Sellers said. "The fact
that they had such a program is a good first step, but it is hardly
more than that. They have shielded it from scrutiny by us."
More television ads are planned
around other findings from the Fleishman- Hillard research, Allen
said. Among the positives were that many people think Wal-Mart has a
good reputation and that "we were easily the first retailer you
think of with low prices," he said. "Even people who don't like us
or respect us would not argue that we have the lowest prices."
The negatives, though, also caught
everyone's attention at the company's highest levels and are now
pushing it to make changes.
[back to top]
Wal-Mart, Worry About Substance,
Not Image
Jon Talton Republic columnist
[back to top]
Aug. 17, 2003 12:00 AM
Dear Wal-Mart: So you're finally
concerned about your image. For two years, you've paid a public
relations firm to research your reputation with consumers,
employees, bankers and community leaders. And, according to the New
York Times, "The project found that many people view Wal-Mart as a
place of dead-end jobs, and that its performance as a corporate
citizen leaves much to be desired."
Now you're commissioning TV and
radio ads to try to repair your image. It won't be the first time
that executives confused image and substance. Since you've asked,
let me tell you why I won't shop at Wal-Mart.
It comes down to those "heartland
values" you talk about.
A lack of them.
Fair play is a heartland value. But
Wal-Mart is known for clear-cutting the retail landscape. Competing
national stores won't even consider locating within three miles of a
Wal-Mart Supercenter, and local retailers go out of business.
Suppliers are bullied for "everyday low prices," with the result
being that many have been forced from business.
Speaking of fair, you're the
nation's largest employer, with a million "associates." But
relatively few work 40-hour weeks, and a union cashier at Safeway or
Albertson's can make twice as much as one of your checkers. Nor is
it easy for someone making seven bucks an hour to afford your
"pay-for-it-yourself" benefits.
You're facing employee lawsuits.
One is from a group of female workers who filed a discrimination
suit in federal court in San Francisco. A hearing next month will
determine whether it should become a class action covering all women
working for Wal-Mart.
Community is a heartland value I
always admired. But actual communities, as opposed to the marketing
propaganda use of the term, often lose some of their most important
assets because of Wal-Mart. Main streets and city squares around
America have been turned into ghost towns by Wal-Mart.
The damage has been more than
aesthetic: Local companies are more likely to invest in their towns
and mentor future leaders with a strong community spirit. Teenage
Harry Truman worked in the corner drugstore, not the Wal-Mart
Superstore.
Even the suburbs are getting testy.
Chandler and south Scottsdale neighborhoods are only the latest to
worry about the effect of a 200,000-square-foot store, broiling
surface parking lot, traffic tie-ups and destruction of nearby
retailers.
Communities are in fiscal crises in
part because of rising bills for public health services. Much of
this comes from part-time workers who have no choice but to turn to
a program such as AHCCCS.
Wal-Mart, I turned away from you
with some sadness. I spent a few years near Sam Walton country, and
I can understand his dream of giving small towns a retail choice
they never enjoyed. But that was then. Walton's dream has grown into
a killer of choice.
Why? Your business model never
bumped up against the public policies that would keep the free
market healthy. Regulations that say you can't control the supply
chain and dictate the prices that will kill off your competitors.
Laws that give unions a fair chance to organize workers. Zoning that
protects the civic health of communities.
If it had, you'd still be
profitable. And you wouldn't be so worried about your image.
Reach Talton at
jon.talton@arizonarepublic.com or (602) 444-8464.
[back to top]
Anecdotes Abound in Wal-Mart
Discrimination Case
By Mark Friedman
[back to top]
Arkansas Business
8/18/03
For years, Christine Kwapnoski
dreamed of becoming manager of one of Wal-Mart's Sam's Club stores.
Kwapnoski, who began working for Wal-Mart Stores Inc. of Bentonville
in 1986 when she was 22, said she didn't know how to apply for a
promotion from her position as cashier and never saw any openings
posted around the store. But the Concord, Calif., woman said she
constantly hounded her supervisors for the chance.
She watched as mostly male
co-workers were plucked from the hourly positions into management
slots. Kwapnoski's attorneys say her experience was all too typical
at Wal-Mart. The company prefers to promote men over women, her
attorneys charge Kwapnoski is one of seven women who have filed suit
against Wal-Mart, alleging the Bentonville retailer also
discriminates against women by not paying them the same as men.
"What we saw operating at Wal-Mart was reminiscent of the way large
businesses did things 30 or 40 years ago rather than in the new
millennium," said Joseph Sellers of Cohen Milstein Hausfeld & Toll
of Washington, D.C., one of six law firms working on the women's
case.
The women want their case to
receive class-action certification so the approximately 1.5 million
women who worked for Wal-Mart at any time since Dec. 26, 1998, could
be part of the suit. Wal-Mart has opposed the move, saying the class
would be too large to manage. A federal court judge in San Francisco
is expected to hear an argument on the issue on Sept. 24. If the
judge approves the plaintiffs' request, the case would become the
largest employment discrimination lawsuit ever in the country.
Wal-Mart vigorously denies the
allegations of sexual discrimination. "Wal-Mart is a great place for
women to work, and isolated complaints do not change this fact,"
said Mona Williams, Wal-Mart's vice president for communications.
"Wal-Mart does not tolerate discrimination against women or anyone
else."
In 1997, Home Depot, without
admitting wrongdoing, settled a sex discrimination suit covering
25,000 female employees for $104 million. If it loses, Wal-Mart
could face monetary penalties that could potentially be in the
billions of dollars. The plaintiffs' attorneys haven't mentioned a
figure for punitive damages in the lawsuit, and they also are
seeking an unspecified amount of money for back pay.
Meanwhile, the complaint is
attracting unwanted attention for the world's largest company. On
July 25, the California chapter of the National Organization for
Women protested outside of a Wal-Mart in San Leandro, Calif. And NOW
launched an "adopt-a-store" campaign, which is sending its activists
into Wal-Mart stores to report to customers about the allegations in
the lawsuit. As a result of the lawsuit, filed in 2001 in U.S.
District Court in San Francisco, Wal-Mart has "picked up the pace"
and now posts all open management positions in its stores, Williams
said.
After years of waiting, Kwapnoski
finally entered the management training program in March. "That's
not surprising because companies often engage in what I call lawsuit
conversions," Sellers said. "They try to do something for the people
who brought the case in the hope that it will make them look less
bad when they get to trial. It doesn't mean these women didn't
deserve it, but they deserved it a long time ago." Culture Attorney
Sellers blames Wal-Mart's culture for perpetuating stereotypes about
women and their aptitudes. Women were always welcome to work as
cashiers, he said, "but there was a profound mistrust of the fitness
of women to serve in management."
One former vice president of
marketing for the Sam's Club division, Rhonda Harper, who was hired
from outside the company, described the Wal-Mart culture as a "very
tight, deep culture" and "very closed," according to court papers
filed in the case on behalf of the women. "I didn't go hunting with
them. I didn't go fishing with them," Harper said in a deposition
taken for the case. "I wondered if I had been able to do some of the
outings if I might have assimilated more quickly into the
organization." At the regular Monday executive-level Sam's Club
meetings, senior management often referred to the women associates
in the stores as "little Janie Qs" and "girls," Harper said. When
Harper objected to the terms, "her criticism was not well received
and there was no change in the regular use of the demeaning label,"
plaintiffs' attorneys Jocelyn Larkin and Christine Webber said in
court filings. Other women also complained about some of the
behavior of Wal-Mart management.
Melissa Howard, 35, of
Indianapolis, said she became a store manager in Decatur, Ind., in
June 1998, but was the only female store manager in the district.
Occasionally, she said, the district manager held lunch meetings at
Hooter's restaurants, where female servers wear revealing uniforms.
"During the meeting, I was forced to listen to lots of discussion
among the male managers about the waitresses' breasts and butts and
which sexual experience they would like to have with them," Howard
said. "While it was humiliating to be there, I was reluctant to
complain. I knew from attending the annual company meetings that the
male managers often went out together to strip clubs after the
meeting. It seemed to me to be an accepted part of the culture."
One top-level executive defended
the practice of scheduling the lunch meetings at Hooters. Coleman
Peterson, executive vice president for people, the company's term
for human resources, at Wal-Mart, said it was appropriate for a
Wal-Mart district meeting to be held there, if it is considered to
be the "restaurant du jour" and "one of the best places to meet and
eat" in town, according to court papers the women filed. Williams,
the Wal-Mart spokeswoman, said only one woman in the 110 statements
filed by women in the case complained about having business meetings
at Hooters. "Wal-Mart would not find business meetings at Hooters
acceptable," she said. "That's not who we are. That's not how we
think." Pay Wal-Mart's corporate headquarters in Bentonville
controls everything from the music in the stores to the temperature,
but it doesn't monitor what it pays its employees, Sellers said.
The plaintiffs hired Richard Drogin
of Drogin Kakigi & Associates of Berkeley, Calif., to study payroll
information for each employee between 1996-2001. Drogin found that,
for nearly every job, women earned less than men holding the same
jobs in every year since 1996. Among hourly workers, women earned
about $1,000 less than did men in 2001, his report said. And in
management positions, women earned an average of $14,500 less. The
differences in pay between men and women could not be explained by
seniority or turnover, he said. Women have longer average tenure
(4.47 years) than do men (3.13 years) and lower turnover. As for
performance, women in hourly positions had sli ghtly higher average
performance ratings than did men, Drogin's report said. Wal-Mart
disagrees with the conclusions of his report. "Our expert had the
same information available and came up with different results,"
Williams said.
