Favorite quote of the day from Wal-Mart's CFO Tom Schoewe in response to Mark Haines, January 13, 2005, on CNBC's "Squawk Box":
"We're doing well in those three Super-Centers (in California), but shouldn't there be 30 or 50 Super-Centers there?"..."It's the opportunity that's lost for us, for our shareholders, and importantly, our consumers." Tom Schoewe, CFO for Wal-Mart.
I must tell you how much I love Mark Haines. The program, and I'll admit upfront that I didn't see this morning's show in its entirety, centered on Wal-Mart's recent PR offensive, supposedly a blitz aimed at answering its many critics. (Hi, guys! Nice to know I'm not the lone voice out here in Can't Stand Wal-Mart Land.)
The ad I saw reads:
"Wal-Mart Is Working For All Americans. Some of our critics are working only for themselves."
Ahem. Besides having no clue as to what that ad actually means, what does it say? Which "All Americans" would those be? Certainly Wal-Mart can't mean, "all," since you exclude "some" who work for themselves. Wouldn't that include some entrepreneurs? And does this mean that all entrepreneurs are your critics? Surely the "all" is a bit overstated at best....
But let's examine how Wal-Mart describes its work for All Americans...
Let's take their great claims of philanthropic generosity, shall we? I looked up Wal-Marts' net income as of 12/31/04. According to the Wall Street Journal(WSJ), Reuter's reported Wal-Mart's 2004 net annual income at $9,054 million.
Should you misunderstand, that's nine billion, fifty-four million dollars AFTER TAXES.
All their charitable contributions had been deducted from that figure, folks.
Shall I put this in perspective for you?
They offer a website to discuss its larger role in the community. Please. I visited this website. All I can say is caveat emptor: www.walmartfacts.com.
I'll quote from Wal*Mart's own "facts" sheet posted on "Wal-Mart Facts -Do You Know? - Special Programs":
Let's see now:
VFW: $1,000,000.00 in contributions
Tsunami relief: $2,000,000.00 (That's 2005, of course, though they didn't mention that.)
World War 11 Memorial: $6,000,000.00 (They quickly and proudly add that "associates and customers" (that's you) "raised an additional $8.5 million." Please note that associates and customers (how exactly did they measure that?) outspent the much richer company by $2.5 million dollars.
(I'm not a customer nor am I, thank God, an associate, but I was a Charter Member of that particular charity. But since I am a Wal-Mart critic, and proud of it, and I work "for myself," I guess my contributions don't count much. And neither do the contributions of the millions of other Americans who built that Memorial with far less resources at their disposal.)
You get the gist. Now most of these charitable contributions are tax deductible. So they don't come out of that net income figure of over $9 billion. And since no dates are given, we don't know the time period which those contributions cover, so we'll just have to give them the best case scenario and take them all out of the 2004 year.
Let's take the $2 million contribution to the Tsunami relief first...it sounds so good. But how much did it really cost Wal-Mart?
If you do the math, it comes to exactly .0002209% of that $9 billion annual net income recorded by Reuters. And don't forget, they'll probably get to write that off this year's taxes.
OK, let's do the math on the $6 million to build the WWII Memorial and just assume (yeah, right) that was a lump sum given in 2004. Well, based on the annual net income of just over $9 billion, that contribution works out to .0006627% of last year's Net Annual Income.
OK...now that gives you some idea of how much their $1 million contribution to the VFW (also a write-off) is worth.
Some of you associates and Wal-Mart customers regularly give 10% of your incomes to some church or other charities. How does your company's giving match yours? And how does your salary match the net earnings of the company?
I love Wal-Mart's website's "facts" on "America's Armed Forces"...: "We are loyal supporters of our men and women in the armed forces. More often than not, they are our friends, neighbors, and frequently our fellow associates." (With over 1.2 million associates nationwide, I suppose that is true, especially when you add in "friends, neighbors"....)
Get this from the same graph: "In 2004, more than 38,300 of our associates told us they had served in the military. And currently 3,200 associates who are currently on military leave." (That grammatical error is theirs, not mine.) "When associates are called to active duty, we continue their benefits, provide assistance to their families (could you be more specific in that, please?) and make up any difference between military pay and regular Wal-Mart wages." (Gee, I wonder how many times they have to do that?)
To be fair, Wal-Mart's Chief Executive Lee Scott says "the company's average pay is nearly twice the minimum wage, 74% of its hourly workers are full time, and it offers health and life insurance, company stock and a 401 (K) retirement plan."..."We have good jobs." (Taken from a wire article, "Wal-Mart Blasts Critics in Nationwide Ad Offensive," from Little Rock, Ark., published in the WSJ, January 13, 2005.)
Excuse me Mr. Scott, but I can average any company's salaries and come up with an "average wage" which exceeds the minimum. I believe I learned that skill in grade school.
Don't you love this next quote from Scott? "I liken it (the widespread criticism) to being nibbled to death by guppies."
Guppies we may be, Mr. Scott, but we're still killing you.
When stating that "not all...questions are frivolous," when Wal-Mart tries to open a store in a new community, Scott is careful not to answer any of those questions.
Let us go back to their website information: All the first paragraph under "America's Armed Forces" really says is that 38,300 associates served in some branch of the United States Armed Forces at some time; they are not necessarily currently serving in this war. They could have served in any branch at any time. And I say, "Good for you, Veterans!" But how does that say anything special about Wal-Mart?
But considering so many associates served and are serving in the military, wouldn't you think Wal-Mart's contribution to the VFW and to our military efforts and/or troop support would surpass one-half of the amount given to the Tsunami relief?
And please note there are no dates on these figures. Obviously, the World War II Memorial is built, and you can go to visit it in Washington, D. C. If you look, you can see the brick I bought to commemorate my father's service in the Army Air Corps in that war. So when exactly was this $6 million contribution given, Mr. Schoewe? You're the CFO; you're supposed to understand figures and how they are reported.
If I weren't being so charitable, Mr. Schoewe, I would say that these "facts" in your fact sheets are misleading to a degree rarely found in honest, upstanding companies. But, of course, I would never suggest that your people or you were misusing figures to mislead the public, not to mention your associates. I'm certain that these discrepancies are mere...what?
Well, I must get back to "Squawk Box," before I lose my train of thought:
Mark Haines reminded Tom Schoewe that the reason for the PR blitz was to answer critics and get rid of some misinformation they were spreading about Wal-Mart and Sam's Clubs and that this was a departure from Wal-Mart's usual stance.
Schoewe's response: "When decision makers are making decisions on bad information, then we get frustrated." (Read: "When the people who are going to let us in or not are being influenced to our detriment, we've got to do something!")
"You're here," said Haines, "to set the record straight."
Schoewe pointed to the problems with California protesters, without going into the reasons behind the protests of course, which he said were the best examples of what he was trying to say. The existing three Super Centers, which were built in California in spite of protests, were doing extremely well.
Haines basically asked Schoewe if these stores were doing so well, then why all the hoopla?
Schoewe replied, "We're doing well in those three Super Centers, but our customers think we ought to have a lot more."
Haines: "But that doesn't mean that the reasons for the opposition were invalid."
Haines then reminded Schoewe that the CFO had not addressed the problems of California's local protesters "not wanting the traffic, the dislocation of local businesses, etc. You're doing well, but maybe the people who protested are not..."
Schoewe: "We're doing well in those three Super Centers, but shouldn't there be 30 or 50 Super Centers there? It's the opportunity that's lost for us, for our shareholders, and importantly, for our consumers in those local markets."
If that's not greed, folks, I don't know what is.
Then Haine's co-anchor, whose name escapes me (my apologies), pointed out that Wal-Mart employed some 1.2 million associates in the nation. So he asked if Wal-Mart's PR blitz exhibited concern for their employees? Which was more important: their associates or their customers?
Then, I swear I'm not making this up, there was a background video of hundreds of cheering Wal-Mart associates in a huge venue, while in a Voice Over Schoewe says: "If you've listened to the Wal-Mart Cheer, then you know that at the end of every cheer we ask: 'Who's Number One?' The answer is the customer. The customer is always number one." (No coaching there...)
The co-anchor asks basically then where does Wal-Mart rank the associate?
(I'm paraphrasing) Schoewe then replies that in order to make the customer number one, they have to take very good care of their associates. "So it's really not number one and number two, it's more like one and one-A."
OK...we've got a PR blitz aimed at critics who are supposedly feeding important decision-makers with bad information --please notice it is not wrong or incorrect; it is just "bad," presumably for Wal-Mart. This is so frustrating to Wal-Mart because it's keeping them from ruining California's beauty and small business communities with huge, ugly, gray cement monstrosities by affecting decisions about potential store venues.
This is not a campaign to counter wrong information; it is a campaign to confuse the issue, which is: Wal-Mart wants to build as many stores as it wants to build where it wants to build them, and the local communities should shut up and just let them come in, until they want to leave that store for greener pastures.
You think they don't do that?
Come to Broken Arrow, OK. I moved here in 1991, and it was a small, pretty, little burg with, thankfully, one Wal-Mart next to 71st aka Kenosha and County Line (that's the line separating Tulsa County from Wagoner County for you outlanders). That store is now abandoned, and it has been for several years now...nearly a block of ugly concrete and an even uglier abandoned store front. I haven't been by there lately; my hope is that someone is occupying that space and will get some use from it.
So where is Wal-Mart in Broken Arrow, one of the fastest growing cities in the United States? Well, they opened their first Super-Center on the SW corner of 71st and Aspen, which used to be one of the prettiest pieces of real estate in the city. Not now. It sports gobs of traffic and a gigantic parking lot with a great ugly gray building now. That entire area is now zoned "commercial," so only fast food stores and gas stations occupy that side of the road for about one half mile south.
Did they stop there? No!
Broken Arrow, once known for its high-yielding river bottom land and grazing land, has now turned into a development haven. And we now have a new turnpike extension running right through it. So where is the other Super Center? Next to the off ramp for 161st aka Elm Street, just south of the turnpike. That's about six miles south and one mile east of their other store, and all for li'l ole Broken Arrow.
Opps, almost forgot their "Neighborhood Market" on 91st & Elm.... Gee, can you say "overkill?"
Local businesses are going away by the score. Grocery stores who try to compete are getting worse by the second in customer service and in inventory available. The others have already gone.
Where do I shop? I think I told you, but I'll tell you again. I drive into Tulsa to a local butcher (Hanover's) to get my meat. (There used to be a local butcher in Broken Arrow, but not anymore.) Across from him is a Wild Oats Store, where I buy the rest of my groceries. Anything else I can't get, I either get at the Broken Arrow's Ace Hardware or my husband goes to Warehouse Market.
I won't buy ANYTHING at Wal-Mart. Why not? I don't like their quality, I should say lack of it; I don't like the way they treat their vendors; I don't like the way they deceive their "associates;" and I'm not too fond of brainwashing. But that's just my opinion and my view.
A friend of mine, who knows a lot more than I can divulge, says that the problem with Wal-Mart's upper echelon is: "They honestly don't know they are bad people."--Anonymous.
Lest anyone think I'm taking aim at Wal-Mart associates, I'm not. The ones I know or have met are usually nice, honest, and very hard-working people who believe in what they are doing and believe in their company.
I'm taking aim at those cognoscenti at the top of the Wal-Mart management tier...you know who you are, and if you don't, I suggest you take a long hard look at your company.
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