2 posts from September 2007

http://www.whistleblowers.org/

http://www.legalmatch.com/law-library/article/whistleblower-laws.html

Whistle Blowers are losing right and Wrongful Termination happens to a lot of Americans so become involved.

Courageous FBI agents that are Whistle Blowers and are heroes for risking the life and their families well being to ensure that justice is never forgotten.
http://www.youtube.com/watch?v=pGAiyJ_l2a8

About Censorship
http://www.youtube.com/watch?v=DBn90lsUmgE
and the author
Billy Bob Joe 57

Wrongful Terminations in the US
http://jobsearch.about.com/od/salary/a/fired.htm

You're not alone. Experts say that at least 250,000 workers are illegally or unjustly fired each year and that's not counting those that were justifiably terminated.

 

How to Handle a Termination

Please be patient since there is a lot to read.

It is all legal or otherwise there would be legal issues here.

Read and decide and reach your own conclusions

Samuel Robson Walton set-up Thomas M Coughlin for a downfall since the unpleasant side of Wal-Mart was about to possibly be revealed.

http://groups.myspace.com/stoptheempire and paraphrased by Kevin

Wal-Mart's little known secrets

http://www.againstthewal.net/spyarticle.html

While posing as a friendly hometown retailer, the international corporate giant conducted elaborate espionage on local citizens.

organizes annual protests at Wal-Mart's shareholder meetings in order to bring attention to Wal-Mart's chronic mistreatment of workers and communities.

Bruce Gabbard, a former Wal-Mart security worker revealed to the Wall Street Journal that the retail giant is running a sophisticated surveillance operation targeting employees, journalists, stockholders and citizen groups. Gabbard says that Wal-Mart sent a long-haired employee wearing a microphone to infiltrate Against the Wal's protest at last year's Wal-Mart shareholders meeting. Wal-Mart also sent a surveillance van to monitor the group.

Gary McWilliams, the Wall Street Journal reporter who broke the story told Democracy Now's Amy Goodman that "[Wal-Mart]…used the information to alert the local police department about the protestors' plans."

Last year's Against the Wal protest was attended by members of ACORN, SEIU and local community members and called for Wal-Mart to improve its health care benefits along with other demands.

"Wal-Mart acts like we're possibly violent or criminal, but we're only normal citizens working for a better world. We're exercising our democratic rights out in the open, they are the shadowy characters here." said an Against the Wal member.

"We were not at all surprised at all to find that Wal-Mart used Gestapo tactics," said Against the Wal Member Josh Thompson. "The working people of the world are very familiar with Wal-Mart's anti-democratic and criminal behavior. They utilize sweatshops in the 3rd world, they have an extensive union busting program, they mistreat their female employees, they refuse to provide affordable healthcare. Spying is the least of their crimes."

Against the Wal members were also not surprised to learn that Wal-Mart worked closely with local police. "The struggle for democracy in the U.S. has always been opposed by big business and the government," said Joe Diffy, another Against the Wal member, "Police intercepted our protest and herded us into an Orwellian 'free-speech zone' far away from the shareholders. They told us we had to have a permit just to stand on the sidewalk. Once again the police sided with corporate power against people's democratic rights."

Against the Wal plans to protest this year's

 

Read Wall Street Journal Article

Extra

4/5/2007 10:00 AM ET

Inside Wal-Mart's 'threat research' operation

http://articles.moneycentral.msn.com/Investing/Extra/InsideWalMartsThreatResearchOperation.aspx?page=1

Read Democracy Now! Report

Friday, April 6th, 2007

Former Wal-Mart Worker Blows Whistle on Company Surveillance Operation, Spying of Critics

A former worker at Wal-Mart is claiming the retail giant is running a sophisticated surveillance operation that targets employees, journalists, stockholders and critics. The worker, Bruce Gabbard, says the retail giant spied on employees, journalists, stockholders and critics of the company. We speak with the Wall Street Journal reporter who broke the story. [includes rush transcript]

 

Watching the watchdogs. A former worker at Wal-Mart is claiming the retail giant is running a sophisticated surveillance operation that targets employees, journalists, stockholders and critics. Bruce Gabbard was fired last month for intercepting and recording phone calls to and from a New York Times reporter. Gabbard told the Wall Street Journal he was part of a broader surveillance operation run out of Wal-Mart's Arkansas headquarters. Employees reportedly nicknamed their work area "The Bat Cave."

Gabbard also revealed that Wal-Mart infiltrated the group Up Against the Wal last year by sending a long-haired employee wearing a wireless microphone to one of the group's meetings. A Wal-Mart surveillance van was stationed outside the meeting in order to listen in to what was happening. Wal-Mart also reportedly closely monitored the internet and phone usage of employees at work. Managers received a list of email addresses and phone numbers with which their employees have communicated, and a list of Web sites visited. Wal-Mart also developed a system to read the personal emails of workers sent or received from private accounts such as Hotmail or Gmail.

After the Wall Street Journal story ran, Wal-Mart issued an apology -- but only to shareholders that were monitored under the surveillance operation.

We speak with one of the reporters who broke the story, Gary McWilliams.

 

Gary McWilliams

, reporter for the Wall Street Journal. He joins us from Houston.

 

 

AMY GOODMAN:

Watching the watchdogs. A former worker at Wal-Mart is claiming the retail giant is running a sophisticated surveillance operation that targets employees, journalists, stockholders and critics. Bruce Gabbard was fired last month for intercepting and recording phone calls to and from a New York Times reporter. Gabbard told the Wall Street Journal he was part of a broader surveillance operation run out of Wal-Mart's Arkansas headquarters. Employees reportedly nicknamed their work area "the Bat Cave."

Gabbard also revealed Wal-Mart infiltrated the group Up Against the Wal last year by sending a long-haired employee wearing a wireless microphone to one of the group's meetings. A Wal-Mart surveillance van was stationed outside the meeting in order to listen in to what was happening. Wal-Mart also reportedly closely monitored the internet and phone usage of employees at work. Managers received a list of email addresses and phone numbers with which their employees have communicated and a list of websites visited. Wal-Mart also developed a system to read the personal emails of workers sent or received from private accounts, such as Hotmail or Gmail.

After the Wall Street Journal story ran, Wal-Mart issued an apology, but only to shareholders that were monitored under the surveillance operation.

In a few minutes, we're going to speak with an activist who was targeted by the surveillance, but first we're joined by one of the two reporters who broke the story. Gary McWilliams is a reporter for the Wall Street Journal. He joins us from a studio in Houston. Welcome to Democracy Now!, Gary.

 

GARY McWILLIAMS:

Good morning, Amy.

 

AMY GOODMAN:

Well, why don't you lay out the story? First, how did you discover what Wal-Mart was doing?

 

GARY McWILLIAMS:

Well, it was about five weeks ago. The company announced they had fired a technician for recording conversations with a New York Times reporter and recording pager messages sent over its internal network. We started looking into it then, and what we found was a very sophisticated, very extensive operation run by former FBI agents, headed by a former CIA agent in his Bentonville headquarters.

Mr. Gabbard spoke with us, described the operation in quite detail and helped draw a picture, really, of a company that had an executive security program, global security, threat protection, information security. A quite extensive operation.

 

AMY GOODMAN:

Talk about the man who became the whistleblower.

 

GARY McWILLIAMS:

You know, Mr. Gabbard is a former Marine. He was a reserve deputy sheriff in Benton County, outside of -- that encompasses Bentonville. But, you know, the interesting part, this goes back to post-9/11. What he described to us was, at that time some FBI had set up a program asking US corporations to look for terrorist cells, using their phone systems to record calls from places like Syria, Iran, North Korea. And Mr. Gabbard helped set that system up. And in the wake, several years later, that same system was used to record calls from a reporter.

 

AMY GOODMAN:

Explain the first part. How did he monitor these calls to these other countries?

 

GARY McWILLIAMS:

Well, they set up a system with their PBX internal telephone system that would look for phone numbers coming from rogue countries, essentially, to them, and then record those calls looking for sleeper cells, perhaps, within their workforce or for terrorists calling in.

And now, this sort of security operation took on a second wind about two or three years ago, when embarrassing memos started appearing on Wal-Mart Watch's website. And those sort of triggered a new round of looking for information leakers inside the company, and they used, again, a very sophisticated email snooping system to look for key words in messages going outside the company.

 

AMY GOODMAN:

You write in the piece in the Wall Street Journal that Mr. Gabbard says he was directed by two former FBI agents working for Wal-Mart who set up this system to monitor foreign calls originally?

 

GARY McWILLIAMS:

Right. Like a lot of companies after 9/11, Wal-Mart took a look at its security systems and decided it needed to sort of beef them up. And what we saw from them was a very sophisticated ramp up of people and equipment.

 

AMY GOODMAN:

And where did Pentagon technology fit into this story?

 

GARY McWILLIAMS:

It's very interesting. You know, a lot of corporations have systems that filter emails, that look for keywords that suggest wrongdoing. What Wal-Mart did was acquire a system used primarily in the past by the Defense Department that was much more sophisticated. It could do things such as tell the degree of flesh tone on an image that was viewed. It could look at all content going over its corporate network. And where typical email monitoring systems would look at the corporate email system -- you know, your internal network -- what this system was able to do was look at any content passing, so if you accessed a Gmail system, for instance, it could see what you're seeing.

 

AMY GOODMAN: And you write the whole issue of flesh tones has to also do with whether people are viewing pornography?

 

GARY McWILLIAMS: Correct. You know, most companies have a system to prevent harassment and prevent wrongdoing by employees, but this is fairly advanced. We spoke with a head of an information security network that said it was quite above what most companies have.

 

AMY GOODMAN: You also write that Wal-Mart helped the Pentagon develop technology.

 

GARY McWILLIAMS: Well, exactly. This system was not helping the Pentagon. What it was was it was helping a software developer perfect the system. We mentioned the system was used primarily by the Defense Department. Wal-Mart was helping develop a commercial version.

 

AMY GOODMAN: Oakley Networks, what is this company?

 

GARY McWILLIAMS: It's a Utah software company that provides a software package called CoreView that looks at information going over a network, and it's so sophisticated, it allows you essentially to replay later exactly what an employee would have seen on his screen or done with his computer. They describe it as sort of a TiVo-like a replay.

 

AMY GOODMAN: Monitoring keystrokes.

 

GARY McWILLIAMS: At one level, yes. But, again, it's -- think of it as a TiVo player, where you can replay activities, you know, done in the past. This is quite the same way. They can replay your computer screen to show exactly what you were seeing and changes you were making to it.

 

AMY GOODMAN: The well-known multinational company McKinsey, where does it play in here?

 

GARY McWILLIAMS: Well, at one point -- now, one of these embarrassing memos that Wal-Mart felt had been leaked from internally, McKinsey had helped work on that memo. It was their Susan Chambers healthcare memo, if you recall it. Subsequent to that --

 

AMY GOODMAN: Explain what the Susan Chambers memo was.

 

GARY McWILLIAMS: It was an internal document sent to the board of directors proposing ways to reduce their healthcare costs. Among those, you know, was requiring employees to do more physical chores to essentially weed out those that were sickly, unhealthy, and therefore cut their healthcare costs.

 

AMY GOODMAN: So go on with your point.

 

GARY McWILLIAMS: What the -- you know, the company was embarrassed by this, obviously. And there was a stream of other memos that started leaking out after 2005. And Mr. Gabbard tells us, you know, part of -- he was approached by the head of security to help stop those leaks, and he used the Oakley system essentially to monitor internet access by McKinsey consultants doing a later project.

 

AMY GOODMAN: We're talking to Gary McWilliams, one of the two Wall Street Journal reporters who broke the story on -- well, the headline: "Inside Wal-Mart's 'Threat Research Operation.'" So tell us what happened to Mr. Gabbard, to the whistleblower who worked for some nineteen years, how exactly this whole thing unraveled and came to be known?

 

GARY McWILLIAMS: Mr. Gabbard was fired a little more than a month ago as a result of another employee, I guess, going forward and saying that he felt there was something wrong here in taping the New York Times reporter's calls into the company.

 

AMY GOODMAN: That was Michael Barbaro, the New York Times reporter?

 

GARY McWILLIAMS: Correct. And as a result of that, they did a month-long investigation of the activities, and he was dismissed thereafter. Now, we spoke with Mr. Gabbard, because he felt the company had misportrayed his activities. You know, they portrayed him as a rogue employee, when, in fact, he felt quite a bit of what he was doing was sanctioned by higher-ups and, in fact, he was pressured into looking -- you know, stopping those leaks by higher-ups in the company.

 

AMY GOODMAN: In a moment, we're going to be speaking with Nu Wexler, who is a spokesperson for Wal-Mart Watch, a group that is critical of Wal-Mart. But tell us his story.

 

GARY McWILLIAMS: Mr. Wexler, I think, was attempting to visit with reporters attending a Wal-Mart media event a couple years ago, and what Mr. Gabbard tells us was the security group was looking for ways of identifying him if he showed up at that meeting. And so, Mr. Gabbard went out on the web searching for information on Mr. Wexler and found a blog he had written for the South Carolina Democratic Party, rummaged through that South Carolina computer and found a folder containing Mr. Wexler's vacation photos. And he used those to access and to provide them to Wal-Mart corporate security to identify Mr. Wexler when he showed up.

 

AMY GOODMAN: A Wal-Mart spokesperson declined our request for an interview, but did issue a statement in response to Gabbard's accusations. Wal-Mart says, "This group is no longer operating in the same manner that it did prior to the discovery of the unauthorized recording of telephone conversations. There have been changes in leadership, and we have strengthened our practices and protocols in this area. Mr. Gabbard and another associate were terminated for their actions of unauthorized recordings of telephone conversations and interception of text messages, and the company self-reported the incident after learning of the phone recordings and interception of text messages situation. Like most major corporations, it is our corporate responsibility to have systems in place, including software systems, to monitor threats to our network, intellectual property and our people. These situations are limited to cases which are high risk to the company or our associates, such as criminal, fraud or security issues." Can you respond to this, Gary McWilliams?

 

GARY McWILLIAMS: Well, no. I mean, Wal-Mart issued that statement, I think, recently after our story appeared, and they issued a statement a month ago when Mr. Gabbard was terminated. But, essentially, you know, their original statement said that he had violated common practice at the company. Mr. Gabbard maintains there was no policy that prevented him from recording those calls and, in fact, he had been urged post-9/11 to record calls and look for keywords. So I'll leave it to Wal-Mart to decide.

 

AMY GOODMAN: You also talk about Wal-Mart monitoring shareholders. Explain.

 

GARY McWILLIAMS: Yeah, you know, it was a fairly uncommon practice, from what we've seen, to look at shareholders who submitted resolutions for the annual meeting. And in this year, what we saw was that the company took those list of shareholders who presented petitions and sent it to their security group to do a "threat assessment" of these people for their potential to disrupt the annual meeting if their petitions were refused. And, you know, we spoke with Dr. Sydney Kay, an 85-year-old retired science teacher, you know, who was among those looked at. And Mr. Kay says, "I'm a nobody. Why would they want to look at me?"

 

AMY GOODMAN: Overall, you did talk to corporate practices people. How common is this behavior on the part of a corporation?

 

GARY McWILLIAMS: For some things are very common. I think most Americans are told, if you're using your corporate email system, you know, the law has upheld the right of the company to look at that email. And there are just dozens of software packages that do things like filtering, web filtering, to look at what you're looking at over the internet, tracking the URL address, for instance. And companies are allowed to look at your email used on the corporate system. Typically what they don't do, though, is, you know, track your access to, say, Yahoo mail or Hotmail or Gmail.

 

AMY GOODMAN: And finally, the issue of Wal-Mart infiltrating an anti-Wal-Mart group, Up Against the Wall -- that's W-A-L -- what did you learn about that?

 

GARY McWILLIAMS: What Mr. Gabbard had told us was, you know, the company had become concerned that that group had protested at one of its managers' meetings, and it had read on internet sites that it was planning on going to its shareholder meeting last year, and potentially going with ACORN. And that concerned them. They wanted to find out about that, and so they ended up sending an employee to a protest group to find out what might be going on, whether ACORN and Up Against the Wal were joining forces. But it was fairly sophisticated. Again, you know, the employee had a wireless microphone. Mr. Gabbard said he rode around in the company's surveillance van to listen to what was going on and make sure the employee was protected. And then they used the information later to alert the local police department about the protesters' plans.

 

AMY GOODMAN: And so, the infiltrator, the long-haired infiltrator, went into a meeting, and the van was outside monitoring, because the infiltrator was wearing a microphone?

 

GARY McWILLIAMS: Essentially, yeah. It was outdoors. I mean, I think they actually recorded a protest group in Fayetteville, Arkansas, and the employee ended up joining the protest march down the street.

 

AMY GOODMAN: You know, it strikes me that years ago Ralph Nader really began his PIRGs with money that he got from General Motors, because it was exposed that they were monitoring and surveiling him.

 

GARY McWILLIAMS: I'm not familiar with that. But, you know, you have to understand that anytime you're in a public place, anyone can monitor you. They can take your picture. They can follow you, as long as it doesn't cross a line to harassment. And the same thing with -- we talked about the courts have upheld the legality of a company looking at email on a corporate network.

 

Wal-Mart has quite strict policies. I'll just go on. You know, they tell their employees any use of company computers or phones could be monitored. They also limit what their employees can look at on the internet. They're fairly restrictive in that regard.

 

AMY GOODMAN: Well, Gary McWilliams, I want to thank you very much for joining us, Wall Street Journal reporter, joining us from Houston, broke the story, "Inside Wal-Mart's 'Threat Research Operation.'"

 

To purchase an audio or video copy of this entire program,

click here for our new online ordering or call 1 (888) 999-3877.

 

http://www.democracynow.org/article.pl?sid=07/04/06/142238  

 

WAL-MART IS NOW THE WORLD'S BIGGEST CORPORATION, WITH MORE THAN ONE MILLION EMPLOYEES (THREE TIMES MORE THAN GENERAL MOTORS),

THE AVERAGE WALMART EMPLOYEE MAKES ONLY $15,000 A YEAR FOR FULL TIME WORK.

AND Most are held to part-time work.

Then there's China.

wal mart moved its worldwide purchasing headquarters to China in 1998.

Today, IT IS THE LARGEST IMPORTER OF CHINESE MADE PRODUCTS IN THE WORLD, BUYING $10 BILLION WORTH OF MERCHANDISE FROM CHINESE FACTORIES A YEAR.

The bottom-feeding labor policy of this one corporation is actually lowering standards in China, Even though China's minimum wage is 31 cents an hour--not even a living wage--these production workers are paid 13 cents an hour.

They also must pay for their own medical treatment and are fired if they are too ill to work.

The work is literally sickening, since there's no health and safety enforcement and these factories employ mostly young women and teenage girls.

With its dominance over its own 1.2 million workers and 65,000 suppliers this one company is the world's most powerful private force for lowering labor standards for middle class workers everywhere.

Using its sheer size, market clout, access to capital, and massive advertising budget, It hits a town or city neighborhood like a retailing neutron bomb, sucking out the economic vitality and all of the local character.

By slashing its retail prices way below cost when it enters a community, Wal-Mart can crush our groceries, pharmacies, hardware stores, and other retailers, then raise its prices once it has monopoly control over the market.

this giant eliminates three decent jobs for every two Wal-Mart jobs that it creates--and a store full of part-time, poorly paid employees hardly builds the family wealth necessary to sustain a community's middle-class living standard.

Instead of wal-mart's profits staying in town to be reinvested locally, the money is either to be used as capital for conquering yet another town or simply to be stashed in the family vaults

(by the way FIVE OF THE TEN RICHEST PEOPLE ON EARTH ARE WALTONS).

Wal-Mart's radical remaking of our labor standards and our local economies is occurring mostly without our knowledge or consent.

WHY SHOULD WE ACCEPT THIS?

paraphrased by Kevin Stuart
http://groups.myspace.com/stoptheempire
BOYCOTT WALMART NOW (5943 Members)

original article by Jim Hightower
http://www.hightowerlowdown.org
http://www.jimhightower.com
ps. article written 2004

Boycott Wal-Mart: Why you should wipe that smiling yellow face off

 

Wal-Mart is now the world's biggest corporation, having passed ExxonMobil for the top slot. It hauls off a stunning $220 billion a year from We the People (more in revenues than the entire GDP of Israel and Ireland combined).
Wal-Mart cultivates an aw-shucks, we're-just-folks-from-Arkansas image of neighborly small-town shopkeepers trying to sell stuff cheaply to you and yours. Behind its soft homespun ads, however, is what one union leader calls "this devouring beast" of a corporation that ruthlessly stomps on workers, neighborhoods, competitors and suppliers.

Despite its claim that it slashes profits to the bone in order to deliver "Always Low Prices," Wal-Mart banks about $7 billion a year in profits, ranking it among the most profitable entities on the planet.

Of the 10 richest people in the world, five are Waltons--the ruling family of the Wal-Mart empire. S. Robson Walton is ranked by London's "Rich List 2001" as the wealthiest human on the planet, having sacked up more than $65 billion in personal wealth and topping Bill Gates as No. 1.

Wal-Mart and the Waltons got to the top the old-fashioned way--by roughing people up. The corporate ethos emanating from the Bentonville headquarters dictates two guiding principles for all managers: Extract the very last penny possible from human toil, and squeeze the last dime from every supplier.

With more than one million employees (three times more than General Motors), this far-flung retailer is the country's largest private employer, and it intends to remake the image of the American workplace in its image--which is not pretty.

Yes, there is the happy-faced "greeter" who welcomes shoppers into every store, and employees (or "associates," as the company grandiosely calls them) gather just before opening each morning for a pep rally, where they are all required to join in the Wal-Mart cheer: "Gimme a 'W!'" shouts the cheerleader; "W!" the dutiful employees respond. "Gimme an A!'" And so on.

Behind this manufactured cheerfulness, however, is the fact that the average employee makes only $15,000 a year for full-time work. Most are denied even this poverty income, for they're held to part-time work. While the company brags that 70 percent of its workers are full-time, at Wal-Mart "full time" is 28 hours a week, meaning they gross less than $11,000 a year.

Health-care benefits? Only if you've been there two years; then the plan hits you with such huge premiums that few can afford it--only 38 percent of Wal-Marters are covered.

Thinking union? Get outta here! "Wal-Mart is opposed to unionization," reads a company guidebook for supervisors. "You, as a manager, are expected to support the company's position. ... This may mean walking a tightrope between legitimate campaigning and improper conduct."

Wal-Mart is in fact rabidly anti-union, deploying teams of union-busters from Bentonville to any spot where there's a whisper of organizing activity. "While unions might be appropriate for other companies, they have no place at Wal-Mart," a spokeswoman told a Texas Observer reporter who was covering an NLRB hearing on the company's manhandling of 11 meat-cutters who worked at a Wal-Mart Supercenter in Jacksonville, Texas.

These derring-do employees were sick of working harder and longer for the same low pay. "We signed [union] cards, and all hell broke loose," says Sidney Smith, one of the Jacksonville meat-cutters who established the first-ever Wal-Mart union in the United States, voting in February 2000 to join the United Food and Commercial Workers. Eleven days later, Wal-Mart announced that it was closing the meat-cutting departments in all of its stores and would henceforth buy prepackaged meat elsewhere.

But the repressive company didn't stop there. As the Observer reports: "Smith was fired for theft--after a manager agreed to let him buy a box of overripe bananas for 50 cents, Smith ate one banana before paying for the box, and was judged to have stolen that banana."