Wal-Mart's expert found in hourly
pay, there is no pattern adverse to women and many stores favor
women, according to Wal-Mart's attorneys' statements filed in court
papers. "Plaintiffs' positions — that all 3,244 store mangers can be
deemed discriminators, and 1.5 million women victims — is
incorrect," Wal-Mart said. "At worst, bias exists (if at all) at
only a few stores … If Plaintiffs prevailed, women who were not
discrimination victims would be unjustly compensated." Still, the
plaintiffs' attorneys blame the discrepancy on the managers, who set
pay for each hourly employee.
Company guidelines authorize store
managers to adjust starting pay by as much as $2 per hour."But
Wal-Mart provides no guidance on what circumstances would justify
such an adjustment," Larkin and Webber said in the motion to have
the case certified as a class action. "Without proper criteria,
inappropriate gender-based factors therefore can, and do, affect any
decisions."Sellers said he was shocked to learn that Wal-Mart never
studied employee pay before the lawsuit was filed. "They study
everything," he said. "They apparently have this striking lack of
curiosity about something as basic as whether there is a pay
difference [based on] gender or race."
Promotions One way out of the
low-pay positions at Wal-Mart is through promotions to management.
But Wal-Mart had a very subjective process on who was selected, and
it was systematically disadvantageous to women, Larkin and Webber
said. Store managers are allowed to apply their own criteria when
selecting candidates. "Such unwritten, subjective criteria are
particularly vulnerable to the influence of stereotypes," Larkin and
Webber said.
Until January 2003, Wal-Mart did
not post openings for the management training program, nor did it
have any system available for employees to express an interest in
the program, Larkin and Webber said. The plaintiffs say this
resulted in women being disproportionately employed in lower-paying
jobs. They hold about 65 percent of the hourly jobs but only 33
percent of the management positions — "a pattern that is consistent
in all 41 regions across the country," Drogin said. "Many senior
managers testified that they had no reason to believe that women are
less interested in management than are men," Larkin and Webber said.
"Indeed, they were at a loss to explain why so few women held
management positions." Earlier this year, Wal-Mart implemented a
one-time-only opportunity for employees to express an interest in
the management training program. Employees were given only one week
to apply, Larkin and Webber said. When the plaintiffs' attorneys
sought discovery of the documents explaining the development of the
new "program," Wal-Mart claimed attorney-client privilege.
Disagreeing with the plaintiffs'
study, Williams said Wal-Mart promotes women at the same rate they
apply for jobs. For example, if 50 assistant manager positions are
open and half of the applicants are women, then women should get
half of those jobs, she said. "And we've actually done better than
that," Williams said.Winning If the plaintiffs are going to prevail,
they are going to have to show that Wal-Mart engaged in a pattern
and practice of discrimination with respect to compensations and
promotions.
Some of the key issues will be
Wal-Mart's work force data, comparing pay men and women receive who
were performing the same jobs during the same time period in the
same places, Sellers said. The case will also hinge on examining men
and women who were eligible for promotion and who got promoted and
who didn't. Sellers said he and the team of lawyers also are going
to have to prove managers had discriminatory attitudes that kept
women out of management. "We have a lot of evidence suggesting that
senior-level managers and mid-level managers viewed women in a
demeaning manor," he said. A trial is probably more than a year
away.
Meanwhile, the attorneys' fees are
rising. Sellers wouldn't say what the fees are other than to
characterize them as "substantial." "This is clearly an expensive
case on both sides," he said. "We've confronted a very vigorous
defense, and it's forced us to spend a lot of time and resources to
put our case together." Even if Wal-Mart wins the case, it could
suffer a blow to its image. Several newspapers and magazines across
the country have written about the lawsuit, with several mentioning
the Hooters meetings. And NOW, armed with the reports supplied by
the plaintiffs' attorneys, vows to spread the word inside Wal-Marts.
While NOW isn't calling for a boycott, consumers will be urged to
shop elsewhere, said Rachel Allen, the California NOW spokeswoman.
NOW already had given Wal-Mart its "Merchant of Shame" award for not
paying its workers enough, NOW said. Williams said she was surprised
NOW turned its back on Wal-Mart. "This company has done more to
raise the standard of living for women and families than any other
single entity in this country," Williams said.
Average Earnings by Gender for 2001
Job Men Women Difference
Regional
Vice President $419,435 $279,772 $139,663
District Manager $239,519
$177,149 $62,370
Store Manager $105,682 $89,280 $16,402
Co-Manager $59,535 $56,317 $3,218
Assistant Manager $39,790 $37,322 $2,468
Management Trainee $23,518 $22,371 $804
Department Head $23,518 $21,709 $1,809
Sales Associate $16,526 $15,067 $1,458
Cashier $14,525 $13,831 $694
Average Tenure Average years since
date of hire full-time active employees at year-end 2001
Category Men Women
Total 3.13 Yrs. 4.47 Yrs. All
Hourly 2.76 4.39 All Salary 6.69 7.39 Sales Associates 2.53 3.41
Department Manager 5.29 7.49 Cashier 1.86 2.53
Source: Drogin Kakigi and
Associates of Berkeley, Calif., filed by plaintiffs' attorneys in
U.S. District Court in San Francisco. E-mail article to a friend
[back to top]
WAL-MART Muzzling Critics
St. Louis
Post-Dispatch editorial
[back to top]
08/15/2003
WAL-MART'S EMPLOYMENT practices
are a legitimate matter for public debate, as much as Wal-Mart may
wish otherwise. That's why it's wrong in its attempt to bully St.
Louis radio stations into dropping ads sponsored by a union critical
of the retail colossus.
Wal-Mart, which likes to wrap
itself in the flag, should have more appreciation for a certain
bedrock American value: free speech.
Wal-Mart is the biggest retailer in
America. It employs nearly a million people. When the great ship
Wal-Mart sails into town, smaller competitors are often swamped in
its wake. Some sink forever.
Wal-Mart is also firmly anti-union.
It has fought off organizing efforts from coast to coast, prompting
allegations that it intimidates and fires pro-union employees. In
lawsuits filed in dozens of states, Wal-Mart is also accused of
denying workers overtime pay. Last December, an Oregon jury found
Wal-Mart liable.
All that makes Wal-Mart's behavior
a matter of broad public concern.
Frustrated in their organizing
efforts, unions are trying to give Wal-Mart a black eye through bad
PR. The United Food and Commercial Workers Union in St. Louis bought
radio ads saying, among other things, that only a third of Wal-Mart
workers have health insurance. That's not true, Wal-Mart says. It
claims that half its workers are insured through the company, and
many others get health coverage elsewhere. A company lawyer wrote
the stations a letter demanding that the ads be stopped. The
unstated implication, of course, is that a costly lawsuit will
follow unless the stations kowtow.
Let's draw a distinction here. The
union isn't selling used cars or a pill to make you look like Arnold
Schwarzenegger.
Rather, the union is advocating a
position on a matter of public concern. Free and open debate is in
the public interest, and the debate needs some breathing room. Free
speech should be protected, even if there are conflicting versions
of the truth being aired.
The legal situation is a bit murky.
Sandy Davidson, who teaches communications law at the University of
Missouri, says that the station is taking a risk if it continues to
run the ad after being told it is inaccurate. It could be sued for
repeating a libel. Obviously, a radio station doesn't have an easy
way to determine how many Wal-Mart workers really have health
insurance.
Other lawyers think the station is
on safer legal ground. But is a station manager, who knows the name
of the game is pleasing advertisers, going to take the chance? Can a
company that wants to knock its opponent off the radio merely have
its lawyer write an ominous letter?
That's not right. Radio stations
already enjoy broad protection for ads sponsored by federal
political candidates. We should expand that protection to ads on all
public issues. If statements are libelous, the victims should sue
the people that sponsored the ad. It shouldn't be easy to shut
people up.
[back to top]
Wal-Mart Workers Awaiting Union
Ruling
Patti Edgar
[back to top]
15 August 2003
Winnipeg
Free Press
Residents of a northern Manitoba
community will have to wait longer to find out if Thompson will be
on the map for having the only unionized Wal-Mart in North America.
The Manitoba Labour Board wrapped
up two days of hearings Wednesday that could determine the fate of a
union drive at Thompson's Wal-Mart.
The three-person panel heard
arguments in City Hall from both the company and Canada's United
Food and Commercial Workers Union on two issues.
The company and the union disagree
on exactly who should be in the bargaining unit -- about 10 of the
150 employees who cast votes in July are up for dispute.
Wal-Mart is also disputing the
conduct of the voting process, arguing a Canadian Broadcasting
Corporation cameraman filming in a store parking lot may have
influenced voters.
The panel returned to Winnipeg
yesterday to deliberate but haven't set a deadline to come up with a
decision.
The votes were cast by Wal-Mart's
staff at the end of July after a door-to-door union drive by the
UFCW's Local 832. The union represents 16,000 people in Manitoba,
including Safeway and Westfair staff.
Wal-Mart is not commenting on the
union drive, but UFCW continues to predict the union's success.
"We are confident of the outcome.
It would have been nice if the board decided, 'Let's open the box
and get this show on the road'," said spokesman Michael Forman.
If the drive is successful, it
would create momentum across Canada and in the U.S. to unionize more
stores and improve working conditions for the giant retailer's 1.4
million employees, he said.
Graham Starmer, president of
Manitoba Chambers of Commerce, believes a successful union drive at
the Wal-Mart would only draw attention to a working environment in
Manitoba that he says unfairly favours unions.
The province should be trying to
attract businesses and investment to Manitoba, not drive them away,
he said.
patti.edgar@freepress.mb.ca
[back to top]
Wal-Mart, Aware Its Image Suffers, Studies Repairs
By CONSTANCE L.
HAYS
[back to top]
August 14, 2003
Wal-Mart, concerned about its public image, is
using a consultant to analyze that image and has commissioned radio
and television ads to try to reverse criticism from local officials,
consumers and others.
It is the first time that Wal-Mart,
known for parsimony in its business practices, has invested in
"reputation research" — using polling techniques, focus groups and
phone interviews — and then spent more money to try to repair the
distressing aspects of what it found.
The project began about two years
ago at the suggestion of Wal-Mart board members, a company spokesman
said, and is continuing. Regular updates are being given to the
board, with one scheduled next month. The company's relationships
with consumers, employees, bankers and community leaders have all
been examined by the consultant, Fleishman-Hillard, a part of the
Omnicom Group. Last but not least will be its ties to suppliers, who
make and deliver billions of dollars' worth of goods to Wal-Mart
stores.
Such an effort indicates concern at
Wal-Mart's highest levels about fallout from the company's rapid
growth and enormous economic influence. With that ascent has come
scrutiny of Wal-Mart's penchant for hiring part-time workers as well
as its treatment of female employees, the subject of a pending
federal lawsuit, and its resistance to organized labor.
Community opposition to building
Wal-Mart stores has been vociferous in some places, and muttering is
heard from time to time among manufacturers, which say they are
being constantly pressed to sell their goods to Wal-Mart at low
prices.
The project found that many people
view Wal-Mart as a place of dead-end jobs, and that its performance
as a corporate citizen leaves much to be desired. "They didn't see
us as involved in the community as they might like," Wal-Mart's
chief spokesman, Jay Allen, said. "They didn't give us good marks on
listening. Sometimes it was as basic as the parking lot was not
clean, and that's not treating the community with respect."
To reverse the impression about its
jobs, Wal-Mart is broadcasting three ads nationwide that portray it
as a great place to work. Two of the ads feature women who work at
Wal-Mart discussing their job satisfaction. "They give you
opportunity to advance," says one, a black department manager who
persuaded her daughter to give Wal-Mart a try.
Another, a white mother of two who
is a district manager in charge of several stores, says, "It's not
easy to have a career and a family, but my job makes it a lot easier
to do both." As the camera panned over her tranquil home, she said
she hoped to "set a good example for my boys, that they can go out
and achieve absolutely anything."
The ads, produced by GSD&M of
Austin, Tex., also part of Omnicom, are appearing at a time when
Wal-Mart is on the defensive over its treatment of female employees.
A group of them filed a discrimination lawsuit against the company
18 months ago in federal court in Washington, and a hearing to
determine whether the suit should become a class action, covering
all of the women working at Wal-Mart, has been scheduled for next
month.
So far, the television ads have
focused on correcting what Wal-Mart maintains is a false impression
about its jobs. But a lawyer for the plaintiffs said he thought the
ads were a direct result of the lawsuit.
"The telling thing is that the ads
are even here," the lawyer, Joseph Sellers, said. "My sense is that
Wal-Mart has never run ads like this before, and that the timing is
more than coincidental." The lawsuit includes accounts from many
women, he said, about being told that "they were unsuited to
management," and from others "who said they were told that the hours
are too long, you should be home with your children."
Mr. Allen, the Wal-Mart spokesman,
insisted that the research, rather than the lawsuit, prompted the
ads featuring the women. But he added: "We would acknowledge that we
need to get better as an employer. The lawsuit has certainly
heightened our awareness of that."
Among bankers, Mr. Allen said,
Wal-Mart's image included problems that some consumers and local
officials had cited, including low-paying jobs. "But it didn't
really have an impact on the way they looked at Wal-Mart as an
investment," he said. "Their questions were: Can Wal-Mart continue
to grow in the United States, and are we well positioned to
capitalize on the international opportunities that we have?"
Wal-Mart workers generally gave the
company high marks, Mr. Allen said. But pay and benefits did not get
much applause. "People always want to make more money," he said.
"Really, what you see for the most part is people want to be treated
well. They want to be treated fairly. They want to develop on the
job."
The lawsuit contends that women
were often overlooked or ignored when it came time to promote
cashiers and others to management positions. In January, Mr. Sellers
said, the company began its first formal system for inviting people
to apply for vacancies in an important management-training program.
His attempts to find out more about the program were batted away by
company lawyers, who said it was "attorney work product" and
therefore not to be offered as part of discovery.
"It was clear that they were
inaugurating this with the help of lawyers," Mr. Sellers said.
A Wal-Mart spokeswoman, Sarah
Clark, called the January change "an enhancement" to a program
already in place.
More television ads are planned
around other findings from the Fleishman-Hillard research, Mr. Allen
said. Among the positives were that many people think Wal-Mart has a
good reputation and that "we were easily the first retailer you
think of with low prices," he said. "Even people who don't like us
or respect us would not argue that we have the lowest prices."
The negatives, though, also caught
everyone's attention at the company's highest levels and are now
pushing it to make changes.
"We need to do these things," Mr.
Allen said. "At the same time, we can't change who we are. We can't
change what makes Wal-Mart Wal-Mart."
[back to top]
Wal-Mart Discrimination Case Has
Revolving Door
By Susan Beck
[back to top]
5 August 2003
The
Recorder
It could be the largest employment discrimination case
ever.
Dukes v. Wal-Mart Stores, 01-2252,
alleges that the nation's leading private employer denies equal pay
and promotions to women. With more than 700,000 possible plaintiffs,
and damages that could run into the billions, it's a plum of a case.
But behind the scenes, Wal-Mart's
defense team may have hit some bumps in the road. Even before a
class certification hearing was held, two major law firms had exited
the case.
When the complaint was filed in
U.S. District Court for the Northern District of California in San
Francisco in June 2001, Wal-Mart was represented by veteran
employment lawyer Gilmore Diekmann Jr., of Seyfarth Shaw's San
Francisco office.
Soon after, Wal-Mart brought in
Jones Day, which it selected as lead counsel after interviewing
several firms. The team was led by the coordinator of Jones Day's
litigation group, Cleveland partner John Strauch. In April 2002,
Seyfarth formally withdrew.
Then, in December, Paul, Hastings,
Janofsky & Walker partner Nancy Abell entered the fray and took the
lead. Four months later Jones Day filed a motion to withdraw, which
the court granted.
A Wal-Mart spokeswoman says the
company does not discuss its selection of counsel. Likewise, none of
the defense attorneys would comment on the switches.
Lead plaintiffs lawyer Brad
Seligman claims these changes have helped his clients. Seligman, who
heads a Berkeley foundation called The Impact Fund, notes that Paul,
Hastings had the unenviable task of parachuting into a discovery
process that was almost over. "They had enormous catch-up they had
to do," he said.
The firm had less than a month to
prepare for the depositions of some senior executives.
"We were quite pleased with how the
last set of depositions went," Seligman says.
"We don't see it that way,"
responds Wal-Mart spokeswoman Mona Williams.
Of course, none of this will make
any difference if Wal-Mart can defeat class certification. A hearing
on this issue, originally set for July 25, has been pushed back to
Sept. 24.
Susan Beck is a senior writer for
The American Lawyer magazine and is based in San Francisco. Her
e-mail address is sbeck@amlaw.com.
[back to top]
RETAILER CHALLENGES OREGON CITY
4 August 2003
[back to top]
The Oregonian SUNRISE
OREGON CITY Summary: An appeal says
planners misread traffic effects, land- use needs and more in
rejecting a zoning request
Round 2 of Wal-Mart vs. Oregon City
begins on Sept. 3.
That's when the City Commission
expects to hear Wal-Mart's appeal of a Planning Commission decision
that denied land-use changes requested by the company.
The Planning Commission in June
said Wal-Mart had failed to show the city needs more commercial land
and more retail services, and didn't adequately address potential
traffic problems.
Wal-Mart wants to build on 14 acres
on Molalla Avenue directly across from Hilltop Mall. Twelve acres
are in a commercial zone, but Wal-Mart said it must have 2 acres
that now are zoned for housing.
In an appeal filed Friday, Wal-Mart
says the June decision was flawed because the Planning Commission:
* Came to the wrong conclusions
about the effect of traffic and the amount of land the city needs
for housing, and also overlooked the lack of large vacant retail
sites in Oregon City.
* Disregarded the potential
benefits such as new jobs, increased tax revenue, road improvements
and consumer demand for the low- priced products the store will
sell.
* Failed to consider conditional
zoning, which would link the residential zone change to Wal-Mart's
project. The residential zoning would change only if Wal-Mart built
the store.
Portland lawyer Greg Hathaway, who
represents the company in Oregon, declined to comment on the appeal.
