Momentum builds for critics of behemoth Wal-Mart

By DON McINTOSH, Associate Editor

It took Wal-Mart three decades to grow into the world’s largest corporation … and three years to earn the world’s worst corporate reputation. Both achievements are the product of the company’s basic business strategy: hold down costs, regardless of what that takes to achieve.

Wal-Mart’s success in holding down costs enables it to underprice competitors — and still walk away with fantastic profits. And that has made the Walton family, descendents of Wal-Mart founder Sam Walton, the world’s richest family. Their combined fortune is estimated at $90 billion.

Wal-Mart holds down costs in every way imaginable: cutting out any middleman, salesman or wholesaler, and dealing directly with producers; haggling down the price per unit, often by insisting that suppliers produce in China or other low-wage countries; using state-of-the-art technology to track inventory and manage distribution; locating where cheap real estate can be found; using standardized, no-frills architecture; hitting up local governments for handouts and subsidies, when possible; paying low wages to employees and providing skimpy benefits, forcing employees to rely on public benefits for their families’ basic food and health care needs; and, in a number of cases, breaking laws when they get in the way: overtime laws, civil rights laws, laws against hiring illegal immigrants, environmental laws, laws protecting the right to unionize. And contrary to Wal-Mart public relations claims about giving back to communities, Wal-Mart and the Walton family acquired a reputation as legendary cheapskates.

As the title of a new documentary on the company asserts, Wal-Mart’s low prices come with a high cost. For “Wal-Mart: The High Cost of Low Price,” director Robert Greenwald investigated nearly every claim Wal-Mart detractors make. The result is a devastating critique of the company, which couldn’t be timelier, as Wal-Mart faces a growing backlash for its business practices.

Greenwald starts the film with a look at H&H Hardware in Middlefield, Ohio, a family-owned business for generations, which closes as Wal-Mart comes to town.

He travels to China, Bangladesh and Honduras to talk with factory workers, who make the products Wal-Mart sells, about their working conditions. He visits Germany, where union Wal-Mart workers get 36 paid vacation days a year — because that’s what German law requires. He talks to a woman who was kidnapped in a Wal-Mart parking lot, while inside, security guards patrolled to prevent theft.

And he talks with current and former Wal-Mart workers, lots of them: workers whose union campaign was demolished by the company’s anti-union rapid response team; former managers who feel guilty about what they were expected to do; women workers discriminated against for promotion; workers so poor they miss meals and get on public assistance; workers who take up collections to help their co-workers.

The film ends on a triumphant note, with accounts of communities that rose up to keep out new Wal-Mart stores.

Greenwald chose unconventional means to distribute the film: Rather than giving it a theatrical release, he first made it available online, to individuals and community groups who would order the DVD and host public showings of the film. In its first week, it got more than 7,000 screenings. The film got a big reception among critics of the company in Oregon, where active campaigns against Wal-Mart have formed in at least six communities: Sellwood, Bend, Beaverton, Hillsboro, Oregon City and Hood River. At Lane Community College in Eugene, over 700 people attended. Portlanders saw the film at multiple locations.

The DVD is available for $12.95 — at — and the film will soon be playing in theaters, like Portland’s Cinema 21, where it will open Jan. 6.

With shoppers avoiding Wal-Mart for ethical reasons, and courts levying fines on Wal-mart for corporate misconduct, and communities uniting to stop new Wal-Mart stores from opening, the company is waking up to find its bad reputation hurting its bottom line. In the last year, for the first time, Wal-Mart has begun to respond to its critics. It began to pump major money into advertising specifically to improve its image. And it made a pile of promises: better health care plans for its workers, better environmental practices, more generous charitable contributions. It promised to end workers’ rights abuses, which were said to be the fault of overeager local managers. And it issued an appeal to Congress to raise the minimum wage.

In the last couple years, two national organizations have formed, with union support, to address Wal-Mart business practices — and

The groups say they’re not out to destroy the company; they just want to make it a good corporate citizen that plays by the rules and shares its prosperity. They also say Wal-Mart’s recent promises are cheap and that the company has a long way to go.

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