Wal-Mart is an unrepentant and recidivist violator of employee rights, drawing repeated convictions, fines, and the ire of judges from coast to coast. For example, the Equal Employment Opportunity Commission has had to file more suits against the Bentonville billionaires club for cases of disability discrimination than any other corporation. A top EEOC lawyer told Business Week, "I have never seen this kind of blatant disregard for the law."

Likewise, a national class-action suit reveals an astonishing pattern of sexual discrimination at Wal-Mart (where 72 percent of the salespeople are women), charging that there is "a harsh, anti-woman culture in which complaints go unanswered and the women who make them are targeted for retaliation."

Workers' compensation laws, child-labor laws (1,400 violations in Maine alone), surveillance of employees--you name it, this corporation is a repeat offender. No wonder, then, that turnover in the stores is above 50 percent a year, with many stores having to replace 100 percent of their employees each year, and some reaching as high as a 300 percent turnover!

Then there's China. For years, Wal-Mart saturated the airwaves with a "We Buy American" advertising campaign, but it was nothing more than a red-white-and-blue sham. All along, the vast majority of the products it sold were from cheap-labor hell-holes, especially China. In 1998, after several exposes of this sham, the company finally dropped its "patriotism" posture and by 2001 had even moved its worldwide purchasing headquarters to China. Today, it is the largest importer of Chinese-made products in the world, buying $10 billion worth of merchandise from several thousand Chinese factories.

As Charlie Kernaghan of the National Labor Committee reports, "In country after country, factories that produce for Wal-Mart are the worst," adding that the bottom-feeding labor policy of this one corporation "is actually lowering standards in China, slashing wages and benefits, imposing long mandatory-overtime shifts, while tolerating the arbitrary firing of workers who even dare to discuss factory conditions."

Wal-Mart does not want the U.S. buying public to know that its famous low prices are the product of human misery, so while it loudly proclaims that its global suppliers must comply with a corporate "code of conduct" to treat workers decently, it strictly prohibits the disclosure of any factory names and addresses, hoping to keep independent sources from witnessing the "code" in operation.

Kernaghan's NLC, acclaimed for its fact-packed reports on global working conditions, found several Chinese factories that make the toys Americans buy for their children at Wal-Mart. Seventy-one percent of the toys sold in the United States come from China, and Wal-Mart now sells one out of five of the toys we buy.

NLC interviewed workers in China's Guangdong Province who toil in factories making popular action figures, dolls and other toys sold at Wal-Mart. In "Toys of Misery," a shocking 58-page report that the establishment media ignored, NLC describes: 13- to 16-hour days molding, assembling, and spray-painting toys--8 a.m. to 9 p.m. or even midnight, seven days a week, with 20-hour shifts in peak season.

Even though China's minimum wage is 31 cents an hour--which doesn't begin to cover a person's basic subsistence-level needs--these production workers are paid 13 cents an hour.

Workers typically live in squatter shacks, 7 feet by 7 feet, or jammed in company dorms, with more than a dozen sharing a cubicle costing $1.95 a week for rent. They pay about $5.50 a week for lousy food. They also must pay for their own medical treatment and are fired if they are too ill to work.

The work is literally sickening, since there's no health and safety enforcement. Workers have constant headaches and nausea from paint-dust hanging in the air; the indoor temperature tops 100 degrees; protective clothing is a joke; repetitive stress disorders are rampant; and there's no training on the health hazards of handling the plastics, glue, paint thinners, and other solvents in which these workers are immersed every day.

As for Wal-Mart's highly vaunted "code of conduct," NLC could not find a single worker who had ever seen or heard of it.

These factories employ mostly young women and teenage girls. Wal-Mart, renowned for knowing every detail of its global business operations and for calculating every penny of a product's cost, knows what goes on inside these places. Yet, when confronted with these facts, corporate honchos claim ignorance and wash their hands of the exploitation: "There will always be people who break the law," says CEO Lee Scott. "It is an issue of human greed among a few people."

Those "few people" include him, other top managers, and the Walton billionaires. Each of them not only knows about their company's exploitation, but willingly prospers from a corporate culture that demands it. "Get costs down" is Wal-Mart's mantra and modus operandi, and that translates into a crusade to stamp down the folks who produce its goods and services, shamelessly building its low-price strategy and profits on their backs.

Worse, Wal-Mart is on a messianic mission to extend its exploitative ethos to the entire business world. More than 65,000 companies supply the retailer with the stuff on its shelves, and it constantly hammers each supplier about cutting their production costs deeper and deeper in order to get cheaper wholesale prices. Some companies have to open their books so Bentonville executives can red-pencil what CEO Scott terms "unnecessary costs."

Of course, among the unnecessaries to him are the use of union labor and producing goods in America, and Scott is unabashed about pointing in the direction of China or other places for abysmally low production costs. He doesn't even have to say "Move to China"--his purchasing executives demand such an impossible lowball price from suppliers that they can only meet it if they follow Wal-Mart's labor example. With its dominance over its own 1.2 million workers and 65,000 suppliers, plus its alliances with ruthless labor abusers abroad, this one company is the world's most powerful private force for lowering labor standards and stifling the middle-class aspirations of workers everywhere.

Using its sheer size, market clout, access to capital, and massive advertising budget, the company also is squeezing out competitors and forcing its remaining rivals to adopt its price-is-everything approach.

Even the big boys like Toys R Us and Kroger are daunted by the company's brutish power, saying they're compelled to slash wages and search the globe for sweatshop suppliers in order to compete in the downward race to match Wal-Mart's prices.

How high a price are we willing to pay for Wal-Mart's "low-price" model? This outfit operates with an avarice, arrogance and ambition that would make Enron blush. It hits a town or city neighborhood like a retailing neutron bomb, sucking out the economic vitality and all of the local character. And Wal-Mart's stores now have more kill-power than ever, with its Supercenters averaging 200,000 square feet--the size of more than four football fields under one roof. These things land splat on top of any community's sense of itself and devour local business.

By slashing its retail prices way below cost when it enters a community, Wal-Mart can crush our groceries, pharmacies, hardware stores, and other retailers, then raise its prices once it has monopoly control over the market.

But, say apologists for these Big-Box megastores, at least they're creating jobs. Wrong. By crushing local businesses, this giant eliminates three decent jobs for every two Wal-Mart jobs that it creates--and a store full of part-time, poorly paid employees hardly builds the family wealth necessary to sustain a community's middle-class living standard.

Indeed, Wal-Mart operates as a massive wealth extractor. Instead of profits staying in town to be reinvested locally, the money is hauled off to Bentonville, either to be used as capital for conquering yet another town or simply to be stashed in the family vaults (the Waltons, by the way, just bought the biggest bank in Arkansas).

Why should we accept this? Is it our country, our communities, our economic destinies--or theirs? Wal-Mart's radical remaking of our labor standards and our local economies is occurring mostly without our knowledge or consent. Poof--there goes another local business. Poof--there goes our middle-class wages. Poof--there goes another factory to China. No one voted for this ... but there it is. While corporate ideologues might huffily assert that customers vote with their dollars, it's an election without a campaign, conveniently ignoring that the public's "vote" might change if we knew the real cost of Wal-Mart's "cheap" goods--and if we actually had a chance to vote.

Much to the corporation's consternation, more and more communities are learning about this voracious powerhouse, and there's a rising civic rebellion against it. Tremendous victories have already been won as citizens from Maine to Arizona, from the Puget Sound to the Gulf of Mexico, have organized locally and even statewide to thwart the expansionist march of the Wal-Mart juggernaut.

Wal-Mart is huge, but it can be brought to heel by an aroused and organized citizenry willing to confront it in their communities, the workplace, the marketplace, the classrooms, the pulpits, the legislatures, and the voting booths. Just as the Founders rose up against the mighty British trading companies, so we can reassert our people's sovereignty and our democratic principles over the autocratic ambitions of mighty Wal-Mart.

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Jim Hightower

http://www.hightowerlowdown.org

http://www.jimhightower.com

http://www.alternet.org/columnists/1289/

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Jim Hightower

http://www.indyweek.com and Jim Hightower

 

Boycott Wal-Mart

Wal-Mart is now the world's biggest corporation, having passed
ExxonMobil for the top slot.

It hauls off a stunning $220 billion a year from We the People (more in
revenues than the entire GDP of Israel and Ireland combined).

Wal-Mart cultivates an aw-shucks, we're-just-folks-from-Arkansas image
of neighborly small-town shopkeepers trying to sell stuff cheaply to
you and yours.

 

WAL-MART’S GROWING PAINS

http://walmartwatch.com/blog/archives/wal_mart_could_see_increased_pressure_to_spin_off_sams_club_amidst_earnings/

WAL-MART'S GROWING PAINS
Wal-Mart's Midlife Crisis [BusinessWeek]


John E. Fleming, Wal-Mart's newly appointed chief merchandising officer, is staring hard at a display of $14 women's T-shirts in a Supercenter a few miles from the retailer's Bentonville (Ark.) headquarters. The bright-hued stretch T's carry Wal-Mart's own George label and are of a quality and stylishness not commonly associated with America's über-discounter. What vexes Fleming is that numerous sizes are out of stock in about half of the 12 colors, including frozen kiwi and black soot.

Fleming may be America's most powerful merchant, but a timely solution is beyond him even so. Wal-Mart failed to order enough of these China-made T-shirts last year, and so they and other George-brand basics will remain in short supply in most of its 3,443 U.S. stores until 2007's second half, depriving the retailer of tens of millions of dollars a week it sorely needs. "The issue with apparel is long lead times," says the quietly intense Fleming, who spent 20 years at Target Corp. (TGT ) before joining Wal-Mart Stores Inc. (WMT ) "We will get it fixed."

For nearly five decades, Wal-Mart's signature "everyday low prices" and their enabler—low costs—defined not only its business model but also the distinctive personality of this proud, insular company that emerged from the Ozarks backwoods to dominate retailing. Over the past year and a half, though, Wal-Mart's growth formula has stopped working. In 2006 its U.S. division eked out a 1.9% gain in same-store sales—its worst performance ever—and this year has begun no better. By this key measure, such competitors as Target, Costco (COST ), Kroger (KR ), Safeway (SWY ), Walgreen's (WAG ), CVS, and Best Buy (BBY ) now are all growing two to five times faster than Wal-Mart.

Wal-Mart's botched entry into cheap-chic apparel is emblematic of the quandary it faces. Is its alarming loss of momentum the temporary result of disruptions caused by transitory errors like the T-shirt screwup and by overdue improvements such as the store remodeling program launched last year? Or is Wal-Mart doing lasting damage to its low-budget franchise by trying to compete with much hipper, nimbler rivals for the middle-income dollar? Should the retailer redouble its efforts to out-Target Target, or would it be better off going back to basics?

If Wal-Mart seems short of answers at the moment, it might well be because there aren't any good ones. Increasingly, it appears that America's largest corporation has steered itself into a slow-growth cul de sac from which there is no escape. "There are a lot of issues here, but what they add up to is the end of the age of Wal-Mart," contends Richard Hastings, a senior analyst for the retail rating agency Bernard Sands. "The glory days are over."

Simple mathematics suggest that a 45-year-old company in an industry growing no faster than the economy as a whole will struggle to sustain the speedy growth rates of its youth. In Wal-Mart's case, this difficulty is exacerbated by its great size and extreme dominance of large swaths of the U.S. retail market. Wal-Mart already controls 20% of dry grocery, 29% of nonfood grocery, 30% of health and beauty aids, and 45% of general merchandise sales, according to ACNielsen.

However, the expansion impulse is as deeply embedded in Wal-Mart's DNA as its allegiance to cut-rate pricing. Wal-Mart was able to boost total U.S. revenues by 7.2% last year by opening new stores at the prodigious rate of nearly one a day. According to Wal-Mart CEO H. Lee Scott Jr., the company plans to sustain this pace for at least the next five years. In fact, he is on record saying that room remains in the U.S. for Wal-Mart to add 4,000 Supercenters—the largest of its store formats by far—to the 2,000 it now operates.