Wal-Mart also said its store would
replace Dale's Auto Wrecking - - an eyesore the city would like to
eliminate.
The Younger family of Oregon City,
which owns the wrecking yard and some of the residential land, also
filed an appeal. The Younger appeal includes some of the issues
Wal-Mart raised.
Bob Stacey, executive director of
1000 Friends of Oregon, a land- use group, said Wal-Mart faces an
uphill fight.
"Land-use law in Oregon puts a high
priority on making sure there is an adequate supply of buildable
land for housing needs inside urban growth boundaries," Stacey said.
Wal-Mart also is appealing a denial
by the Hillsboro Planning Commission and faced opposition in Hood
River, Lebanon, Salem, La Grande and Central Point.
"In case after case, small Oregon
cities are deciding the adverse effects of super-sizing it outweigh
the advantage of getting the store," Stacey said.
[back to top]
Manufacturers Accuse Retailers of Damaging Economy by Selling
Chinese Goods
By Rob Varnon, Connecticut Post,
Bridgeport Knight Ridder/Tribune Business News
3 August 2003
[back to top]
Aug.
3--A group of Connecticut manufacturers Friday charged America's
largest retailers with compounding the manufacturing crisis by
selling large amounts of Chinese-made products.
Wal-Mart spokesman Bill Wertz said
the company buys its products from American manufacturers whenever
it can, but its first concern is for the consumer.
"We want to make [our customers']
hard-earned money go as far as it can," Wertz said.
Wal-Mart was among a handful of
large retailers mentioned by manufacturers who were venting their
anger during a rally Friday in New Britain.
Bruce Thompson, vice president of
Projects Inc. of Glastonbury, said the Chinese are "attempting to
crush us economically" by flooding the American market with cheap
goods and destroying the manufacturing sector in the United States.
He said Wal-Mart, Target and other big box stores aren't helping by
selling Chinese goods. Thompson and other manufacturers started MAD
in the USA, a group that is proposing a slew of governmental
policies that includes a Buy American campaign.
The group was formed to come up
with policies to reverse national trends in the sector.
Manufacturing has lost more than 2 million jobs in the last two
years and has seen 34 consecutive months of job declines, according
to both government and private sector reports. One of the group's
proposals is to label all products that sell for more than $15 with
information on where the product and its components are made.
According to the group, some products may be mislabeled "Made in
America" because the products are assembled in the United States,
when the majority of the components are made in other countries.
But Wertz said one of the problems
Wal-Mart faces is that there aren't American companies that can
provide the products it wants. He said globalization has taken a big
toll on U.S. manufacturing, and Wal-Mart is concerned about it.
"We do have an interest in U.S.
manufacturing doing well," Wertz said. He said unemployment and a
sluggish economy hurt Wal-Mart's business, too, but that dealing
with manufacturing's problems will be a complicated task.
Wal-Mart recently set up an export
office, according to Wertz, to help U.S. manufacturers sell their
products overseas. He said a number of American-made products are
popular overseas, and Wal-Mart wants to help manufacturers get into
foreign markets. While manufacturers focus on foreign trade
agreements and other policies, Wertz said Wal-Mart's main concern is
selling affordable products. He said people need to remember that
any solutions to the manufacturing crisis that raises prices in
stores may not be a good thing for the economy.
As to the idea of labeling
products, Wertz said it might hurt some of the manufacturers
Wal-Mart buys products from, but Wal-Mart is a retailer and doesn't
make any products.
Thompson and other manufacturers,
however, claim that if the American consumer knows where his or her
goods are coming from they will pay higher prices for American
products.
To see more of the Connecticut
Post, or to subscribe to the newspaper, go to
http://www.connpost.com
[back to top]
Family sues Wal-Mart for medical
bills
7/30/2003
[back to top]
The Associated Press
KANSAS CITY, Kan. -- A former
Wal-Mart employee is suing the company, the Children's Miracle
Network and Children's Mercy Hospital, claiming they withheld money
raised to cover medical expenses for treatment of his son's
congenital heart defect. Frank and Amy Arena, parents of Joey Arena,
filed a lawsuit Friday in U.S. District Court in Kansas City, Kan.,
seeking damages exceeding $75,000.
Wal-Mart said Monday that all but
$2,700 of Joey Arena's surgery had been paid for by insurance and an
employee-funded trust fund. Wendy Sept, a Wal-Mart spokeswoman, said
the family knew that a June 29, 2002, fundraiser wouldn't raise
money directly for their family.
"We're really sorry if there was
any misunderstanding, and we think everyone was trying to do the
right thing for the Arenas," Sept said.
The lawsuit claims the fundraiser
was promoted as the "First Annual Joey Arena Dance for Health Day"
and "A Special Event for a Special Little Boy!" Jason Davey, the
Arenas' attorney, wrote that the Arenas disclosed their son's
medical information because they expected to receive money directly.
Davey, of Brian W. Costello law firm, also wrote that volunteers
told donors their contributions would help pay for Joey Arena's
medical expenses.
"Children's Mercy did not use the
funds in any manner that could reasonably be calculated to have
directly benefitted" Joey Arena or his parents, Davey wrote in the
lawsuit.
Joey Arena underwent surgery in May
2002, when he was 15 months old. The lawsuit estimated the
successful operation cost more than $500,000.
Sept said the surgery cost about
$100,000, and all but $3,700 was covered by Frank Arena's health
insurance. Sept said Frank Arena received a check for $1,000 from
the Wal-Mart Associate in Critical Need Trust and, without giving
notice, stopped going to work at the Wal-Mart Supercenter in Shawnee
the next day. His employment was terminated 12 days later, Sept
said.
Sept said Wal-Mart donated a total
of $8,200 to the Children's Miracle Network in 2002, including a
$1,000 grant from the Wal-Mart Foundation. Sept said Wal-Mart was
auditing the fundraiser to determine whether the company made money
after covering costs, which included promotional T-shirts.
Jan Murfield, director of the
Children's Miracle Network in Kansas City, Kan., said the group
never raises money for individual children. Instead, Murfield said,
donations are split between the pediatric unit at KU Medical Center
in Kansas City, Kan., and Children's Mercy in Kansas City, Mo.
Murfield wouldn't discuss the Arena
case.
Children's Mercy referred questions
to the Children's Miracle Network.
[back to top]
Retailer's potential stirs zeal
over bill Would it foster Wal-Mart banks?
BY ALEX DANIELS ARKANSAS
DEMOCRAT-GAZETTE
[back to top]
26 July 2003
In September, when Congress returns
from its recess, the House of Representatives is likely to vote on a
bill that, depending on its final language, could either help or
hinder Wal-Mart Stores Inc.'s ability to break into the financial
services business.
Opponents of the measure in its
current form say it could allow the Bentonville retailer to open its
own bank nationally. They question whether a large commercial
company like Wal-Mart could apportion credit impartially, and they
worry that banking deposits could be used in nonbanking areas of the
company's business, unnecessarily putting funds at risk.
While Wal-Mart has attempted to get
into banking several times in the past, the company said it has not
decided on a course of action to broaden its financial services
offerings. Opponents have used the specter of a Wal-Mart bank to try
to craft the measure to their liking. The retailer says it remains
neutral on the matter.
As originally written, a section of
the proposed Financial Services Regulatory Relief Act of 2003 -
House Resolution 1375, introduced by Rep. Shelley Moore Capito,
R-W.Va.- would have allowed owners of industrial loan corporations
to open branch offices nation- wide. Industrial loan corporations
are like banks except they don't offer on-demand checking accounts.
Industrial loan companies only exist in five states.
In 1999, Congress determined banks
are not allowed to be owned by commercial companies, when it passed
the Gramm-Leach Bliley Act. However, the last banking overhaul left
out industrial loan companies, which can be owned by nonbanking
companies such as automakers or retailers.
The bill garnered considerable
attention from opponents of Wal-Mart Stores Inc., who believe the
retailer wants to buy an industrial loan company so it can open
banking branches in its stores nationwide.
A coalition consisting of the
National Grocers' Association, the Independent Community Bankers of
America and the United Food and Commercial Workers union led the
push for language in the bill that would place restrictions
industrial loan companies.
Federal Reserve Chairman Alan
Greenspan also weighed in against the measure.
Last summer the California
Legislature put the kibosh on Wal-Mart's intended purchase of
Franklin Bank, an industrial loan corporation in that state. In
August, California Gov. Gray Davis, a Democrat, signed into law a
measure making it illegal for industrial loan companies to be owned
by commercial firms.
NEW LANGUAGE
Rep. Paul Gillmor, an Ohio
Republican, said an acceptable compromise has been reached on the
matter of industrial loans. Under language to be incorporated into
the bill, companies that own industrial loans would be barred from
branching nationally if they generate more than 15 percent of their
revenues from nonbanking activities.
The change would put the branching
requirements for industrial loans in line with other banks.
"Wal-Mart was asking to be treated
differently than everybody else," Gillmor said.
Wal-Mart officials said the company
has not filed an application with state banking agencies to purchase
an industrial loan institution.
"Internally we haven't made a
decision," about whether to acquire a financial services company,
said Erik Winborn, Wal-Mart's director of national government
relations.
Although the company lobbied
members of the House Financial Services Committee, Winborn said,
Wal-Mart had not taken a position on the section of the regulatory
relief bill covering industrial loan companies' ability to branch
nationally.
Winborn called the debate on
industrial loan companies a "live issue," noting that the measure
has several supporters on the Financial Services Committee and must
be approved by the full House before being considered in the Senate.
"Our critics have been making
inaccurate assumptions" that Wal-Mart wants to buy an industrial
loan company and then open retail branches in its stores, Winborn
said.
The reason the retail giant tried
to buy Franklin Bank last year, Winborn said, was to use the
industrial loan for internal transactions, not retail banking.
At the time, Wal-Mart said it used
third-party banks to process debit card purchases, at a cost of less
than 1 cent each. Each month, the retailer processes more than 35
million debit transactions.
DANGEROUS GROUND
Still, opponents of commercial
ownership of banks worry that the retailer will use a change in the
ability of industrial loan companies to branch to open a national
bank. They ask what would have happened if Enron, the energy trading
firm that withered into bankruptcy after its leadership made a slew
of unethical decisions, had owned a bank.
"If a commercial business is not
doing very well, it is very tempting to upstream money from the
financial institution for other uses" within the company, Gillmor
said.
Others think Wal-Mart is unfairly
being represented as a bogeyman.
"They're trying to frighten
people," said Peter Wallison, a fellow at the American Enterprise
Institute, a Washington think tank that promotes freemarket
policies.
Noting that securities firms own
retail banks, Wallison claimed the notion that banking and commerce
are separate under current law is a myth.
"We want to keep Wal-Mart out of
the banking business," said Ron Ence, director of legislative
affairs at the Independent Community Bankers of America in
Washington. Not only would a Wal-Mart bank stymie smaller, regional
banks, Ence said, but it could also hinder local communities well.
"If Wal-Mart owned the bank,
deposits might not stay in the local area," Ence said. "They might
go back to Bentonville."
[back to top]
Lawmaker, women's groups hit Wal-Mart
The retailer denies it pushes
its workers to go on welfare.
By Cathleen Ferraro -- Bee Staff Writer
[back to top]
(Published July 24, 2003)
Wal-Mart Stores Inc. came under
fire Wednesday from a California politician who alleged the company
does not offer affordable health insurance and instead encourages
employees to sign up for welfare, food stamps and other government
subsidies.
The retailer, based in Bentonville,
Ark., vehemently denied the claim.
"In no way does Wal-Mart encourage
associates to apply for public assistance, and anyone who states
otherwise is misinforming the public," said Sarah Clark, a Wal-Mart
spokeswoman.
About 50 percent of the retailer's
1 million employees nationwide have health insurance through the
company, Clark said, with Wal-Mart paying for two-thirds of
coverage.
The company estimated about 40
percent of its work force has health coverage through spouses,
parents, second jobs, Medicare, school or another source.
At a Capitol news conference
Wednesday, Assemblywoman Sally J. Lieber and representatives of
state and national women's groups condemned what they called
Wal-Mart's low wages, saying the company's health plan is
cost-prohibitive.
The Santa Clara Democrat said she
plans to introduce legislation in the next two months that would
force companies offering inadequate wages and health benefits to
reimburse California for the cost of covering public assistance
expenses used by their workers.
Lieber also distributed copies of
information she said Wal-Mart gives employees about how to use an
Internet-based service for employment and income verification if
workers apply to a social service agency.
"We're in the middle of painful
cuts at the Legislature to programs for people who need it the most
because of this state budget crisis," said Lieber, "while Wal-Mart,
one of the largest and wealthiest corporations in the world,
facilitates through its low wages ways for employees to access
public assistance programs, to get on welfare. That's pretty much a
smoking gun."
The giant retailer denied that it
directly distributes to employees information on theworknumber.com,
an Internet service used for proving employment status. Instead,
Wal-Mart hands out such information to store personnel managers, who
have the option to share it with workers.
"It could be used to verify
employment when applying for public assistance," Clark conceded,
"but it also can help with verification of employment when applying
for car loans or mortgages, too."
Lieber said Wednesday that Senate
Bill 2, dubbed the "pay or play" legislation and introduced earlier
this year by Senate President Pro Tem John Burton, D-San Francisco,
would also improve employee access to health benefits.
SB 2 would require employers to
offer health insurance to their California workers or pay into a
purchasing pool where employees could get coverage. The bill is now
in a conference committee for language refinement.
Wal-Mart would not estimate an
average hourly wage for its California employees. But Lieber said
her staff's research showed it was roughly $8.50 an hour for
full-time workers in California.
At that wage, a single employee
with no dependents would earn take-home pay of $1,215 per month, if
working a 40-hour workweek. Wal-Mart officials said the company
offers medical insurance plans that would cost between 2.1 percent
and 5.4 percent of a single person's monthly income.
Wal-Mart workers, approached
outside the Natomas store, did not wish to discuss details of their
benefits package. But five of six employees said they received
health insurance through the company. None would give his or her
full name or estimate what percentage of their paychecks go to
health insurance.
Statewide, Wal-Mart operates 170
namesake stores, Sam's Clubs and distribution centers employing some
55,000 people. Worldwide, it operates 4,400 stores with 1.4 million
employees.
Last year Wal-Mart earned $8
billion on sales of $244.5 billion.
[back to top]
Wal-Mart's New Slogan: Union Made?
Evan Hessel,
[back to top]
07.23.03, 8:00 AM ET
Coming to a Wal-Mart near you:
Unions.
Founder Sam Walton built the
retailer on the premise that happy employees made for happy
customers. The formula worked. Wal-Mart (nyse: WMT - news - people )
is the nation's largest retailer, ringing up $244.5 billion in sales
last year alone.
But these days, blue-vested
Wal-Mart greeters are far from cheerful. They have filed more than
three dozen separate lawsuits in 30 states accusing Wal-Mart of
violating federal wage-and-hour rules, sex discrimination (see
Wal-Mart's Women Troubles) and threatening workers involved in union
activities.
Meatcutters at a Jacksonville,
Texas, store won the right June 18 to unionize, making them the
first employees to collectively bargain in the company's 41-year
history. The fight ends a three-year struggle for one of the biggest
unions in the nation, the 1.4-million member United Food and
Commercial Workers.
The UFCW is strategically attacking
Wal-Mart in markets where the retailer is planning to expand: the
heavily unionized Northeast, Mid-Atlantic and California, territory
where Wal-Mart has already opened 20 new stores this year. Having
exhausted sites in small-town America, Wal-Mart is rolling into
urbanized areas with plans to open or expand 300 new stores in
fiscal 2004. "When you win a union election in one store, you see
that domino effect. Soon they're all going to fall," said Leonard
Purnell, director of organizing for UFCW Local 1776 in Philadelphia.
Wal-Mart earned $8 billion last
year. But the retailer remains hooked on new store openings to help
fuel its growth both domestically and internationally. Overall sales
have slowed from 12% annual growth in the mid-1990s to the current
10% annual growth. Increasingly, it is looking like some of those
new stores will be staffed by union employees.
Not surprisingly, Wal-Mart
soft-pedals the labor issue. "Our associates would rather save their
hard-earned dollars and talk to their supervisors and managers than
pay someone else to do that for them," said Wal-Mart spokeswoman
Christie Gallagher.
The retailer says it pays its 1.1
million U.S. workers competitively, treats them fairly and
allegations in lawsuits are aberrations. Maybe so, but if recent
developments are an indication, Wal-Mart could have some problems
dispelling negative public relations.
Hourly workers have filed 40
separate lawsuits alleging store managers systematically forced them
to work off the clock, according to Wal-Mart's April quarterly
report. On Tuesday, a California judge postponed indefinitely a
hearing to decide if 1.5 million women can be added to a lawsuit by
seven current and former female Wal-Mart associates alleging that
the retailer systematically paid women lower wages and denied them
promotions. And in Villa Rica, Ga., Wal-Mart settled a lawsuit
alleging store managers spied on employees and threatened them for
soliciting for the union in their free time.
In Wal-Mart's home state of
Arkansas, the state Supreme Court overturned a lower court's
decision in June banning UFCW workers from entering Wal-Mart stores.
The decision gave momentum to UFCW
national unionization drive underway in 26 states. More than 200
UFCW members stormed a Saddle Brook, N.J., Wal-Mart in November as
part of the UFCW's effort to organize workers in areas where
Wal-Mart is opening stores.
All this is likely to add up to
some big numbers for Wal-Mart. Employees at the retailer currently
earn an average of $7.50 per hour, which is $2 to $3 less--a
whopping 20% to 30%--than unionized counterparts at Target (nyse:
TGT - news - people ) and Kmart (nasdaq: KMRT - news - people ). A
typical Wal-Mart employee earns $18,000 annually and either isn't
eligible for or cannot afford premiums on health or pension
benefits.
Wal-Mart's past success has been
tied to superior logistics, keeping costs low and driving volume.
Wal-Mart doesn't have a lot of headroom to absorb higher wage costs.
A typical Wal-Mart does about $53.7 million in sales with an
operating margin of about 7.5%, surely not enough to cover a 20% to
30% boost in wages without raising prices. Wal-Mart could always
trim staff, but what would that do to its prided customer service?
This might be good news for
competitor Target. But it's a bad omen for investors paying 30 times
12-month trailing earnings for the retailer's stock, which closed
yesterday at $56.90, up 94 cents.
