business news in context, analysis with attitude

  • The Wall Street Journal and the New York Times, as well as numerous other papers, report this morning on Wal-Mart’s two-day conference aimed at explaining to members of the mainstream consumer media why it is good for America. It is part of an overall campaign being fought by Wal-Mart on numerous fronts – through public relations and in advertising, as well as in communities – to improve its image.

    Company CEO H. Lee Scott Jr. noted that when Wal-Mart stores open, often more than 3,000 people will apply for 300 available jobs. "It doesn't make sense that people would line up for jobs that are worse than they could get elsewhere, with fewer benefits and less opportunity,” Scott said.

    Noting that one newspaper ran a headline saying that "Wal-Mart's low prices come at too high a cost," Scott said that a better headline would be “Wal-Mart is great for America.”

    The NYT writes that “Scott objected to assertions that Wal-Mart could afford to pay its workers far more, saying the company has a thin profit margin and annual profit of $6,000 an employee, compared with $143,000 at Microsoft.

    "’Some well-meaning critics contend that Wal-Mart should be setting the pace for wages and benefits for the entire economy, just as a unionized General Motors was said to have done in the postwar period, helping usher in the great American middle class that this country is so proud of and rightfully so,’ he said. ‘The facts are that retailing doesn't perform that same function in the economy as G.M. does or did. Retailing has never occupied the top tier of wages in this country, or in any country.’”

  • Good news for Wal-Mart in the town of Bennington, Vermont, where voters defeated a move that would have limited retail stores to 75,000 square feet or smaller. Wal-Mart wants to expand its store there to 112,000 square feet.

    It’s an interesting vote because Vermont state lawmakers are considering legislation that would restrict retailers to just 50,000 square feet. And the National Trust For Historic Preservation has placed the entire state of Vermont on its list of the "10 most endangered places," saying that the state’s “special magic” was threatened by an explosion of big box stores.

  • USA Today reports that members of the Walton family, who spent a total of “$3.2 million on lobbying, conservative causes and candidates for last year's federal elections,” now has “joined a coterie of wealthy families trying to save fortunes through permanent repeal of the estate tax.

    However, the paper notes that Aubrey Atwood Rothrock III, the Washington lobbyist hired by the Waltons, says that the estate tax repeal is not the focus of their efforts, but rather legislation that would increase their ability to donate money to charities through the family foundation.

  • The Associated Press reports that supporters of a bill currently in the Maryland General Assembly that would force Wal-Mart and other, similar retailers to spend at least eight percent of its total payroll on health benefits or pay the difference into a state healthcare fund believe that the legislation is virtually veto proof.

    The Fair Share Health Care Act would impact any company with more than 10,000 workers. Gov. Robert Ehrlich has promised that he will veto the bill.

    When calculating a company's eight percent, the bill counts only wages below Maryland's median annual income, about $55,000.

KC's View:
The bill may be veto proof. But it isn’t litigation proof. And you can bet the farm that if this bill becomes law, Wal-Mart will file lawsuit after lawsuit and bring this thing all the way to the Supreme Court if necessary.

As for the media conference, if Lee Scott thinks that newspaper editors are going to start running headlines like “Wal-Mart: Good For America,” then he’s smoking something. He can run media conferences from now until the cows come home, and newspaper editors and writers – a traditionally cranky and cynical lot – aren’t going to show the kind of obsequiousness that he seems to want.

Most journalists make a living asking questions. And as often as not, the people being asked the questions think that the queries are out of line.

Which is fine. It’s probably why journalists are seen by a lot of people as somewhere below slugs on the food chain. (We wouldn’t have it any other way.)

But here’s one way we’ll all be able to tell how frank Wal-Mart intends to be. Let’s see how specific and honest the folks there are about the Tom Coughlin resignation/retirement.

One more thing…

Does anyone else wonder what Sam Walton would think about his heirs hiring someone named Aubrey Atwood Rothrock III? (Think Aubrey does much of his shopping at Wal-Mart?)