Wal-Mart's low-cost recipe for success is under attack from the threatened Black Friday walkout as workers protest low wages and benefit cuts. The retailer is fighting back, accusing organized labor of making trouble.
As the hottest shopping day of the retail calendar looms, the world’s largest retailer, Wal-Mart, is embroiled in a battle to defend its image, even its formula for success. A growing number of employees, protesting low wages and benefit cuts, is vowing to walk out on Black Friday.
Wal-Mart charges that outside union agitators with the United Food and Commercial workers union (UFCWU) are making trouble. Both sides have filed grievances with the National labor Relations board (NLRB).
Coming alongside the failure of talks between labor and management at yet another iconic American company, Hostess Brands Inc., Wal-Mart’s travails have put a sharp focus on working conditions following the worst post-Depression recession in the nation’s history, say both labor and business experts.
“Wal-Mart has become the poster child for all the issues surrounding labor right now,” says Scott Testa, a Philadelphia-based business consultant and blogger who has studied Wal-Mart’s business practices extensively. The company has implemented aggressive anti-union measures, he notes, closing a store in Canada rather than negotiate.
The issues at stake are not peripheral, says Mr. Testa, adding that they go to the very soul of Wal-Mart’s business model. The Arkansas-based company, founded a half-century ago by Sam Walton, lives and dies by its ability to cut costs, he says.
Testa notes that Wal-Mart has evolved over the years by dwelling on the fringes of urban areas.