[back to top]
Getting to Wal-Mart facts not easy
task
Published in the Herald News
[back to top]
07/20/03 Ted Slowik
It's hard to know who to believe in
the war of words between Wal-Mart and unions, who are making Joliet
the latest battleground over efforts to organize workers. Both sides
spew so much propaganda, it's difficult to tell who's telling the
truth.
United Food and Commercial Workers,
the union that represents people who work in supermarkets, wants you
to think that Wal-Mart is a greedy corporation that exploits workers
by paying low wages and offering meager benefits.
"Behind the yellow smiley-face of
the all-American Wal-Mart myth is a company ... where workplace
policies may mean workers need two jobs and depend upon public
support to get by," according to the UFCW's Web site.
The company denies that it is
anti-union. Its official stance on unions is stated on its corporate
Web site.
"At Wal-Mart, we respect the
individual rights of our associates and encourage them to express
their ideas, comments and concerns. Because we believe in
maintaining an environment of open communications, we do not believe
there is a need for third-party representation," Wal-Mart says.
Still, there are volumes of
evidence about the company's steps to promote their employees'
independence whenever a union attempts an organizing campaign.
Tactics range from anti-union messages posted in employee break
rooms to firing workers who are active in organizing efforts to
shutting down departments or closing stores if an unionization
effort ever is successful, according to several complaints UFCW has
filed with the National Labor Relations Board.
Wal-Mart counters that unions keep
butting in where they are unwanted. After unsuccessful organizing
campaigns in Dubuque, Iowa, and Las Vegas last year, Wal-Mart quoted
a Sam's Club employee in a company-issued press release.
"They (the unions) are like
vultures. They just keep circling and circling even though we had
140 associates send them letters asking them to bow out and leave us
alone," the employee was quoted as saying.
Both sides fight hard, which is why
things could get very interesting in Joliet by early 2005, when the
new Wal-Mart is scheduled to open at Illinois 59 and Theodore
Street. While researching the topic, I found news coverage of the
Wal-Mart vs. union battle being waged in California.
The board of supervisors in Contra
Costa County last month voted to ban superstores, which are the
combined discount/grocery stores that Wal-Mart typically builds
nowadays. In making its decision, the board cited a study done by
the San Diego County Taxpayers Association, a nonprofit, nonpartisan
organization.
The study showed that poorly
compensated workers at big-box stores would cost taxpayers millions
of dollars through the loss of jobs at other stores and the need for
government agencies to provide benefits to the workers who have
none.
"Even increased sales and property
tax revenues would not cover the extra costs of necessary public
services," the San Franciso Chronicle reported.
Wal-Mart maintains that many of its
employees don't need insurance from the company because they are
students, senior citizens or others who receive coverage elsewhere.
In Contra Costa County, Wal-Mart
collected more than 40,000 signatures and submitting them last week.
If 65 percent of the signatures are deemed valid, then a referendum
will be held and voters will decide whether the anti-superstore
ordinance will stand.
Even if you like shopping at
Wal-Mart and don't particularly care for unions, it's hard to deny
that the company's employee policies create significant social costs
for taxpayers. Unions and community-action groups will no doubt be
driving this point home over the coming months as Wal-Mart prepares
to build a second store in Joliet.
Reporter Ted Slowik can be reached
at (815) 729-6053 or via e-mail at tslowik@scn1.com.
http://www.suburbanchicagonews.com/opinions/columnists/slowik/j19tedcol.htm
[back to top]
Guatemala on front line of Wal-Mart
price war
July 17, 2003
[back to top]
By Greg Brosnan
VILLANUEVA, Guatemala, July 17
(Reuters) - This ring of shantytowns outside Guatemala City, where
the smell of raw sewage hangs in the air and armed gangs prowl at
night, is a world away from the bright lights of Wal-Mart aisles in
suburban United States.
Even so, impoverished workers
assembling clothes in a factory here that supplies the chain's
low-priced "Faded Glory" label, are among frontline troops in what
analysts see as a looming global price war in the U.S. apparel
manufacturing sector, led by the world's biggest company.
Apparel-exporting nations are
holding their breath for a lifting of world garment export quotas in
January 2005, which they say will see companies like Wal-Mart Stores
Inc. (WMT.N) shift more manufacturing to Asian countries with
rock-bottom wages. Some fear heavy job losses in places like
Villanueva.
Textile trade groups estimate China
could gain control of 65 percent to 75 percent of the U.S. apparel
market within a few years after the quotas are lifted, and have
pressed President George W. Bush to restrict imports.
Like most of its competitors,
Bentonville, Arkansas-based Wal-Mart has outsourced much of its
apparel manufacturing to regions like Central America where wages
are a fraction of those in the United States.
Every morning thousands of rural
migrants who scrape a living on the outskirts of this rambling city
of 3 million inhabitants, pour out of Villanueva's muddy hills into
some 20 export-processing plants, or "maquilas," mostly producing
clothes for U.S. retailers.
BLESSING OR BLIGHT?
Guatemala's 233 mostly Korean-owned
maquilas are granted government tax breaks for providing more than
100,000 jobs.
Since springing up in the 1980s
they have become a major source of employment for often illiterate
migrants from Guatemala's countryside who have flocked to the city
in search of work, many of them Maya Indians who fled a 36-year
civil war that finally ended in 1996.
"The industry has contributed in a
big way to the economic development of the country," said Luis Oscar
Estrada, head of Guatemala's maquila trade association.
But critics who accuse maquila
owners of labor abuses say that as retailers like Wal-Mart
increasingly switch production to poor countries, workers and their
families are simply trading rural poverty for urban misery.
"Instead of living in the
countryside, we're living beside a garbage dump in houses on the
edge of ravines," said Mary Mejia, a former maquila worker who runs
the Villanueva office of the American Federation of Labor and
Congress of Industrial Organizations (AFL-CIO).
ECONOMIC LIFELINE
Wal-Mart does not disclose
suppliers and no Guatemalan maquila would admit to being on its
payroll or grant this reporter a visit or interview.
But a seamstress in her mid-20s
earning $4.33 for a basic day's work at Villanueva manufacturer
Yu-Jin, said she was one of 250 workers that stitch together clothes
for Wal-Mart's "Faded Glory" line at the factory. She said her job
was her family's economic lifeline.
Sitting in the small, windowless
room she shares with her husband and infant son in a grubby tenement
building where nine families compete for a single shower, she said
the hard work was stressful and the money -- although in line with
Guatemala's minimum wage -- is meager.
"It's enough money for food,
nothing else," she said, speaking on condition of anonymity for fear
of being fired.
But the seamstress, whose husband
also works in a maquila, said making clothes for Wal-Mart was a
dream job compared with the years spent toiling for a pittance as a
household maid, previously among the only options open to a young
woman arriving in the capital from a rural village.
Labor groups have criticized
Wal-Mart for refusing to adopt United Nations standards on working
conditions, saying the world's biggest company has a responsibility
to set the standard on workers' rights.
Wal-Mart contends it is a leader
through its own factory certification standards, which require
suppliers to meet conditions such as banning child labor.
"We have made a commitment to
helping improve working standards around the world on a grass-roots,
factory by factory basis," Ken Eaton, head of Wal-Mart's global
procurement division said in a written response to questions from
Reuters.
"COMPLETE DISASTER"
Many fear a massive shift of
manufacturing to Asian countries in 2005 when the World Trade
Organization is slated to lift garment quotas.
"It would be a complete disaster
for our economy," said Guatemalan Economy Ministry official Leticia
de Ovando. "There would be mass unemployment and far less money
coming in."
Eaton said he "wouldn't want to
speculate" on whether Wal-Mart would shift more production to China
in 2005.
"Today, the quotas probably
restrict us from purchasing more goods from China, but several years
from now the situation could well be different," he said.
Eaton said a Central American
free-trade agreement, now under consideration, could make factories
there more attractive, and noted that Wal-Mart "would never want to
have all our eggs in one basket" by sourcing too much from China.
"We have stores today in Mexico and
South America, and speed to market is very important to us, which
helps make Central America attractive to us as a source of supply,"
he said.
The maquila trade association's
Estrada said Guatemala's maquilas could never compete with Chinese
wages but were already honing themselves to stay competitive by
speeding up delivery times to the United States.
To the Wal-Mart seamstress, for
better or worse, that means more work. She said managers had
recently announced a rash of late-night overtime to complete yet
another rush order.
She said women in the United States
who bought such a garment on a whim might wear it casually without
any thought to its origins -- or just toss it aside without trying
it on.
"They don't know how much we've
suffered to make it," she said.
(With additional reporting by Emily
Kaiser in Chicago)
07/17/03 18:29 ET
[back to top]
Wal-Mart contests Manitoba union
vote process
Posted July 13, 2003
[back to top]
THOMPSON , MAN. - Workers at a
Manitoba Wal-Mart store cast ballots in a significant vote Friday,
one that could result in the the retail giant's only unionized
employees in North America.
The United Food and Commercial
Workers Union (UFCW) claims it has the support of more than 50 per
cent of the 130 eligible workers at the store in Thompson.
But Wal-Mart says it contests the
conduct of the voting process, including coverage by the media. Wal-
Mart claims a CBC cameraman was too close to voters while taping
footage from the store's parking lot, and could have influenced the
voters' decisions.
