Wal-Mart, which has cultivated an image for brutal cost-cutting at the expense of employees and suppliers, is trying to reshape itself as a kinder, gentler company, but its legion of critics is not buying it.
Over the past week, Wal-Mart has launched a new environmental initiative — aimed at cutting greenhouse-gas emissions and other pollution — and announced plans to offer new health insurance for United States employees.
The world’s largest retailer and the biggest global company in terms of 2004 revenues also said it wants to raise the percentage of minorities and women in managerial positions.
And Wal-Mart stunned many by suggesting that the US Congress raise the minimum wage, currently stuck at $5,15 (R34,50) an hour — a move seemingly contrary to the company’s efforts to constantly cut costs and prices.
But the image-building effort stumbled quickly after the leak to The New York Times of an internal memo from a top executive saying the firm should redesign benefits to ”attract a healthier, more productive workforce”, suggesting it is discouraging the hiring of people who are obese or have medical problems.
The memo acknowledged that 46% of the children of Wal-Mart’s employees in the US are uninsured or on Medicaid, the government health-insurance programme for the poor.
Views are mixed on whether there is a change at Wal-Mart, which is the world’s largest private employer, with 1,3-million people on the payroll.
Edward Weller, an analyst at ThinkEquity Partners, said he sees ”major changes in the company’s attitude”.
”This company has been very defensive, and now they are shifting from a reactive position to a proactive one. They say that they can be good at business and at the same time be a good citizen,” Weller said.
He added: ”There will always be critics, because Wal-Mart is a very big target.”
But Paul Blank, executive director of WakeUpWalmart.com, an activist group, said the memo exposes the ”farce” of the Wal-Mart campaign.
”Wal-Mart is not a company trying to change,” Blank said. ”Wal-Mart’s announcements are nothing more than a publicity stunt by exposing the truth behind Wal-Mart’s culture of greed and moral corruption.”
In a conference call with reporters before the company’s annual meeting with analysts, Wal-Mart chief executive Lee Scott said the new corporate responsibility effort will not interfere with its profitability or its commitment to keep prices low.
”Doing the right thing doesn’t have to cost more,” he said. ”If I had to make a statement that Wal-Mart is going to stray from its [low-price] policy, we wouldn’t be doing this.”
While Scott said that many of the plans had been under development for some time, the havoc wrought by the recent hurricanes added a greater sense of urgency about the environment.
”It really came about because of Katrina … as we watched and experienced it and saw what this company did,” he said. ”We stay so focused on taking care of the customers [it makes us] almost transactional. And this company is just better than that.”
Wal-Mart’s initiative prompted unusual responses from US lawmakers.
Senator Edward Kennedy, a long-time proponent of boosting the minimum wage, said he was pleased to hear that Wal-Mart was suggesting the move.
”When even the head of Wal-Mart, one of the most anti-worker companies in the world, says that a minimum wage of $5,15 an hour is out of date, we know it’s long past time for an increase,” Kennedy said in a statement.
But a day later, after the leak of the Wal-Mart memo on health care, Kennedy was less kind, denouncing the ”despicable company tactics”.
”Twenty-four hours ago, when Wal-Mart’s CEO announced support for an increase in the minimum wage, I was hopeful that the nation’s largest employer was turning a corner in understanding that a strong and prosperous workforce leads to a strong and prosperous economy. But today, those hopes have been shattered,” Kennedy said.
”Instead of spending money on public-relations firms and communications strategies to improve their corporate image, that money is better spent on the hard-working men and women that have made Wal-Mart the economic giant that it is today,” he said. — Sapa-AFP