Does Scott, 58, recognize any limits whatsoever to Wal-Mart's growth potential in the U.S., which accounted for 78% of its $345 billion in sales last year? "Actually, and I know it's going to sound naive to you, I don't," he replies. "The real issue is, are [we] going to be good enough to take advantage of the opportunities that exist?"

TOO CLOSE FOR COMFORT
Wall Street does not share Scott's bullishness, to put it mildly. Wal-Mart shares are trading well below their 2004 high and have dropped 30% in total since Scott was named CEO in 2000, even as the Morgan Stanley (MS ) retail index has risen 180%. "The stock has been dead money for a long time," says Charles Grom, a JPMorgan Chase & Co. (SPM ) analyst.

Even money managers who own Wal-Mart's shares tend to see the retailer as a beaten-down value play, not a growth company. "I'd be surprised if true growth-oriented investors were involved at this point," says Walter T. McCormick, manager of the $1.2 billion Evergreen Fundamental Large Cap Fund, which began buying the stock a year ago. "The issue the Street has is market saturation: We may be in the seventh inning of a nine-inning game."

One can argue that the deceleration of Wal-Mart's organic growth is a function of the aging of its outlets, given that same-store sales rates slow as stores mature. Outlets five years or older accounted for 17% of all U.S. Supercenters in 2000 and 44% in 2006, and will top 60% in 2010, according to HSBC (HBC ) analyst Mark Husson. "There's an inevitability of bad middle age," he says.

Meanwhile, the underlying economics of expansion have turned against Wal-Mart, even as it relies increasingly on store-building to compensate for sagging same-store sales. On balance, the new Supercenters are just not pulling in enough sales to offset fully the sharply escalating costs of building them. Part of the problem is that many new stores are located so close to existing ones that Wal-Mart ends up competing with itself. All in all, the retailer's pretax return on fixed assets, which includes things such as computers and trucks as well as stores, has plunged 40% since 2000.

Even many analysts with a buy on Wal-Mart want it to follow the lead of McDonald's Corp. (MCD ) and cut way back on new-store building to concentrate instead on extracting more value from existing stores, which vary wildly in their performance. Wal-Mart disclosed a year and a half ago that same-store sales were rising 10 times, or 1,000%, faster at the 800 best-managed outlets than at the 800 worst-run ones. Equally shocking was its admission that 25% of its stores failed to meet minimum expectations of cleanliness, product availability, checkout times, and so on.

Scott is acutely aware of the Street's discontent. "We have to find a way to give our shareholders back the returns that they need through some mechanism," he acknowledges. In March, Wal-Mart boosted its dividend 31%. Apparently, the board also is considering spinning off Sam's Club, the warehouse club division that is a perennial also-ran to Costco.

Wal-Mart announced late last year that it would trim its customary 8% annual addition to U.S. square footage to 7% in 2007. At the moment, though, slamming on the brakes is out of the question. Says Scott: "If you stop the growth at Wal-Mart, you'd be silly to think that [alone] means you're going to have better stores."

Wal-Mart's "home office" has taken a series of steps to improve the performance of its far-flung store network. Last year it implemented a whole new supervisory structure that required many of its 27 regional administrators to move out of Bentonville and live in the districts they manage. In April, Scott removed the executive in charge of U.S. store operations and put her in charge of corporate personnel instead.

The number of stores falling below the threshold of minimum customer expectations has declined but remains "more than would be acceptable," says Scott, who is surprisingly philosophical about the persistence of mediocrity. Asked why it has been so difficult to fix bad stores, HE replies: "That's a very good question. It's a question I ask all the time."

The polite, self-deprecating Scott is no Robert L. Nardelli, whose ouster as Home Depot Inc.'s (HD ) chief had as much to do with his abrasive personality as the chain's business problems. That said, Wal-Mart's stock has performed worse under Scott than Home Depot's did under Nardelli. "The Street is going to look to the back half of 2007 for evidence of improvement," says an adviser to a large, longtime Wal-Mart shareholder. "If that doesn't happen, you're going to see a tremendous amount of pressure."

Scott & Co. already are struggling to cope with mounting sociopolitical backlash to Wal-Mart's size and aggressive business practices. Over the past decade, dozens of lawsuits were brought by employees claiming to be overworked and underpaid, including the mother of all sex discrimination class actions. Organized labor set up two Washington-based organizations to oppose the antiunion employer at every turn. And hundreds of municipalities across the country erected legal obstacles of one kind or another.

Wal-Mart's initial reaction to the gathering storm of opposition was to ignore it and maintain the defiant insularity that is a legacy of its Ozarks origins. "The best thing we ever did was hide back there in the hills," Sam Walton, the company's legendary founder, declared shortly before his death in 1992.

In the past few years, Scott has reluctantly brought Wal-Mart out from behind its Bentonville barricades. Virtually from scratch, this famously conservative company has built a large public and government relations apparatus headed by Leslie A. Dach, a veteran Washington political operative of pronounced liberal bent. Few CEOs have embraced environmental sustainability as avidly as has Scott, who also broke with the Republican orthodoxy of his predecessors by advocating a hike in the federal minimum wage.

It's not just rhetoric: Wal-Mart has indeed made substantive reforms in some areas. It has struck up effective working relationships with many of the very environmental groups it once disdained. No less dramatically, the company has added three women (one is Hispanic) and two African American directors to its board and also tied all executive bonuses to diversity goals.

It turns out, though, that there is a dark, paranoid underside to Wal-Mart's visible campaign of outreach. What began as an attempt by Wal-Mart's Threat Research and Assessment Group to detect theft and pro-union sympathies among store workers grew into surveillance of certain outside critics, consultants, stockholders, and even Wal-Mart's board. Bruce Gabbard, a security technician fired for allegedly unauthorized wiretapping of a New York Times reporter, has described himself as "the guy listening to the board of directors when Lee Scott is excused from the room."

Wal-Mart's spreading Spygate scandal is perhaps the most damaging in a long sequence of PR disasters, including last year's conviction of former No. 2 executive Thomas M. Coughlin on fraud and tax evasion charges stemming from embezzlement of company funds. Coughlin, a Walton protégé who had been Scott's leading rival for the CEO post, is serving a sentence of 27 months of house arrest.

There is no way of measuring how much business Wal-Mart is losing to competitors with more benign reputations. According to a recent survey conducted by Wal-Mart itself, though, 14% of Americans living within range of one of its stores—which takes in 90% of the population—are so skeptical of the company as to qualify as "conscientious objectors."

But the Arkansas giant's fundamental business problem is that selling for less no longer confers the overwhelming business advantage it once did. Low prices still define the chain's appeal to its best customers, the 45 million mostly low-income Americans who shop its stores frequently and broadly. But the collective purchasing power of these "loyalists," as Wal-Mart calls them, has shriveled in recent years as hourly wages have stagnated and the cost of housing and energy have soared.

More affluent shoppers also walk Wal-Mart's aisles in great numbers, but they tend to buy sparingly, loading up on toothpaste, detergent, and other "consumables" priced barely above cost while shunning higher-margin items such as clothes and furniture. To the selective middle-income shopper, quality, style, service, and even store aesthetics increasingly matter as much as price alone. "Here's the big thought Wal-Mart missed: Price is not enough anymore," says Todd S. Slater, an analyst at Lazard Capital Markets.

BACKWOODS KNOWHOW
At first, Wal-Mart management blamed its loss of momentum mostly on rising gasoline prices—a theory undercut when same-store sales kept falling even as the cost of gas receded during the latter half of 2006. Today, Wal-Mart executives are more willing to acknowledge the X factor of intensified competition. Says Fleming: "We're now up against world-class competitors that are each taking a slice of our business."

Wal-Mart not only was slow to recognize this threat but also responded haphazardly once it did. The nub of the problem was that the discounter had relied for so long on selling for less that it did not know any other way to sell. Wal-Mart did not begin to build a marketing department worthy of the name until Fleming was named to the new position of chief marketing officer in spring, 2005, an appointment Scott hailed as "an extraordinary move for us."

Founded in 1962, Wal-Mart rose to dominance on the strength of its mastery of retailing's "back-end" mechanics. Forced by the isolation of the Ozarks to do for itself what most retailers relied on others to do for them, Wal-Mart built a cutting-edge distribution system capable of moving goods from factory loading dock to store cash register faster and cheaper by far than any competitor. It added to its cost advantage by refusing to acquiesce to routine increases in wholesale prices, continually pressing suppliers to charge less.

Walton, who was both a gifted merchant and a born tightwad, also pinched pennies in every other facet of business, from wages and perks (there were none) to fixtures and furnishings. Aesthetics counted for so little that when the retailer finally put down carpet in its stores it took care to choose a color that matched the sludgy gray-brown produced by mixing dirt, motor oil, and the other contaminants most commonly tracked across its floors. To Wal-Mart, the beauty of its hideous carpet was that it rarely needed cleaning.

Low costs begat low prices. Instead of relying on promotional gimmickry, Wal-Mart sold at a perpetual discount calculated to make up for in volume what it lost in margin. Walton's philosophy was price it low, pile it high, and watch it fly. His belief in everyday low prices made him a populist hero even as he built America's largest fortune. (His descendants still own 40% of Wal-Mart's shares, a stake worth $80 billion.) Regulators forced "Mr. Sam" to modify his slogan of "Always the lowest price" to the hedged "Always low prices!" But hundreds of retailers went broke trying to compete with Wal-Mart on price just the same.

In many ways, Wal-Mart has remained reflexively tight-fisted under Scott, a 28-year company veteran who trained at Walton's knee and rose to the top through trucking and logistics. Last year, Wal-Mart began remodeling the apparel, home, and electronics sections in 1,800 stores, replacing miles of that stain-colored carpeting with vinyl that looks like wood. To Fleming, the new "simulated wood" floor is all about aesthetic improvement. His boss takes the classical Wal-Mart view. "The truth is that vinyl costs less," Scott says. "And the maintenance on the vinyl costs less than the maintenance on the carpet."

Yet Wal-Mart is neither as low-cost nor as low-price a retailer as it was in Walton's day, or even when Scott moved up to CEO. Most dramatically, overhead costs jumped 14.8% in 2006 alone and now amount to 18.6% of sales, compared with 16.4% in Scott's first year—a momentous rise in a business that counts profit in pennies on the dollar.

The imperatives of reputational damage control have prompted Bentonville to add hundreds of staff jobs in public relations, corporate affairs, and other areas that the company happily ignored when it was shielded by the force field of Walton's folksy charisma. And as the nation's largest electricity consumer and owner of its second-largest private truck fleet, Wal-Mart was hit doubly hard by the explosion of energy costs.

Wal-Mart also has purposefully, if not entirely voluntarily, inflated its cost base in expanding far beyond its original rural Southern stronghold. It is far more expensive to buy land and to build, staff, and operate stores in the large cities that are the final frontier of Wal-Mart's expansion than in the farm towns where it began. Then, too, the company is encountering mounting resistance as it pushes deeper into the Northeast, Upper Midwest, and West Coast, requiring it to retain legions of lawyers and lobbyists to fight its way into town.

NARROWING THE GAP
Under Scott, Wal-Mart even blunted its seminal edge in distribution by letting billions of dollars in excess inventories accumulate at mismanaged stores. A dubious milestone was reached in 2005 as inventories rose even faster than sales. "You'd see these big storage containers behind stores, but what was more amazing was that [local] managers were going outside Wal-Mart's distribution network to subcontract their own warehouse space," says Bill Dreher, a U.S. retailing analyst for Deutsche Bank (DB ).

Over the past decade, top competitors in most every retailing specialty have succeeded in narrowing their cost gap with Wal-Mart by restructuring their operations. They eliminated jobs, remodeled stores, and replaced warehouses, investing heavily in new technology to tie it all together. Unionized supermarkets even managed to chip away at Wal-Mart's nonunion-labor cost advantage, signaling their resolve by taking a long strike in Southern California in 2003-04. The end result: Rival chains gradually were able to bring their prices down closer to Wal-Mart's and again make good money.

Consider the return to form of Kroger Co., the largest and oldest U.S. supermarket chain. Cincinnati-based Kroger competes against more Wal-Mart Supercenters—1,000 at last count—than any other grocer. Which is why until recently the only real interest Wall Street took in the old-line giant was measuring it for a coffin. Today, though, a rejuvenated Kroger is gaining share faster in the 32 markets where it competes with Wal-Mart than in the 12 where it does not.

A recent Bank of America (BAC ) survey of three such markets—Atlanta, Houston, and Nashville—found that Kroger's prices were 7.5% higher on average than Wal-Mart's, compared with 20% to 25% five years ago. This margin is thin enough to allow Kroger to again bring to bear such "core competencies" as service, quality, and convenience, says BofA's Scott A. Mushkin, who recently switched his Kroger rating to buy from sell. "We're saying the game has changed, and it looks like it has changed substantially in Kroger's favor," he says.

While Wal-Mart vies with a plethora of born-again rivals for the trade of middle-income Americans, it also must contend on the low end of the income spectrum with convenience and dollar-store chains and with such "hard discounters" as Germany's Aldi Group. These no-frills rivals are challenging Wal-Mart's hold over budget-minded shoppers by underpricing it on many staples.

To right Wal-Mart's listing U.S. flagship division, Scott installed Eduardo Castro-Wright as its president and CEO in fall, 2005. The Ecuador-born, U.S.-educated Castro-Wright, now 51, worked for RJR Nabisco and Honeywell International Inc. (HON ) before joining Wal-Mart in 2001. In Castro-Wright's three years as CEO of Wal-Mart Mexico, revenues soared 50%, powered by sparkling same-store sales growth of 10% a year.

To date, Castro-Wright has fallen so far short of replicating the miracle of Mexico that in January he had to publicly deny rumors that he was about to be transferred back to international. Instead, Scott shifted the vice-chairman over Castro-Wright to new duties. That the U.S. chief now reports directly to Scott both solidifies Castro-Wright's status and ups the pressure on him to show results.

Castro-Wright can point to progress on the cost side of the ledger. By tightening controls over the stores, headquarters has halved the growth rate of inventories to 5.6% from 11.5% two years ago. Wal-Mart also has squeezed more productivity out of its 1.3 million store employees for eight consecutive quarters. This was done by capping wages for most hourly positions, converting full-time jobs to part-time ones, and installing a sophisticated scheduling system to adjust staffing levels to fluctuations in customer traffic.

Wal-Mart has found other new ways to economize, notably by cutting out middlemen to do more contract manufacturing overseas. The company's much publicized green initiatives have tempered criticism from some left-leaning opponents but are perhaps best understood as a politically fashionable manifestation of its traditional cost-control imperative.

By any conventional measure, Wal-Mart remains a solidly profitable company. Rising overhead costs have cut into net income, which in 2006 rose a middling 6.7%, a far cry from the double-digit increases of the 1990s. Return on equity continues to top 20%, however, and U.S. operating margins actually have widened a bit under Castro-Wright, as costs have risen a bit slower than Wal-Mart's average selling price.

Evidently, though, it is going to take a lot more than Castro-Wright's workmanlike adjustments to revive Wal-Mart's moribund stock. In the end, Scott's aversion to a McDonald's-style strategic about-face leaves Wal-Mart no alternative but to try to grow its way back into Wall Street's good graces. But if opening a new Wal-Mart or Sam's Club almost every day can't move the dial, what will?

Foreign markets present an intriguing mix of potential and peril for Wal-Mart, which first ventured abroad in 1992. Although the company now owns stores in 13 countries, the lion's share of those revenues comes from Mexico, Canada, and Britain. In 2006 international revenues rose 30%, to $77 billion. At the same time, though, Wal-Mart's long-standing struggles to adapt its quintessentially American low-cost, low-price business model to foreign cultures was underscored by the $863 million loss it took in exiting Germany.

Wal-Mart is the rare U.S. company that is more politically constrained at home than abroad in angling for outsize growth opportunities. In March it withdrew its application for a Utah bank charter just before a congressional committee was set to convene hearings. The retreat marks an apparent end to its decade-long campaign to diversify into consumer banking.

Although Wal-Mart regularly makes sizable acquisitions abroad, it is in no position to respond in kind to such domestic dagger thrusts as CVS's $26.5 billion acquisition of pharmacy benefits manager Caremark Rx. "That deal is a real threat, but Wal-Mart would have huge antitrust problems if it made an acquisition of any size," says a top mergers-and-acquisitions banker. "They are kind of stuck."

In the end, Wal-Mart seems unlikely to regain its stride unless it can solve what might be the diciest conundrum in retailing today. That is, can it seduce tens of millions of middle-income shoppers into stepping up their purchases in a major way without alienating its low-income legions in the process?

Largely because of the pressing need to differentiate itself from Wal-Mart, Target began grappling with this very puzzle more than a decade ago and gradually solved it with the cheap-chic panache that transformed it into "Tar-zhay." Says the president of a leading apparel maker: "Target has an awareness of what's happening in fashion equal to a luxury player, maybe greater. They have set the bar very high."

Scott acknowledged as much in making former Target exec Fleming chief marketing officer, reporting to Castro-Wright. Fleming, who had been CEO of Wal-Mart.com, went outside to fill every key slot in building a 40-person marketing group from scratch. He supported Wal-Mart's move into higher-priced, more fashionable apparel and home furnishings with the splashiest marketing the retailer had ever done, buying ad spreads in Vogue and sponsoring an open-air fashion show in Times Square.

Wal-Mart's top management all the way up to and including Scott presumed that Wal-Mart could run like Tar-zhay before it had learned to walk. "What Wal-Mart tried to do smacks of a kind of arrogant attitude toward fashion—that you can just order it, put it down, and people will buy it," says Eric Beder, a specialty retailing analyst at Brean Murray, Carret & Co.

CRASH COURSE
Wal-Mart did everything at once and precipitously, introducing ads even as it was flooding stores with new merchandise and before it could complete its store remodeling program. Bentonville was learning marketing on the fly and did not even attempt to adopt the sort of formal, centralized merchandise planning at which Target and many big department-store chains excel. Instead, Wal-Mart relied on dozens of individual buyers to make critical decisions as it pushed hard into unfamiliar product areas.

How else to explain why a retailer whose typical female customer is thought to be a size 14 loaded up on skinny-leg jeans? Or why Wal-Mart's cheap-chic Metro7 line got off to a flying start in 350 stores only to crash and burn as it was rolled out to 1,150 more? Or why Wal-Mart not only severely misread demand for George-brand basics but also is unable to replenish its stocks for months on end while "fast-fashion" chains such as H&M easily turn over entire collections every six weeks?

Scott loved Wal-Mart's bold new direction until he hated it, his enthusiasm diminishing in sync with same-store sales throughout much of 2006. "We are going to sell for less," Scott says now, emphasizing a return to Wal-Mart's first principles. "I believe that long after we are gone, the person who sells for less will do more business than the person who doesn't."

Yet Scott also signaled his continuing commitment to the pursuit of the middle-income shopper by promoting Fleming to yet another new post, chief merchandising officer, as part of a January shakeup of the senior ranks. Although Wal-Mart no doubt has sponsored its last glitzy runway show, Fleming insists that the company is sticking with its underlying strategy of "customer relevance"—that is, of moving beyond a monolithic focus on price to try to boost sales by targeting particular customers in new ways. "We're not going to back off," he vows. "We've learned certain lessons. Some things we'll build on, some things we won't."

While the look of its stores is primarily a function of how much Wal-Mart chooses to spend on them, the retailer is unlikely ever to come up with an ambience conducive to separating the affluent from their money without changing its whole approach to labor. The chain's dismal scores on customer satisfaction surveys imply that it is understaffing stores to the point where many of them struggle merely to meet the demands of its self-service format.

It is entirely possible even so that Wal-Mart in time will figure out how to sell vast quantities of dress-for-success blazers, 400-thread-count sheets, laptop computers, and even prepackaged sushi. But as Wal-Mart closes in on $400 billion in annual revenues, it is going to have to overachieve just to get same-store sales rising again at 3% to 5% a year.

The odds are that Scott, or his successor, will have to choose between continuing to disappoint Wall Street or milking the U.S. operation for profits better reinvested overseas. Only by hitting the business development equivalent of the lottery in countries like China, India, or Brazil can the world's largest retailer hope to restore the robust growth that once seemed like a birthright.

Posted on Friday, April 20, 2007

Ban the Waltons from the Board of Directors and like minded people.

Wal-Mart DIED when Samuel "Mr. Sam" Moore Walton, James "Bud" Lawrence Walton, and finally this year when Helen Robson-Walton

WAL-MART COULD SEE INCREASED PRESSURE TO SPIN OFF SAM’S CLUB AMIDST

http://walmartwatch.com/blog/archives/wal_mart_could_see_increased_pressure_to_spin_off_sams_club_amidst_earnings/  

WAL-MART COULD SEE INCREASED PRESSURE TO SPIN OFF SAM'S CLUB AMIDST EARNINGS WOES - ANALYSIS

Amidst lackluster earnings, calls for retail giant Wal-Mart to spin off of its thriving warehouse discount chain, Sam's Club, could become louder.

Analyst reports in recent months have suggested that a spin-off of Sam's Club could make sense. One January Citigroup analyst report even suggested a spin-off could occur in 2007, although admittedly that was a "stretch."

Wal-Mart last Tuesday announced quarterly net income of USD 2.83bn on net revenues of USD 86.4bn. US store sales for the parent company were down 0.1%, not including Sam's Club, which had a 4.7% rise in sales. Despite representing an overall increase in income and revenues from the same quarter a year ago, the company's stock declined in reaction to the announcement.


With Wal-Mart's management focused on improving its core business, shareholder value could be unlocked by spinning off Sam's Club, analysts agreed. As one explained, although Sam's Club, with USD 41bn in revenues, is not large enough to impact Wal-Mart's USD 348bn in total revenues, a spin-off might unlock unrealized value in the division's business. If Wal-Mart were to seriously consider spinning off Sam's Club the retailer's stock would also go up, he added.

And although it was unlikely that Sam's Club was distracting Wal-Mart management from focusing on improving the parent retailer, Sam's Club could be distracted by its parent's woes, one suggested.

Two analysts said they thought it was unlikely that Wal-Mart would spin-off Sam's Club in the near term, however, as management's first priority was to get higher returns on the US business.

The Wal-Mart spokesperson said the company was pleased with Sam's Club's progress. "We remain dedicated to Sam's Club." During the company's prerecorded Q1 2008 earnings call, CEO Lee Scott said Sam's Club's profits grew faster than its revenues. This was the seventh consecutive quarter this had occurred, he added. Sam's Club accounted for over 12% of Wal-Mart's total sales in Q1, a Wal-Mart spokesperson said.

For the company to spin-off one of its divisions, it would need the approval of the Walton family, which has a controlling stake in the business. The Walton Family has a little more than a 40% stake in Wal-Mart. Every Walton owning a stake might not be against the idea, the third analyst speculated.

For now, Wal-Mart is concentrating on its three year project during which time it plans to remodel 1800 stores, the spokesperson said. Wal-Mart has a market capitalization of USD 194bn.