In a statement, the company says:
'Wal-Mart is concerned that the integrity of the voting process in
Thompson is protected. Under Manitoba law, there is no
electioneering permitted at a workplace or polling station on the
day of a vote.'
That means the ballot box will
remain sealed and the votes will not be counted until the courts and
labour relations board sort the matter out.
However, the UFCW says CBC's
presence was not influencing anyone and called the entire process
fair.
Colin Trigwell, organizing director
with the union, denounced the move. 'It's terrible. To me, it's
another stall tactic in delaying the democratic process,' he said.
The Manitoba Labour Relations Board
did not return phone calls to the CBC, but a board representative
said Thursday there is no law restricting the media from covering
any labour vote in the province.
The union vows this delay will not
slow down its drive to unionize all Wal-Marts in the province.
Written by CBC News Online staff
-June 28, 2003 Copyright 2003 Canadian Broadcasting Corporation -
All Rights Reserved
[back to top]
Wal-Mart: The Godzilla of grocers **
A survey by Big Research
shows that Wal-Mart is truly the biggest retailer in the world and
still growing
By Garrett Glaser CNBC
[back to top]
July 10
With $50 billion a year
in grocery sales, by 2006, Wal-Mart is estimated to supply almost 12
percent of all food sold in the U.S. — and the world’s largest
retailer isn’t showing any signs of slowing.
ACCORDING TO ONE retail report,
Wal-Mart is the top-rated store for consumers. Every month, a
company called Big Research in suburban Columbus, Ohio surveys
20,000 consumers around the country about their shopping habits.
From data gathered last June, the report shows Wal-Mart was the
customer favorite. Wal-Mart is the the biggest retailer in the
world, and it’s growing even bigger, causing tremendous change along
the way. In the supermarket industry, some would say an upheaval.
“They’re obviously the 800 pound gorilla in the grocery business
right now,” says Gary Drenik, CEO of Big Research. “They’re number
one with all consumers 18 and over in our surveys. They’re also
number one with women shoppers, number one with incomes under
$50,000, and also number one with people over $50,000 and even
$75,000.”GROCERY GODZILLA? Other numbers are even more mind numbing.
Consider this: Forty-five percent of women who buy apparel at
Wal-Mart also buy their groceries there. Forty-seven percent of men
do the same. Forty-two percent of people buying childrens’ wear do
the same. And a whopping 80 percent of the people who go in to buy
beauty aids and cosmetics are now also shopping Wal-Mart for the
majority of their food purchases. Even with those numbers, there
still is a strong disagreement on the significance of Wal-Mart’s
growth into groceries. A recent report from Merrill Lynch says, “We
continue to believe that new sales and market-share data do not
support the bear argument that Wal-Mart is the root of all food
retailers’ problems. And Meredith Adler, who follows food and drug
retailing for Lehman Brothers, agrees that plenty of people don’t
shop only on price. “There is an equation — a value equation that
every customer has in their mind that includes a lot of things
besides just price.” Adler says that within the equation, consumers
consider many things, such as how far a store is from their home,
the quality of stores’ products, the stores’ assortment and how many
things they purchase at the store?
[back to top]
Wal-Mart gets chilly reception in
U.S. cities
STOUGHTON, Wis.,
[back to top]
July 10 (Reuters)
Main Street in this town of 12,500 near Madison, Wisconsin, looks
like thousands of others, except perhaps for the Norwegian flags
lining the road, a tribute to the immigrants who settled the area.
There's an antiques shop, a little
drug store, a movie theater, and down the road, there's a Wal-Mart.
People around here like the
small-town feel, but they also like their Wal-Mart -- they just
don't want to see it getting any bigger. So they're putting up a
fierce fight against Wal-Mart Stores Inc.'s (WMT.N) proposal to
build a new supercenter on local farmland.
"There's a Wal-Mart in town now and
it's very well liked, but it's a little one," said Larry Peterson,
who helped organize local opposition to the proposed supercenter.
"The proposal that Wal-Mart is
making is one of these megastores. It would change us from a local,
self-sufficient town to a regional shopping hub," he said.
Wal-Mart, the world's biggest
company, is banking on supercenters to drive domestic revenue and
profit growth over the next few years. The stores, some of them as
large as four football fields, carry a full line of groceries along
with clothing and other goods usually found in its aisles.
The retailer dominates rural and
suburban markets, but as it bumps up against more urban areas --
with plans for increasingly large stores -- resistance is mounting.
Wal-Mart plans to open more than
200 supercenters in the United States this year. For the first time
in Wal-Mart's history, U.S. supercenters in 2003 will outnumber the
smaller discount stores that do not carry a full line of groceries.
The retailer opened its first
supercenter in 1988, and is now the biggest grocery seller in the
world. The idea is, customers may only visit a discount store to
stock up on diapers or detergent a couple of times a month, but
they'll need bread or milk twice a week.
"UFF-DA WAL-MART"
Peterson's anti-supercenter group
calls itself "Uff-da Wal-Mart," using a Norwegian expression of
displeasure to reflect the community's roots. A city council hearing
earlier this week on an ordinance that would block large retail
development for six months drew a standing-room-only crowd, nearly
all of them opposed to large-scale new development.
"People live in the town because of
its tone and its culture and its history," Peterson said. "They
don't live here because they want rapid access to lots of shopping
malls."
Wal-Mart's Stoughton proposal calls
for a 180,000-square- foot store on farmland on the outskirts of
town, dwarfing the 40,000-square-foot existing store. Residents
would rather see Wal-Mart expand at its current location, or perhaps
open a small grocery store on the other side of town.
Stoughton isn't alone in its
Wal-Mart opposition.
Dallas, Texas, recently denied
Wal-Mart's request to build a massive supercenter with retail floors
on top of a parking structure. New Orleans also turned down a
proposal for a supercenter, and dozens of other communities are
trying to muster enough supporters to block new Wal-Mart
developments.
For its part, Wal-Mart says it
wants to work with communities, and has enough expansion
opportunities that it should not have to force its way into an
unwilling area.
It regularly modifies its stores to
meet local tastes, whether it means adding stables in Pennsylvania's
Amish country, where shoppers often arrive by horse and cart, or
extra-spicy salsa in communities with large Hispanic populations.
In some places, Wal-Mart has found
residents much more amenable than the local politicians.
In California, for example, where
Wal-Mart plans to open dozens of supercenters in the next few years,
some local governments have passed ordinances blocking megastores
that derive more than 25 percent of their revenues from food sales.
But in at least two cases, Wal-Mart
has rallied sufficient resident support to override the ordinances.
GOING VERTICAL
The next hurdle for Wal-Mart is how
to build stores in densely populated urban areas. The retailer has
one store on the edge of Philadelphia and several around Los
Angeles, but None in Chicago or Manhattan.
"As they start to move more and
more into urban areas, it's a different real estate game. You have
to start thinking about multilevel stores, which are less convenient
to consumers," said Michael Collins, partner with consulting firm
Bain & Co.
The answer may lie underneath a
soccer stadium in Dalian, China, where Wal-Mart has built a
multilevel store. Wal-Mart has also opened a three-level store in
the Baldwin Hills neighborhood of Los Angeles this year, so the
retailer is clearly considering that model for U.S. expansion.
But going vertical can be
problematic. Wal-Mart's supercenters work because customers like the
convenience of stopping in for basic grocery items, but are often
tempted to also pick up higher-margin items like clothing.
If groceries are on the ground
floor, how many customers would venture upstairs to check out the
more profitable merchandise? And if the groceries are on a higher
floor, will it still be convenient enough to lure customers away
from other grocery stores?
"People hate to go up," said Thom
McKay, a vice president with architecture and consulting firm RTKL.
"They may go up one level if they know there's food there. They're
more likely to go down than up, especially if they can see down."
Wal-Mart's three-level store in Los
Angeles has shopping cart escalators so people can bring their
fully-loaded carts between floors, but McKay said the novelty
quickly wears off, and the escalators can become an annoyance rather
than a convenience.
The second option is going small --
at least by Wal-Mart standards. The retailer runs about 100
Neighborhood Market grocery stores that include pharmacies and photo
finishing booths, but little in the way of general merchandise.
Those stores could easily find
their way into major urban areas, but Wal-Mart plans only a handful
of new ones this year, in part because it doesn't have enough store
managers to open as many as it would like. The retailer said it was
happy with the smaller stores, but supercenters are the priority for
now.
Make a point of writing your
Senators and member of Congress today opposing legislation to allow
industrial banks to open branches in other states and avoid state
regulation, and authorizing ILCs to offer checking accounts.
[back to top]
Big retailers could become interstate bankers Wal-Mart may gain new
power in finance
MARK SKERTIC CHICAGO TRIBUNE
[back to top]
8 July
2003
Detroit Free Press
You already can buy groceries, school
supplies and lawn mowers at mega-department stores, not to mention
that puppy the kids have been begging for. Now Congress is
considering allowing retail behemoths to handle your checking and
savings accounts, too.
The change could create the First
National Bank of Wal-Mart. How about Sears Bank & Trust? Or
Volkswagen Commerce Bank?
Banks inside supermarkets and some
department stores have become commonplace. But those are existing
banks partnering with stores. A bill before Congress would make it
possible for retailers and others to own their own bank with
branches all over the country.
The proposed changes in federal
banking laws would blur the lines between commercial enterprises and
financial institutions by allowing companies to buy entities known
as industrial loan companies (ILCs) and branch them out to other
states.
ILCs are niche financial
institutions that exist in only a handful of states such as
California, Utah and Nevada. Current federal law doesn't allow ILCs
to move beyond state lines, but the proposed law would lift
restrictions on such moves and eliminate states' abilities to
restrict out-of-state banks from setting up shop.
Any business could buy an ILC, but
it is Wal-Mart Stores -- the world's largest company with $244
billion in sales -- that many bankers cite as their greatest fear.
Wal-Mart is the Incredible Hulk of commerce, and small banks say
it's a juggernaut that could level competitors.
"Wal-Mart would have the potential
to bring, if not the Black Death, at least the plague to thousands
of community banks," said Kenneth Guenther, president and CEO of the
Washington, D.C.-based Independent Community Bankers of America .
More than bankers are worried about
some of the changes Congress is considering. A bill that has passed
the House and is now before a Senate committee would allow financial
institutions to pay interest on business checking accounts,
something they cannot currently do. Giving ILCs that power is a
mistake, according to Federal Reserve Chairman Alan Greenspan.
The "amendment would alter the
structure of banking in the United States," he warned in a letter to
the chairman of the House Financial Services Committee. Doing so for
ILCs would run counter to laws "prohibiting the mixing of banking
and commerce," he said.
Federal Deposit Insurance Corp.
Chairman Donald Powell does not agree that ILCs are a threat to
other financial institutions. In a May speech to banking
supervisors, he said, "While I understand the anxiety some people
have on this issue, fear of competition should not be the compelling
argument in formulating good public policy."
Because ILCs are creations of state
governments, what they are allowed to do varies from state to state.
In general, they were created with limited lending abilities to
serve areas traditional banks had neglected.
While they are not supervised by
the Federal Reserve, there are 51 ILCs that carry FDIC insurance,
giving them government backing for up to $100,000 per account and
making them subject to FDIC examinations. They are also subject to
regulation by their chartering state.
Many companies use them to provide
financial services related to debit and credit card operations.
"A lot of things are being said
about ILCs, but the record and the facts and the picture that we
have speaks to their safety and soundness," said Rep. Jim Matheson,
D-Utah. His state has 24 ILCs insured by the FDIC, and he supports
lifting restrictions on them.
More reach by ILCs would offer
businesses and ultimately consumers more financial options, he said:
"These institutions are regulated by the FDIC. There is a strong
separation between the ILC and the parent company."
Guenther, of the community bankers
group, still sees problems. "It's a fundamental principle -- banking
and commerce ought to be kept separate," he said.
Banks owned by commercial
enterprises would compete for customers with all banks in a market
where they're located, but smaller, community-based institutions
could be the most vulnerable to the competition.
A multibillion-dollar institution,
such as Bank One or Detroit-based Comerica in the Midwest, offers a
range of personal, commercial and investment banking services that
an ILC would probably not try to match. But an ILC could be vying
for many of the same customers that keep smaller banks in business.
Last year Wal-Mart made an offer to
buy Franklin Bank of California , an ILC. Its efforts were stymied
when California lawmakers prohibited non-financial institutions from
buying ILCs. Owning an ILC in southern California could have
affected more than Wal-Mart customers in the Golden State. For
example, Wal-Mart could have used the bank to handle debit
transactions for all its stores, reducing the company's costs.
While Wal-Mart has some financial
services already in place -- payroll check cashing, money orders and
transfers -- it has no plans to purchase an ILC, said spokesman Tom
Williams.
About 20 percent of Wal-Mart's
customers don't have a bank account, so there is a demand for those
services, Williams said. In addition, about 800 of the 3,500
Wal-Marts and Sam's Club locations have bank branches in the stores.
Those are banks that Wal-Mart has a contract with to come in and
offer services.
Sears, Roebuck & Co. owns a Utah
ILC, but the retailer has not lobbied to expand the powers or reach
of the institution, said spokesman Chris Brathwaite. "We're focused
on a number of things, and this isn't one of them," he said.
[back to top]
Opposition to Wal-Mart more than
just a 'few'
Jim Becker,Citizens Against
Reckless Development (C.A.R.D.), Honolulu, HI HonoluluAdvertiser.com
[back to top]
July 5,2003
To my amazement, Wal-Mart's hired
guns are still peddling the canard that opposition to the planting
of the world's largest box store in the middle of Ke'eaumoku
residential neighborhoods comes from a few malcontents with "selfish
motives." (An interesting choice of words from the world's largest
company, which faces a monster lawsuit from its 700,000 women
employees for discrimination in pay and promotion and just lost a
mammoth suit for working its people thousands of hours of unpaid
overtime.)
We "few" include U.S. Rep. Neil
Abercrombie (who once represented the district in the City Council),
former Lt. Gov. Mazie Hirono (who once represented it in the House),
state Sen. Carol Fukunaga (who represents it now), state Reps. Scott
Saiki and Ken Hiraki (whose districts meet at Ke'eaumoku Street),
City Councilwoman Ann Kobayashi and Mayor Jeremy Harris, who says
the project will generate intolerable traffic gridlock, pollution
and noise 24/7, kill local businesses and result in a net loss of
jobs and tax revenues.
How "few" is a few?
Add in the U.N. Environmental
Center, the former director of the city Department of Planning and
Permitting, several unions, environmental groups, retail
establishments, a top law firm and some 1,300 people who have signed
an invitation to join Citizens Against Reckless Development - not
some airy-fairy "we like cheap socks" petition - and a similar
number demanding a traffic impact study before the gridlock and
poisonous air.
Some few.
As for selfish, we treat the women
in all our organizations equally; we all work countless hours of
unpaid overtime to fight this blatant case of corporate greed.
[back to top]
Wal-Mart probed over fuel tanks
Retailer possibly violated state tank laws
By GREG C. BRUNO Sun staff writer
[back to top]
July 2, 2003
The Florida Department
of Environmental Protection is investigating more than a third of
Florida's Wal-Mart facilities for possible violations of the state's
petroleum storage tank laws, agency officials said Friday.
Since 1998, regulations have
required most above-ground fuel tanks used by gas stations,
auto-repair facilities and other service providers to be registered
with the state at the time of their installation. Many Wal-Marts,
including supercenters with oil-and-lube operations, and retail
stores with backup power generators, have on-site fuel storage
tanks.
Businesses with tanks on their
property also must prove they have the financial resources to pay
for a cleanup if a spill occurs.
But in as many as 75 Wal-Mart
locations statewide, DEP officials said, the company appears to have
failed to comply with one or more of Florida's tank laws.
The oversight means that for as
many as five years, the environmental agency was unaware of the
company's on-site fuel sources and unable to ensure they were
operating properly.
"If the state doesn't know it's
there, and there is a leak from the system, and the leak enters
Florida's ground or surface water, it could be an expensive cleanup
and have potential impacts to human health," said Marshall
Mott-Smith, administrator of Florida's storage tank regulation
division.
Daphne Moore, a Wal-Mart
spokeswoman, said the retailer is working with the state to address
the concerns.
"It is a situation that we are
aware of," Moore said. "We hired an outside consultant to regulate
all the tanks and evaluate all the tanks as well."
Moore said that varying regulations
between states led to the company's failure to comply with Florida
laws.
"Once we became aware of the need
to register these tanks we did so," she said.
Roughly 92 percent of the state's
drinking water is supplied by groundwater. To protect this valuable
yet vulnerable resource, Florida has adopted some of the toughest
petroleum contamination prevention and cleanup laws in the country.
In 1983, Florida become one of the first states nationwide to
regulate above- and below-ground storage tank systems.
Today, all of the state's regulated
tanks are required to provide secondary confinement — in essence a
tank within a tank — to ensure against accidental leakage.
To enforce state laws, DEP
contracts inspection duties to private businesses or governmental
agencies in all 67 counties. In most cases, inspectors are pulled
from the ranks of local environmental offices. In Alachua County,
staff with the Environmental Protection Department conduct the
reviews.
But the annual regulatory
compliance checks mandated by the state are impossible to perform
when tank owners fail to register them, DEP officials say. With
Wal-Mart, because the company never informed the environmental
agency when the tanks were installed, state inspectors were unaware
of their existence, Mott-Smith said.
On Friday, officials with the
storage tank regulation division would not release the locations of
the stores under investigation, citing legal issues. But Mott-Smith
said stores under review included supercenters — which often have
Tire and Lube Express services — as well as smaller retail stores.
Wal-Mart stores that sell food and
require refrigeration typically have above-ground fuel tanks inside
their stores to power backup generators, he said.
Tim Ramsey, Alachua County's tank
program coordinator, said Gainesville's two Wal-Mart stores had not
been included in the state review.
Mott-Smith also said that none of
the stores being investigated had shown evidence of past or present
leaks. However, failure to comply with Florida's financial
responsibility requirements could bring fines of as much as $5,000
per violation, he said.
A meeting is scheduled with the
state's tanks program supervisors this week to discuss how to
proceed.
Greg Bruno can be reached at
374-5026 or greg.bruno@gvillesun.com.
[back to top]
Oregonians battle Wal-Mart
Statesman Journal file
The lines are long at a Wal-Mart
Supercenter in Cool Springs, Tenn. A few Oregon cities are
challenging Wal-Mart expansion plans, saying the retailer hurts
other local businesses.
[back to top]
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