Weekend Question 1: How Did Wal-Mart Allow Itself to Get Embarrassed by Andrew Young?
Okay, I’ve moved this up from when I planned to post it because:
- A lot of people are covering it.
- I want to glom some traffic from them.
- Not necessarily in that order.
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ANSWER TO QUESTION: It’s part of a much bigger problem for what still is, but may not be for much longer, the world’s most successful retailer.
Simply put, Wal-Mart has lost its way. The utterly predictable Young fiasco is a symptom of the company’s larger problem.
Mr. Young’s company was hired by Wal-Mart in February (HT Debbie Schlussel) to “help promote Wal-Mart through interviews, speeches and editorials.”
For those who missed it, here’s what Young said to a newspaper that led to his “step(ping) down from his position as head of an outside support group”:
Young, once a close associate of the Rev. Martin Luther King Jr., said his decision came after a report in the Los Angeles Sentinel, which he said was misread and misinterpreted.
In an interview, Young was asked whether he was concerned that Wal-Mart causes smaller, mom-and-pop stores to close.
“Well, I think they should; they ran the ‘mom and pop’ stores out of my neighborhood,” the paper quoted Young as saying. “But you see, those are the people who have been overcharging us, selling us stale bread and bad meat and wilted vegetables. And they sold out and moved to Florida. I think they’ve ripped off our communities enough. First it was Jews, then it was Koreans and now it’s Arabs; very few black people own these stores.”
Young said he decided to end his involvement with Working Families for Wal-Mart after he started getting calls about the story.
“Things that are matter-of-fact in Atlanta, in the New York and Los Angeles environment, tend to be a lot more volatile,” he said.
He said working with the group also was “taking more of my time than I thought.”
Young is Exhbit B on how Dr. King’s civil-rights movement has become a money-grubbing, bigoted caricature of its former self after his death (Exhibit A is Jesse Jackson). Someone needs to tell me why I shouldn’t translate the second bolded paragraph above as follows “In Atlanta, it’s okay to be a black racist.”
But back to Wal-Mart. At some recent point, it decided to try to make nice with enemies who have no interest in reciprocating. So in addition to hiring the now out-of-here Young, it has:
- Softened its shoplifting policies (third item at link).
- Taken on “Lefty Apologist for Islamo-Fascism” Harriet Hentges (Schlussel’s apt description in a different post) as “Director of Stakeholder Engagement.”
- Most recently, trumpeted a pay-increase policy with accompanying pay caps that appear to be disincentives for higher earners.
- Pledged to be so green that it will become “a company that runs entirely on renewable energy and produces zero net waste.”
Now you could try to build a case that each of these decisions, especially the last, makes long-run business sense, but I think the company’s “See, we’re not such bad folks after all” air betrays the opposite. It’s clear to me that the suits at headquarters in Bentonville, Arkansas think that gestures like these will placate their enemies. They are wrong: Nothing short of across-the-board unionization will be enough for some; nothing short of a serious drop in the company’s business fortunes will satisfy most of the others.
Wal-Mart shareholders (remember them, the ones company management supposedly works for?) had best hope that the Young embarrassment and the reaction to the pay-package revisions cause a serious rethink.
The rest of us need to root for the company to come to its senses as well. At least one outfit thinks that the company’s hiring record has been exemplary (from the USAT link on Young’s hiring) — “Last year, Wal-Mart was named one of the 30 Best Companies for Diversity by Black Enterprise magazine.”
More important to our pocketbooks, the economy needs the company’s legendary cost-cutting ways to continue. An independent study by private firm Global Insight, a privately held economic analysis company, found that:
Wal-Mart saved each American household, on average, ound that the expansion of Wal-Mart over the 1985 to 2004 period can be associated with a cumulative decline of 9.1% in food-at-home prices, a 4.2% decline in commodities (goods) prices, and a 3.1% decline in overall consumer prices as measured by the Consumer Price Index-All Items, which includes both goods and services.
According to the USAT link on Young’s hiring, that meant $2,329 in 2004 to the average American household.
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UPDATE: Ace has been on this. Others (pro- and anti-Wal-Marters included): No More Mister, The News Blog, Wonkette, Demagogue, American Street, Shakespeare’s Sister, Same Facts, Facing South, National Review’s The Corner, QandO (scroll to update)
UPDATE 2: The New York Times’ version of the story (probably requires registration) has a different quote from Young on Atlanta’s culture: “I was speaking in the context of Atlanta, and that does not work in New York or Los Angeles.” Now how does THAT happen?
What I’d like to know is how all of those terrorist cell phones are to be distributed now that the small retailer is heading for the hills. Please advise.