Posted on Wednesday, May 23, 2007


COMMENTS
People who talk about spin-offs as the new salvation of stock price are sheep. Wal-Mart is a mature company. This means that their US Wal-Mart Stores division sales and profits will most likely not grow at double digits going forward. However, Sam's Club, Neighborhood Market and the International division still have huge growth potential. Wal-Mart is not a hot growth company thus they do not have have a hot growth stock. Why would Wal-Mart want to get rid of Sam's, which is churning out the profits? Look at what originally happened to AT&T. They bought everything in sight, then they divested everything but their long distance before selling themselves to a Baby Bell, a former subsidiary of AT&T before its breakup in 1984.

I always laugh when reporters who have never done anything except write stories try and tell a very successful multi-billion dollar corporation how to conduct its business. And I am so sick of this obsession with short term stock price. Stock price has no direct relation to underlying value. It has quite a bit to do with speculators. Stockbrokers and investment bankers make a living off trading and pushing stocks. They are responsible for this mentality that the be all/end all of a company is its stock price. We are now seeing a lot of private equity flood the market and take companies private in order to run the business free of stock price pressure. After 5-7 years, the private equity firms will sell the business to another firm or issue stock based on the now higher value of the business. Private equity is a way for companies to improve their fundamentals away from the glare of the do nothing Wall Street crowd.

My prediction? Wal-Mart keeps Sam's and uses the cash flow to improve profitability, buy back stock, increase dividends and cut debt.

Just my thoughts............

Nick in
Wednesday, May 23 at 07:20 PM

I thought this website was about bad things walmart is up to.
Who could give a darn about how they operate.

John in Joplin, MO
Thursday, May 24 at 12:34 AM

I hope Walmart doesn't fall apart. That means this website will be called Target Watch.

I like Target, and I hate Walmart mainly because it is run by southern hillbillies.

Shop at Target. It is based in a blue state.

Stan in Mankato, Minnesota
Thursday, May 24 at 12:44 AM

"Blue Horseshoe hates WalMart"

In fact, Costco has outperformed Wal-Mart on the stock market over the last five years. The real reason for the difference in compensation and benefits is that Costco employees have much lower turnover, better interaction with customers and are more productive than Wal-Mart's workers.
For example, Costco Wholesale pays its workers $17 an hour on average, while its competitor, Wal-Mart's Sam's Club, pays only $10 an hour on average

James O'Toole and Edward E. Lawler III are professors at the University of Southern California's Marshall School of Business and authors of The New American Workplace (Palgrave-MacMillan, 2006).
James O'Toole and Edward E. Lawler III 04.25.07, 6:00 AM ET
http://www.forbes.com/2007/04/24/corporate-layoffs-costs-oped-cx_jot_0425jobs

Ahead of the Bell: Costco Wholesale
April 17, 2007 7:48 AM ET
NEW YORK (AP)

After combing Costco's books and adjusting for his new estimates, Kaiser raised his price target on Costco's stock to $65 from $56. The new price target is about 19 percent higher than the retailer's stock's close at $54.40 on the Nasdaq Stock Market Monday.
Kaiser upgraded shares of Costco, which earned $1.1 billion last year on $60.2 billion sales, to "Outperform" from "Market Perform."
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&Date=20070417&ID=6756370

"Look at Costco Wholesale (COST, news, msgs), says Hodgson. The retailer's stock is up 60% in the past two years."(from 2005)



""Given Costco's performance, the question for Wall Street shouldn't be why Costco isn't more like Wal-Mart. Rather, why can't Wal-Mart deliver high shareholder returns and high living standards for its workforce? Says Costco CEO James D. Sinegal: "Paying your employees well is not only the right thing to do but it makes for good business."

Few things are harder to put up with than the annoyance of a good example. Mark Twain, Pudd'nhead Wilson (1894)

SanDiegoView in
Thursday, May 24 at 02:50 AM

I worked for Sams Club twice. Everyone knew that it
would not survive if not carried by WMT. If Sams were a free standing company it would fold in a yr.

Bentonville does all the behind the scenes operations for Sams and just absorbs it as part of WMT. Here in the great NW, where Costco was started, there are only two Sams in WA state and those were aquired as part of a buyout in 93.
Costco goes into the South and takes Biz from Sams and
BJ's. And pays well.

Phil in WA in
Thursday, May 24 at 04:45 AM

Sam's Club is becoming unbearable to work for. I know many men and women of all different ranks within the company that have either left, or are looking. Retail talent is hard to find and the company doesn't realize that they are losing good people for silly reasons. They have changed the way that managers are paid in a very negative way. It is good for low volume club managers. But not so good for assistants, or higher volume club managers. They are very focussed on expense control, yet they added the worthless position of market human resource manager. That makes no sense. If the market managers and club managers cannot perform those functions, they shouldn't be in their positions. The company is so scared of being sued by hourly associates that they are mistreating management. It is insane to work for a company that uses fear and intimidation to "motivate" its managers. Most all of the mhrm's are from outside the company and don't know anything about the culture. Probably the biggest waste of money that I have seen in my 20 years. My advice to anyone working in management is to not let your quality of life suffer another day for a company that doesn't care about you, or your contributions.

Bill in Colorado
Thursday, May 24 at 10:20 AM

...the do nothing Wall Street crowd.

Those with long memories (pre-2000) can recall when Wal-Mart was the darling of this same do nothing Wall Street crowd.

Question: How many times has WMT split under the leadership of Lee Scott?

Answer: Zero!*

*WMT's last split(2:1) occurred April 20, 1999.

Ken V in Texas
Thursday, May 24 at 11:22 AM

It would be interesting if they split and became two instead of one. Then we would have true figures of Wal-Mart.

It has not been in the news but a few Sam's has already closed

guest in
Thursday, May 24 at 01:13 PM

This is a test of your system.

Sam Thatguy in
Thursday, May 24 at 01:14 PM

A manager threw a dart, which by chance, lodged in my neck while looking Izod shorts at Sam's last week in San Antonio.

I am sure this is not an isolated incident.

Mike in San Antonio
Thursday, May 24 at 01:42 PM

SDV

I am sure that dancers at Scores earn much more than dancers at some local truck stop strip club. But if the local girls are earning $300 per night vs. $500 at Scores, are they really worse off?

My point is, it really doesn't matter what one company pays vs. another company. If Company A pays $20 per hour and Company B pays $8 per hour, and Company B has no trouble finding qualified applicants, why would Company B pay $20 per hour?

And this site is Wal-Mart Watch not Costco Cheering Section. If you hate Wal-Mart, don't shop or work there. If you like Costco, shop there or get a job there. We live in a free country. But you have ZERO right to tell others where they will or will not work or shop. NO RIGHT. And you have no right to force workers to join your corrupt union. Because that is what this is really about, isn't it?

Why won't you cowards admit that the ONE AND ONLY REASON for these smear sites is to pressure Wal-Mart into forcing its employees to join a union that has been unable to convince the employees to join the UFCW through the democratic union process?

Nick in
Thursday, May 24 at 06:31 PM

"Why won't you cowards admit that the ONE AND ONLY REASON for these smear sites is to pressure Wal-Mart into forcing its employees to join a union that has been unable to convince the employees to join the UFCW through the democratic union process?" [Nick]

Why don't you admit tht employees joined a union through a democratic union process and your cowardly Walmart smeared the employee's buy putting pressure on them not to join when they closed the store in Jonquiere Quebec?

Cut the BS Nick.

R E M E M B E R
J O N Q U I E R E
Q U E B E C
Home of Walmart Worker Abuse
We will never forget what you did Walmart.
Never.

Alex in Ontario, Canada
Thursday, May 24 at 09:08 PM

OK

1 Form union in store.
2. Union costs make business unaffordable.
3 Store must close because it would be unprofitable.

We'll that was easy.

btw, form union so that dues will be collected from the membership in order to stuff the coffers of UFCW

Mary in
Thursday, May 24 at 10:31 PM

Why won't you cowards admit...

Will someone please loan Nick their copy of How to Win Friends and Influence People?

2. Union costs make business unaffordable.

That's the weak link in your argument, Mary.

Ken V in Texas
Friday, May 25 at 03:42 AM

Ken

Actually, I have read that book. It is useless for dealing with people like yourself, people lacking in logic, humility, reason or common sense.

You claim that Mary's "weak link" is her claim that union costs make business unaffordable. Well, all the available evidence supports her claim. Union membership is at an all-time low in this country. Less than 8% of private sector employees belong to a union, despite the fact that this economy has record employment and a record number of available jobs. This means that many former union workers are now working in non-union jobs! Right to work states are getting all the new factories, ie. Thyssen Krupp's $4 billion steel plant in Alabama, SteelCorr in Mississippi, Hyundai in Alabama and Toyota, Honda & Nissan as well. UAW workers are losing tens of thousands of jobs per year and GM and Ford have offered buyouts to ALL of their US employees. This means they believe they can compete with a US workforce. Meanwhile, Toyota and Honda employ more than 25,000 Americans thus far in high paying factory jobs.

Why did Kroger, Safeway and Albertson's tolerate a grocery strike by the UFCW in California a few years back? Because they told the UFCW that their costs were too high and they couldn't compete with Wal-Mart. The union got mad and went on strike. They later came back on the company's terms after losing millions of dollars. Of course, the companies closed quite a few stores and cost many UFCW members their jobs. How did that UFCW effort turn out?

The point is, Ken, that unions are being decertified in record numbers and this recent effort by the unions to do away with a secret ballot is a desperate cry for help. They know they can't win a fair secret ballot election. How does the secret ballot benefit the employer? It doesn't. The NLRB oversees this election process. Employees have more protection from the employer when they use the secret ballot. Card check is an easy way to bully employees into joining a union they would otherwise vote against in the secret ballot. The unions are desperate. They are obviously not interested in protecting their workers. And they haven't done such a good job at it. Look at the thousands of UFCW employees and the tens of thousands of UAW employees who are now jobless.

Mary is absolutely correct. All evidence supports her statements. FACT. LOGIC. REASON. EVIDENCE. COMMON SENSE. These are more than just words. They are your study guide for intelligent debate.

Nick in
Friday, May 25 at 06:09 AM

My argument still stands even though I find myself inadvertantly defending the unions again.

What "union costs" is Mary referring to? As you constantly point out, Nick, the union is supported by the dues of it's members, not from Wal-Mart or any other unionized company.

The "cost" to Wal-Mart would be paying a wage acceptable to collective bargainers. Scary thought, huh?

Ken V in Texas
Friday, May 25 at 07:26 AM

KenV,
Indirectly, unions are ALSO funded by consumers, who have to pay more for stuff at union stores. The costs get shifted to the consumers - why do you think myself and millions of others don't want to see unions take over Walmart?? It would mean higher prices for us.

someone else in
Friday, May 25 at 10:30 AM

"What "union costs" is Mary referring to?" and "My argument still stands".

Are you kidding me? Ken, you are either playing dumb (and I don't think you are dumb) or just incredulous to the facts. And in this case it's the facts that Nick very clearly laid out. Take a very hard look at the big 3 and the UAW and tell me that the high salaries and expensive benefits enjoyed by the UAW workers have not priced Ford, GM and Chrysler out of the car market?

For every union and every union member that demands higher wages and benefits it is the consumer who ultimatly pays that price. There is a fine line when the consumer will just say NO to price increases and look for alternatives. It's the union membership that will suffer in the end with the lost of jobs. The UAW has this written all over it.

Mary in
Friday, May 25 at 11:34 PM

What really happened-

In the 1960s , the UAW used its strategy of negotiating a contract with one major auto maker and applying it to others to secure a number of new benefits for auto workers, including fully paid hospitalization and sick leave benefits at General Motors and profit sharing in American Motors . The UAW also grew to include workers in other major industries such as the aerospace and agricultural-implement industries.

During this time, UAW members became one of the best paid groups of industrial workers in the country — many buying second homes in the country, boats, and earning enough to move to the suburbs and send their children to college. However, by the end of this period, changes in the global economy and competition from European and Japanese automobile makers had already started to significantly reduce the profits of the major auto makers and set the stage for the drastic changes in the 1970s.
http://en.wikipedia.org/wiki/United_Auto_Workers

Imports- Global Labor Arbitrage- Trade agreements shipping American high skill and high paying jobs overseas.
Remember when GM owned 25% of Toyota? Or when the other U.S. auto makers went into business with the Japanese?

Mary's version- Betray America's workforce for money and shareholder value, drop any `protection' of the American economy from imports, rake off the profit differentials from labor arbitrage, have billionaire executives scream about health care costs and then blame the unions for everything!

WalMart- Propaganda and image frauds from our `war room' rewriting history clowns. This is where your shareholder value is going these days.

SanDiegoView in
Saturday, May 26 at 12:28 AM

Nice try SDV, but your arguement fails to pass muster with the UAW. It seems that those "highly skilled" auto manufacturing jobs under UAW control are being lost not to overseas but right here in this country by non-UAW producers such as Toyota and Honda. And I'll say it again… price your self out of the market and you will soon be OUT of the market.

Mary in
Saturday, May 26 at 05:21 AM

I know it's gospel for neo-capitalists to blame the decline of the U.S. auto industry on unions and labor in general but the fact remains arrogant incompetent management led to it's downfall.

The incredible advances in automotive technology that have come about since U.S. automakers lost dominance is only one indication why the era of GM is over. The big three got fat and lazy and believed consumers would buy whatever they had for sale.

Granted, one of the penalties of gross mismanagement is that costs, including labor, become unbearable. The demise of the U.S. auto industry is merely market forces at work.

Ken V in Texas
Saturday, May 26 at 08:23 AM

I agree with San Diego View about what went down in Detroit. I remember not long ago when the Japanese were having fits over the Koreans and now the Chinese are ground zero with 35 cent per hour labor. Destroy any industry with cheap labor like that. Markets forces that became more and more international. The unions did not do that, the politicians opened up trade pressures did the NAFTA thing and let all the imports in. Did not protect our econonmy and capitulated to the international corporate arena and wasted our auto industry with cheap labor from Asia. Protectionism is not a dirty word. Now the foreign car and truck makers are coming here. Mary is making the same point she denies!

Doug in AZ
Saturday, May 26 at 01:01 PM

WHOA! Back the Train Up For a Second

First Nick says:

"I always laugh when reporters who have never done anything except write stories try and tell a very successful multi-billion dollar corporation how to conduct its business."

Later Nick says this about Ken V:

"...people like yourself, people lacking in logic, humility, reason or common sense."

Thank you for another good laugh...you never disappoint me! Tell us all about that "very successful multi-billion dollar corporation" you are running.

Lastly, regarding your prediction: " My prediction? Wal-Mart keeps Sam's and uses the cash flow to improve profitability, buy back stock, increase dividends and cut debt." You are humble and credible because...??

ScrewedbyWal-Mart in Anytown, America
Saturday, May 26 at 09:23 PM

SDV,

"In the 1960s , the UAW used its strategy of negotiating a contract with one major auto maker and applying it to others to secure a number of new benefits for auto workers, including fully paid hospitalization and sick leave benefits at General Motors and profit sharing in American Motors ."

And, just how are things going at American Motors now? The problem there, was that `negotiating a contract and applying it to ALL that auto manufacturers', it worked for the big 3, but, killed the small American Motors. Chrysler bought out American Motors and was finally bailed out by the government, later partnered with Daimler and is now in trouble again.

Ken V,

"I know it's gospel for neo-capitalists to blame the decline of the U.S. auto industry on unions and labor in general but the fact remains arrogant incompetent management led to it's downfall."

Funny, but the common denominator with ALL the U.S. car companies, was the UAW, yet, you claim that it was the managements at ALL the companies that were their downfall. What did all those managements have in common, that caused them ALL to be incompetent? So much so, that the Japanese came in and rolled over them ALL!! Not one single company had management competent enough, to see what was happening and compete, right?

Doug,

"The unions did not do that, the politicians opened up trade pressures did the NAFTA thing and let all the imports in."

I believe that auto imports started way before NAFTA, along with many other imports. The unions did not allow companies to adjust wages to compete with imports, therefore, companies had to develop technologies to increase production efficencies, which lead to reduced labor forces, which resulted in demands for higher wages and benefits by the unions!!

Bob in
Sunday, May 27 at 12:18 AM

That One is Easy...Care to Try Again, Bob?

Anyone reading this blog for any length of time, knows you are one of the biggest A-Hole detractors when it comes to unions. Your post yesterday was just the latest example.

Did you really expect your question to Ken V would stump people: "What did all those managements have in common, that caused them ALL to be incompetent?" In two words-- GREED and ARROGANCE.

You really shouldn't be asking where is American Motors today… the question is, "Where are the top leaders in companies like Enron, Tyco, World Com...and the list goes on!

How come you never talk about the multi-million dollar compensation packages these grossly over-paid top executives always seem to secure for themselves along with the "Golden Parachutes" they deploy when a company gets in trouble or is losing money. Screw all the workers they leave behind, be they union or non-union. Every man for himself---Right?

Once again, you claim to have read Sam Walton's Autobiography, but you obviously skipped the part where he said he would have welcomed the opportunity to take a union company and make it work for everyone.

Turn off your selective perception Bob and get your head out of your butt for once.

ScrewedbyWal-Mart in Anytown, America
Sunday, May 27 at 09:31 AM

Screwedby,

"Anyone reading this blog for any length of time, knows you are one of the biggest A-Hole detractors when it comes to unions."

Truth is, I have respect for many unions, the ones that nogotiate good contracts for both their members and the companies they work for. But, unions like the AFL-CIO, UAW, UFCW, SEIU, etc., are unions that push nogotiations beyond the limits, which in the end, hurt the companies and the workers as well!!

" "What did all those managements have in common, that caused them ALL to be incompetent?" In two words-- GREED and ARROGANCE."

So, GREED and ARROGANCE have been the basis of company managements since the 60's and 70's, right? Did you work for American Motors? I didn't work there, but as a truck driver for a Kenosha based company, I hauled into the plants everyday and I could tell you stories about how the union corrupted the members to the point, that they would threaten to walk off the job if they didn't get their way over almost anything!! Also, American Motors workers always held off on contracts until after Ford & GM settled their contracts and then AMC workers would ask for MORE and AMC would have to sign on or face a crippling STRIKE!!

"Where are the top leaders in companies like Enron, Tyco, World Com...and the list goes on!"

Yes, where are those guys? Perhaps in PRISON!! Where is Jimmy Hoffa, Teamsters President? They still haven't found him!! What about the Teamsters Pension Fund, was any GREED and ARROGANCE involved there?

"How come you never talk about the multi-million dollar compensation packages these grossly over-paid top executives always seem to secure for themselves along with the "Golden Parachutes" they deploy when a company gets in trouble or is losing money. Screw all the workers they leave behind, be they union or non-union. Every man for himself---Right?"

I do talk about CEO compensation packages, but, you notice that they are obtained without a union behind the person getting them, they get those packages based on their ability upon hiring, which any worker can do, if they build their skills to a point that people notice them as being good enough to run a multi-billion dollar company. And, whether you want to admit it or not, it is harder to RUN a company, that it is to clean up a spill on aisle 9!! Besides, they get paid based on what their bosses are willing to pay them!!

"Once again, you claim to have read Sam Walton's Autobiography, but you obviously skipped the part where he said he would have welcomed the opportunity to take a union company and make it work for everyone."

I think you need to read that part again, Sam dealt with unions and rejected them at every turn, he was just saying that if he was forced to nogotiate with a union, he wouldn't let them get the best of him!!

Bob in
Monday, May 28 at 12:54 AM

Like I said, Bob, You Suffer From Selective Perception!

What's with you anyway? Do you always have to SPIN things so they fit into your warped and cockeyed little universe?

I don't remember reading anything about Sam Walton worrying about being "forced" to negotiate with a union. To use your buddy Nick's favorite phrase these days--- what were the unions going to do, "hold a gun" to Sam's head?

Page 255, Chapter- "Wanting to Leave a Legacy," in Sam Walton's Made in America states:

"...I'd love to have the fun of trying to take a unionized company today and sell its people on the idea of having to be competitive globally--whether it was in autos, or steel, or electronics. I'd love a chance at that, the pleasure of seeing if they could be motivated into a team that would share in all the company's success--and still have a union. But if American management is going to say to their workers that we're all in this together, they're going to have to stop this foolishness of paying themselves $3 million and $4 million bonuses every year and riding around everywhere in limos and corporate jets like they're so much better than everybody else."

It doesn't get any clearer than that. But I had to add bold to certain words so that even YOU will understand, Bob!

ScrewedbyWal-Mart in Anytown, America
Monday, May 28 at 01:45 AM

Not one single company had management competent enough, to see what was happening and compete, right?

I'd say Lee Iacocca came as close as anyone.

Ken V in Texas
Monday, May 28 at 04:03 AM

Ken

Lee Iacocca is an overrated, arrogant, self-centered windbag. Where would Chrysler be today without taxpayer loans? OUT OF BUSINESS. Here is the Lee Iacoccs blueprint for success.

1. Get a taxpayer loan to bailout a bad company and keep excess capacity in the market.

2. Pretend to get tough with the UAW, while allowing for huge increases in wages and benefits and a crippling pension agreement.

3. Pay thousands of displaced workers full wages and benefits each year for.............who knows? Just pay them to do nothing.

4. Hire creative people who designed other great cars and develop the K-Car, the minivan, the LeBaron covertible, etc. and turn your losses into profits. Quickly take all the credit and stick it to the talent.

5. Appear in commercials for your product not as a marketing tool but to satisfy your own ego and convince naive Americans that you were the real brains behind the whole deal.

6. Bloat the company with ridiculous purchases (real estate, corporate jets, Lambourghini, etc.)

7. Turn into another highly paid, mediocre CEO and bully YOUR board of directors into letting you hang on to the post far longer than you deserved.

8. Retire. Make speeches, give interviews and write a book about how everything they're doing today is wrong and how they could use you to solve the world's problems.

9. Blame corporate greed and CEO incompetence (I'll agree with the incompetence part) but deny that UAW is a big factor in high costs and poor products.

10. Complain about currency manipulation, tariffs, trade agreements, etc. and blame them for Toyota's succcess vs. GM, Ford or Chrysler. Deny Deny Deny as Toyota opens a plant next door to GM with workers from the same county, same taxes, same utility and raw materials costs, etc. and proceeds to cut GM's throat. Deny that Toyota is better at quality, reputation, production efficiencies, managing compensation and marketing.

There you have it, Lee Iacocca's blueprint for success. You, too, can be worth $100 million and taking potshots at Japan while watching the car wars from the cheap seats.

Nick in
Monday, May 28 at 09:09 AM

I may be wrong, Nick, but it sounds to me you're a little envious of Lee's success.

...and turn your losses into profits.

That's what it's all about, isn't it?

Ken V in Texas
Monday, May 28 at 11:03 AM

I Couldn't Agree With You More, Ken!

I would even have agreed with Nick, if only he would have started his last rant with, "I [Nick] am an overrated, arrogant, self-centered windbag."

ScrewedbyWal-Mart in Anytown, America
Monday, May 28 at 12:20 PM

Screwedby,

"what were the unions going to do, "hold a gun" to Sam's head?"

In essense, isn't that exactly what unions do? They tell a company what they want and if the company doesn't want to pay it, they shut them down (strike) until they cry `uncle'!!

"But I had to add bold to certain words so that even YOU will understand, Bob!"

Sure, you choose the words YOU want to highlight so it fits YOUR point. How about these words, "and sell its people on the idea of having to be competitive globally", do you really think that union employees care about being globally competitive? Even non-union employees don't care about that!! Or, "if they could be motivated into a team that would share in all the company's success--and still have a union.", unionized employees care only about what goes in their pocket, not how successful the company is, proof of this, is that a company has to go into bankruptsy, before a union is willing to give concessions, just losing money is not enough for the union to alter a contract downwards. All Sam was saying, was that he would love the opportunity to try to get a union and a company to work together, but, he knew it could never happen, that is why he never entered into that type of arrangement. He could have easily convinced the employees to vote a union in, if he REALLY wanted to!! Ask yourself, "Why didn't he DO it, instead of just talking about it"? Look at Ford and GM, they entered into an arrangement with the union, to put a union representative on the board of directors, but, both companies still ended up in financial trouble!!

Bob in
Tuesday, May 29 at 01:30 AM

It's Late and I Don't Have Time to Mince Words

I don't have the time or the energy anymore tonight/this morning to debate with a lamo, Bob. Your viewpoints concerning the "evils" of unions is well documented.

Just explain this lame brain:

You say unions "hold a gun" to a company's head. "They tell a company what they want and if the company doesn't want to pay it, they shut them down (strike) until they cry `uncle'!!"

Why would you not agree then that Wal-Mart "holds a gun" to the head of its suppliers anytime they deal with Wal-Mart? Again I refer you to the now infamous case of the former Rubbermaid Company as but one example. Rubbermaid asked for a reasonable price increase from Wal-Mart. Many other customers of Rubbermaid already agreed to take this price increase… NOT Wal-Mart. Then to boot, Wal-Mart took shelf space away from Rubbermaid to really show them who was boss.

Wal-Mart tells its suppliers what they need to produce something for. If a supplier says they can't do it...guess what...Wal-Mart looks for another supplier who will whore themselves to get the business. Since neither you nor I were there when Michael Dell had his conversations with Wal-Mart, it's only speculation as to what Wal-Mart may have told him. But I would have loved to be a fly on the wall to hear that conversation. Wal-Mart loves to play one supplier against another and then sit back to watch the catfight. They use the same tactic when they want to come into a new community...they pit one town or city against another. Now how is this not "holding a gun" to someone's head.

I know...I know...I can hear your lame answer already Bob… "free will" "free choice" blah, blah, blah.

ScrewedbyWal-Mart in Anytown, America
Tuesday, May 29 at 02:39 AM

Actually, my response has nothing to do with "free will" - it has to do with who benefits when walmart pits "one supplier against another" - the consumer.
I asked this on another board, and I ask it again: why does the benefit to the consumer get lost in all of this??? There's certainly more consumers than WM workers in this country - why does your side consistently ignore the benefit to them??? Doesn't that count for something??

Al in
Tuesday, May 29 at 11:46 AM

Screwedby Wal-Mart,

Or could it be that Wal-Mart was already selling HP and Gateway (e-machines) computers, and maybe, just maybe, Dell just wanted to get in the game, too?

Big W

Big W in
Tuesday, May 29 at 02:57 PM

Screwedby,

"Why would you not agree then that Wal-Mart "holds a gun" to the head of its suppliers anytime they deal with Wal-Mart?"

Here is the `big' difference between the `union holding a gun' and Wal-Mart `holding a gun', ready? A supplier can always say "No Thanks, I'll take my business elsewhere", but Wal-Mart cannot say to a union, "We don't you representing our employees anymore"!!

"Again I refer you to the now infamous case of the former Rubbermaid Company as but one example. Rubbermaid asked for a reasonable price increase from Wal-Mart. Many other customers of Rubbermaid already agreed to take this price increase… NOT Wal-Mart."

You keep rehashing that Rubbermaid story, trouble is, as you say, other customers agreed to the increase...NOT Wal-Mart, then Rubbermaid, should have said "Bye Bye" to Wal-Mart and sell only to those other customers. Fact is: Rubbermaid products are NOW in Wal-Mart, but are made by Newell, Newell did what Rubbermaid couldn't, I think that's more of an indication of Rubbermaid's poor management!!

"Wal-Mart loves to play one supplier against another and then sit back to watch the catfight."

Isn't that called COMPETITION? Have you ever went to buy a car and went to one dealer, got a price quote and then went to another dealer and asked him to beat the other dealers price? I think that's known as being SMART!!

"They use the same tactic when they want to come into a new community...they pit one town or city against another. Now how is this not "holding a gun" to someone's head."

At any point, either community could say "NO", that's how!! Besides, listen to SDV, according to him, getting a Wal-Mart is a communities `worse nightmare' and will cost the taxpayers a fortune. What you are saying, is that the victim (town or city) of Wal-Mart, is begging to be fleeced (having subsidies taken from them), that's like walking down the street and fighting with someone as to who is going to be lucky enough to get robbed by the mugger first!! You can't have it both ways, either Wal-Mart is `forcing' it's way into communities, or the communities are begging for the store to come in and willing to fight and PAY to get it!!

Bob in
Tuesday, May 29 at 10:21 PM

Bob, was this your best attempt to evade the subject of WalMart's sucking down billions of dollars in subsidies and `dumping' their `associates' onto the unsuspecting taxpayers for health care and all the other corporate welfare.

Communities are saying no to WalMart from Maine to San Diego as they find out the cost to them of having a poverty creating WalMart corporate welfare model subsidize its way upon unsuspecting citizens and communities.

You like WalMart are in the propaganda and evasion business. You don't want people to know about WalMart corporate theft from taxpayers and the huge subsidies concealed from the taxpayer suckers. Otherwise why don't you just tell everyone what the state by state taxpayer funding is for the WalMart impoverishment model.

WalMart- Billions in concealed subsidies from the taxpayer suckers. Lee Scott and the Waltons thank you for contributing to your own poverty.

SanDiegoView in
Wednesday, May 30 at 03:57 AM

SDV,

"Bob, was this your best attempt to evade the subject of WalMart's sucking down billions of dollars in subsidies and `dumping' their `associates' onto the unsuspecting taxpayers for health care and all the other corporate welfare."

How can someone `Dump' something it doesn't have? If I don't have any trash, how can I `dump' it in your yard? Wal-Mart doesn't have any healthcare responsibility, get it yet!!!

"Communities are saying no to WalMart from Maine to San Diego as they find out the cost to them of having a poverty creating WalMart corporate welfare model subsidize its way upon unsuspecting citizens and communities."

And, as Ken V. said, the town down the road is fighting to get the store and is relieved when the other town gives it up. And, those unsuspecting citizens shop at the store, save money and keep the store there.

"You like WalMart are in the propaganda and evasion business. You don't want people to know about WalMart corporate theft from taxpayers and the huge subsidies concealed from the taxpayer suckers."

Funny that you should think that so many citizens and communities are STUPID, while YOU are so SMART!!

"Otherwise why don't you just tell everyone what the state by state taxpayer funding is for the WalMart impoverishment model."

I can't tell people what I don't believe to be true, that's why!! You are the one who buys into this "Every Wal-Mart employee is sleeping in their car in the parking lot", B.S., not me!!

Bob in
Wednesday, May 30 at 11:33 AM

"You are the one who buys into this "Every Wal-Mart employee is sleeping in their car in the parking lot"…
Bob in
Wednesday, May 30 at 11:33 AM

Every Wal-Mart employee…

I never wrote that. However there are some. Typical lies and distortions from blogger frauds like you Bob. Fits with the basic pattern of concealment and misrepresentation from the `war room' WalMart worship choir.

Even though you and WalMart lie about the details, why is it that they provide any kind of health care coverage at all under your and Nick's Nigerian business philosophy?

WalMart- `living wage'? `family wage'? `health care'? We don't understand. And we don't want to either. We rather `dump' our `associates' onto the states for welfare because we are `love of money' psychopaths. Let the taxpayers pick-up the bill. Sure it is embarrassing, but we have paid blogger frauds like Bob and Nick to lie for us.

SanDiegoView in
Wednesday, May 30 at 08:37 PM

SDV,

"Every Wal-Mart employee…

I never wrote that. However there are some."

Okay, how many are SOME? I guess if there were 2 out of 1.5 million, I would have to concede to your assessment, right? But, then again, that's how SPIN works, now doesn't it? You may not have said everyone, but, you implied that "All" Wal-Mart employees were being paid `poverty wages' and not enough to pay their bills and therefore must not have a place to live and you mentioned many times that Wal-Mart employees were sleeping in their cars in the parking lot!! I could make the statement that Wal-Mart `associates' become millionaires, working for Wal-Mart and I would be `correct', as some of Wal-Mart's early `associates' did become millionaires working at Wal-Mart, not all, but some!! Spinning that fact, just the way you did the `sleeping in cars' fact, would be very misleading and somewhat deceptive!!

And, you continue to spout that worn out `living wage' drivel and that `totally ignorant' DUMPING crap, totally ignoring the reality of what is happening!!

Bob in
Thursday, May 31 at 12:45 AM

"Every Wal-Mart employee…

I never wrote that. However there are some."

Then Bob writes-
"Okay, how many are SOME? " Bob, at least you are admitting to this lie you told. Try reading rather than avoiding/evading all the reports on poverty `associated'
(get it!) with WalMart and the police blotters for this exact problem of homeless `low wage' leader impoverished `associates'. Start with the Atlanta area, OK,OK, I know you won't ever give consideration to newspaper reports or police reports or university studies or any of dozens of other sources about WalMart creating poverty so why ask you to read anything.

Next you can continue another lie about WalMart not `dumping' their `associates' onto the states for health care.

Even though you and WalMart lie about the details, why is it that they provide any kind of health care coverage at all under your and Nick's Nigerian business philosophy? The managers at WalMart get it. Bentonville slobs get it.

WalMart- `living wage'? `family wage'? `health care'? We don't understand. And we don't want to either. We rather `dump' our `associates' onto the states for welfare because we are `love of money' psychopaths. Let the taxpayers pick-up the bill. Sure it is embarrassing, but we have paid blogger frauds like Bob and Nick to lie for us.

SanDiegoView in
Thursday, May 31 at 07:10 PM

SDV,

""Okay, how many are SOME? " Bob, at least you are admitting to this lie you told."

Since when, is asking a question, admitting to a lie? And, what LIE are you talking about, I don't lie? You go more off the deep end, with every post you write!!

Bob in
Friday, June 01 at 03:30 AM

Let's recap shall we-

"You are the one who buys into this "Every Wal-Mart employee is sleeping in their car in the parking lot"…
Bob in
Wednesday, May 30 at 11:33 AM

Every Wal-Mart employee…

I never wrote that. However there are some. Typical lies and distortions from blogger frauds like you Bob.

""Okay, how many are SOME? " Bob, at least you are admitting to this lie you told."

Since when, is asking a question, admitting to a lie? And, what LIE are you talking about, I don't lie?
Bob in
Friday, June 01 at 03:30 AM

The dialogue speaks for itself. Apparently as a blogger fraud you cannot even tell the difference between your lies, distortions and propaganda stink parade any more.

Wal Mart- Billions in subsidies as corporate welfare and `dumping' associates onto the states for more welfare embarrassment because we pay impoverishment wages.
Bob thinks it is `free enterprise'.

"The Shepherd drives the wolf from the sheep's throat, for which the sheep thanks the shepherd as a liberator, while the wolf denounces him for the same act as a destroyer of liberty." Abraham Lincoln

San DiegoView in
Friday, June 01 at 03:46 AM

 

Other tricks of Wal-Mart Stores, Inc is to hire as many part-time associates and make it hard for them to become full-time associates.  Also they do their best to allow people to become 100% vested in profit sharing along with very few retiring. They are extremely dangerous, since other corporations follow the example in stagnant wages{The cost of living is not important to the Board of Directors and/or owner(s)} and most do not givr benefits and bonuses.  The worst is the fast food sector where they rarely give payraises, their secret is to hire part-timers and mostly young people they will rarely hire people over 40 years old. There are many others. 

The Unemployment Department of any in the United States are pro-business and rarely go against them and are not that good in helping people find jobs.

Most companies do not follow the mission and vision statements and train their employess poorly and most are in the service industries.