Disparate groups band together to attack Wal-Mart's business model

ed by Wal-Mart's longtime opponents in organized labor, a new coalition of about 50 groups – including environmentalists, community organizations, state lawmakers and academics – is planning the first coordinated assault intended to press the company to change the way it does business.

In the next few months, say those critics, they will speak with one voice in print advertising, videos and books attacking the company.

They plan to put forward an association of disenchanted Wal-Mart employees, current and former, to complain about what they call poverty-level wages and stingy benefits.

The critics have already begun lobbying in 26 states for legislation intended to embarrass Wal-Mart by disclosing how many thousands of its employees do not receive company health insurance and turn to taxpayer-financed Medicaid.

"We recognize that we are much more likely to win the battle against a giant like Wal-Mart if we act on multiple fronts," said Carl Pope, president of the Sierra Club, which has joined the coalition.

"You don't want to challenge Wal-Mart just on health care or just on the environment or just on sex discrimination. You want to pressure them on all three," he said. "This is an assault on a business model. We're not trying to shut Wal-Mart down. We're trying to change their business model."

Wal-Mart, the world's largest retailer, is in turn mounting a huge counteroffensive.

Last week, it took out an advertisement across two pages in The New York Review of Books in which it defended its business practices and accused its union detractors of being selfish.

It is spending millions of dollars on television advertisements in which blacks, Hispanics and women say that Wal-Mart is an excellent place to work.

It has invited 100 journalists to its Arkansas headquarters to hear its case Tuesday, the 13th anniversary of the death of its founder, Sam Walton.

"When critics pervert the facts to serve their financial and potential interests, it's our duty to speak up," Lee Scott, the company's chief executive, wrote in the New York Review of Books advertisement. "Chief among these myths is that Wal-Mart's wages and benefits have some kind of negative impact on wages across the board. That's just plain wrong."

Scott cited studies estimating that Wal-Mart saves American consumers $100 billion a year and saves the average family $600 a year, giving "them a raise every time they shop with us."

Saying that Wal-Mart's wages average around $10 an hour, nearly twice the federal minimum wage, he added that Wal-Mart offers "good jobs at fair wages and benefits with unparalleled opportunities for growth."

Wal-Mart has become a target because of its extraordinary size and power.

Wal-Mart has 1.2 million workers in the United States, more than the populations of Vermont and Wyoming combined. Its 3,600 stores sell more than one-quarter of the shampoo, disposable diapers and toothpaste bought nationwide. If Wal-Mart were a country, it would be China's eighth largest trading partner.

The new offensive by Wal-Mart's detractors is far bigger than earlier efforts. Previously, the company's main antagonist was the United Food and Commercial Workers Union, which sought, without much success, to unionize Wal-Mart workers.

That union, along with the AFL-CIO and the Service Employees International Union, has formed a new coalition that includes student groups, anti-sprawl groups and anti-sweatshop groups.

Showing the breadth of the new coalition, senior officials from Common Cause and the National Partnership for Women and Families have agreed to serve on the board of a new group that will coordinate the various efforts.

The executive director of that coordinating group is Andy Grossman, who was executive director for the Democratic Senatorial Campaign Committee. He is among many political operatives tapped for the anti-Wal-Mart effort.

Paul Blank, the Wal-Mart campaign director for the food workers, was national political director for Howard Dean's presidential campaign.

"We're focusing on Wal-Mart because of the huge impact it has on each of the different parts of American life it touches," said Grossman, whose coordinating group is called the Center for Community and Corporate Ethics. "They do provide goods at the lowest price, but that sometimes comes at a high cost to society. We don't want Wal-Mart to have jobs that don't provide health insurance or a living wage. We don't want to hurt the company. We want Wal-Mart to become better."

His new center is ambitious, planning a staff of 40 and a budget of several million dollars in its first year, helped by $1 million in seed money from the Service Employees and grants as large as $250,000 from liberal foundations.

As part of this new wave of activity, unions are working closely with the attorneys general of several states to determine whether Wal-Mart is violating laws barring child labor, off-the-clock work and false advertising.

The United Food and Commercial Workers said it would announce this month a new Web site called the Wal-Mart Action Network, which would seek to enlist Wal-Mart critics nationwide in the pressure campaign.

Robert Greenwald, director of the film "Outfoxed," a broadside against Fox News, is making a movie critical of Wal-Mart, while the New Press, a New York publisher, is planning a book of essays this fall by a dozen academics who will dissect, and often denounce, Wal-Mart's business model.

Wal-Mart seems to be matching its critics punch for punch. On Friday, it ran for the first time Asian-language advertisements on Chinese, Vietnamese and Filipino television stations to help burnish its image.

In January, it ran full-page advertisements in 100 newspapers accusing its critics of twisting Wal-Mart's image. The company also has set up a Web site, It even hired consultants from McKinsey & Co. to interview detractors to learn more about their complaints.

By Steven Greenhouse NEW YORK TIMES NEWS SERVICE April 3, 2005

No comments: