If I asked someone to give me an example of an anti-union company, what example do you think they would give? Probably Walmart, right? Yeah me too. They have never held back on their feelings of Unions and there destruction on Capitalism, and America. But I want you to look past a few things.
Yes Sam Walton may have been anti-union. In his 1992 autobiography he wrote, “I have always felt strongly that we don’t need unions at Walmart… . The partnership we have at Walmart — which includes profit sharing, incentive bonuses, discount stock purchase plans, and a genuine effort to involve the associates in the business so we can pull together — works better for both sides than any situation I know of involving unions.” But it’s not all bad. Did you know that the average wage of a Walmart employee is $11.75/hr averaging out to an annual salary of $20,774. Of course the national average hourly wage is reported to be $12.04/hr. And maybe Michael Duke’s (Walmart CEO) salary in 2009 was just under $20,000,000. But at least it’s higher than the minimum wage that the POTUS is proposing. Sure Mr Duke makes more in one hour than a lot of his employees make in a year. But at least the Walmart employees qualify for some sort of food assistance program. And if they do not know how to complete the proper forms, that’s okay too. Some lovely employee in the Human Resources department is trained to help them file.
But it’s not all bad news. At least the Walton family donates a huge chunk of their vast fortune. Take into consideration this. Warren Buffett whose net worth is estimated at $47 Billion donates 78% of his wealth to charity. Bill Gates whose net worth is estimated at $53 billion donates 48% of his wealth to charity. The Walton family whose net worth is estimated at $83.6 Billion donates a WHOPPING,,,,,,,,,,,,,,2% of their wealth to charity.
But are these really the big issues? Or is there something even bigger and more devastating? To the middle class? To prosperity? Maybe Capitalism? Or something even bigger! I would like you to read an excerpt from a great book written by Charles Fishman. It is entitled “The Walmart effect
What does the squeeze look like at Wal-Mart? It is usually thoroughly rational, sometimes devastatingly so.
John Mariotti is a veteran of the consumer-products world–he spent nine years as president of Huffy Bicycle Co., a division of Huffy Corp., and is now chairman of World Kitchen, the company that sells Oxo, Revere, Corning, and Ekco brand housewares.
He could not be clearer on his opinion about Wal-Mart: It’s a great company, and a great company to do business with. “Wal-Mart has done more good for America by several thousand orders of magnitude than they’ve done bad,” Mariotti says. “They have raised the bar, and raised the bar for everybody.”
Mariotti describes one episode from Huffy’s relationship with Wal-Mart. It’s a tale he tells to illustrate an admiring point he makes about the retailer. “They demand you do what you say you are going to do.” But it’s also a classic example of the damned-if-you-do, damned-if-you-don’t Wal-Mart squeeze. When Mariotti was at Huffy throughout the 1980s, the company sold a range of bikes to Wal-Mart, 20 or so models, in a spread of prices and profitability. It was a leading manufacturer of bikes in the United States, in places like Ponca City, Oklahoma; Celina, Ohio; and Farmington, Missouri.
One year, Huffy had committed to supply Wal-Mart with an entry-level, thin-margin bike–as many as Wal-Mart needed. Sales of the low-end bike took off. “I woke up May 1”–the heart of the bike production cycle for the summer–“and I needed 900,000 bikes,” he says. “My factories could only run 450,000.” As it happened, that same year, Huffy’s fancier, more-profitable bikes were doing well, too, at Wal-Mart and other places. Huffy found itself in a bind.
With other retailers, perhaps, Mariotti might have sat down, renegotiated, tried to talk his way out of the corner. Not with Wal-Mart. “I made the deal up front with them,” he says. “I knew how high was up. I was duty-bound to supply my customer.” So he did something extraordinary. To free up production in order to make Wal-Mart’s cheap bikes, he gave the designs for four of his higher-end, higher-margin products to rival manufacturers. “I conceded business to my competitors, because I just ran out of capacity,” he says. Huffy didn’t just relinquish profits to keep Wal-Mart happy–it handed those profits to its competition. “Wal-Mart didn’t tell me what to do,” Mariotti says. “They didn’t have to.” The retailer, he adds, “is tough as nails. But they give you a chance to compete. If you can’t compete, that’s your problem.”
In the years since Mariotti left Huffy, the bike maker’s relationship with Wal-Mart has been vital (though Huffy Corp. has lost money in three out of the last five years). It is the number-three seller of bikes in the United States. And Wal-Mart is the number-one retailer of bikes. But here’s one last statistic about bicycles: Roughly 98% are now imported from places such as China, Mexico, and Taiwan. Huffy made its last bike in the United States in 1999.
Here is one more you should read.
As Mariotti says, Wal-Mart is tough as nails. But not every supplier agrees that the toughness is always accompanied by fairness. The Lovable Company was founded in 1926 by the grandfather of Frank Garson II, who was Lovable’s last president. It did business with Wal-Mart, Garson says, from the earliest days of founder Sam Walton’s first store in Bentonville, Arkansas. Lovable made bras and lingerie, supplying retailers that also included Sears and Victoria’s Secret. At one point, it was the sixth-largest maker of intimate apparel in the United States, with 700 employees in this country and another 2,000 at eight factories in Central America.
Eventually Wal-Mart became Lovable’s biggest customer. “Wal-Mart has a big pencil,” says Garson. “They have such awesome purchasing power that they write their own ticket. If they don’t like your prices, they’ll go vertical and do it themselves–or they’ll find someone that will meet their terms.”
In the summer of 1995, Garson asserts, Wal-Mart did just that. “They had awarded us a contract, and in their wisdom, they changed the terms so dramatically that they really reneged.” Garson, still worried about litigation, won’t provide details. “But when you lose a customer that size, they are irreplaceable.”
Lovable was already feeling intense cost pressure. Less than three years after Wal-Mart pulled its business, in its 72nd year, Lovable closed. “They leave a lot to be desired in the way they treat people,” says Garson. “Their actions to pulverize people are unnecessary. Wal-Mart chewed us up and spit us out.”
So as we spend the rest of the year and beyond discussing Unions, I want you to ask yourself one question. Is Walmart really anti-union? Or would it be safe to say that they are Anti-American. After all, 80% of Walmart’s suppliers are in China which leads to 12% of China’s exports going to Walmart.
And the most ironic part is that Sam Walton built this empire and left it to the Walton family, all within the shores of The UNITED States of America.