Comment by Todd — August 18, 2006 @ 5:09 pm
[...] It so happens that the comments about Jews, Koreans, and Arabs that just got Andrew Young fired from his gig at Wal-Mart were made to the Los Angeles Sentinel, an influential black newspaper. So here’s the question: do they indulge in this crap because they really believe it and perceive the supposed “authenticity” of their audience as a license to be honest, i.e., are these Kinsleyan gaffes? Or are these old-fashioned cases of telling a group what you think they want to hear, whether or not you yourself actually believe it? [...]
Pingback by Hot Air » Blog Archive » Nagin: Feds would’ve moved quicker if Katrina hit Orange County or South Beach — August 18, 2006 @ 8:56 pm
#1, Good question. A better one is if WM is such a money-grubbing outfit conerned about nothing else, why did it have a limit on the number of wireless phones could be purchased?
Why, besides stupid PC, the FBI is so committed to publicly pretending these high-volume wireless phone purchases are not important is mysterious. If people are told that it is not a big deal often enough, they will believe it.
Comment by TBlumer — August 18, 2006 @ 10:31 pm
Apriori note: I own some WMT. But it had it in the ‘Keep and Ignore while collecting dividends’ category, so any of my thoughts are not based on a fully up-to-date perspective.
- “They ran the ‘mom and pop’ stores out of town…the people who’d been over-charging us.” I tend to agree with this sentiment, without the ethnic element. In a rural town, there may only be one small grocery store. A WMT arriving can not only offer lower prices to all consumers, but offer jobs with upward mobility potential. Common sense item A. The ‘mom and pop’ store would go to the now-adult children, when the parents retired. No matter how hard you worked or how good you were, there would be little to no chance you’d end up taking over the operation as a reward for loyal productive work. Common sense item B. The ‘mom and pop’ store is likely categorized as a small business, hence with small business employee benefits; i.e. little to none. While I don’t have statistical data on this, it seemed logical to me that the employment benefits at a WMT were likely to be better than the standard ‘mom and pop’. So WMT could bring to a rural area (a) lower consumer prices and (b) a different jobs situation, potentially a better one, due to upward mobility opportunity and large-employer style benefits. (Example: A small business, under 50 people, would be exempt from protecting an activated duty military person’s job upon return from deployment. WMT not only must ensure re-employment upon return; they also are a company that has policies so you may be paid the differential if your WMT salary would be higher than the military pay, protecting you from lost income.)
(to be continued)
Comment by cornfed — August 20, 2006 @ 10:26 pm
#4, all great points. Addtionally in the beginning, a lot of the early became half-millionaires or better because of the stock ownership and 401(k) plans. That’s a lot less likely now (though it may be happening at other up-and-coming comapnies as we sit here), but definitely an untold story.
Comment by TBlumer — August 20, 2006 @ 10:40 pm
- On image: WMT’s domestic growth rate from new store openings was going to slow unless they attempted to enter the urban market. This is why they’ve looked at their image. Somewhat predictably though, it’s a futile attempt. We’ve gone from the evil one is MSFT to Big Tobacco to WMT. When will they find someone new to pick on?
- RE: “It’s hard not to see this as a has partial give-in to the anti-gun crowd.” Actually, I don’t see this [the decision to stop gun sales at selected stores] as a cave-in to the anti-gun crowd at all. Perhaps I’m just a very rational person, and tend to reflect on the cash flow perspective of things. Selling guns requires significant overhead: background check paperwork, employee training to ensure the paperwork is completed correctly, ensuring one or more paperwork-trained employees is available (or posting a sign on the hours when guns sales are possible), cooperating with BATFE inspections, etc. Visit a Dick’s Sporting Goods: Notice the gun sales are within a store-within-a-store type area, and staffed by personnel specially trained for the paperwork. Gun buyers are more likely to get better prices and selection from specialty gun stores, who can buy/import in quantity and advertise to their target market. Recall, WMT doesn’t advertise much. I doubt they sold many guns. They’ll still sell ammo, accessories, gun range passes, BeeBee (sp?) guns and such that don’t meet BATFE paperwork requirements, etc. WMT’s business model and culture is to make decisions for BUSINESS reasons — profit and loss, costs vs benefits — not for political reasons. To carry a gun inventory and employ enough trained personnel is a cost; if that store sold very few to no guns, then that Store Manager should be able to decide to not carry them, in order to focus on the products that are profitable. WMT should not make politically correct decisions, either pro-gun or anti-gun. Let the market decide; e.g. your local Cabella, Dick’s Sportings Goods, the monthly gun show (at the fairgrounds or civic center), the ‘mom and pop’ gun dealer, your local Gun Club and Shooting Range may actually be providing the best service: price, selection, and in some cases an on-site range for product tests. WMT is great for mass category goods; but some categories of goods are better in specialty stores. I would buy water color paint for kid’s school supplies at WMT; but oil-based art paint, paper or canvas, and sabel brushes at a specialty store.
Comment by cornfed — August 20, 2006 @ 10:52 pm