Date of publication: February 26, 2006
Source: Knight-Ridder
By Cecil Johnson
In ''The Bully of Bentonville," BusinessWeek writer Anthony Bianco produces the most penetrating examination of Wal-Mart's business practices and their ripple effects in American society that has been published since Wal-Mart watching became a serious pursuit of the business press and the academy.
Bianco, who coauthored Business Week's widely acclaimed cover story on Wal-Mart, does not descend to the level of blatant Wal-Mart-bashing that characterizes the commentaries of some of the company's harshest critics. ''Bully" is solid journalism, gleaned from Bianco's own research and from other authors, whom he dutifully credits.
''Today, nearly half a century since Sam Walton opened the first store in Rogers, Ark., it is far from certain that even Wal-Mart can thrive in a Wal-Mart world," writes Bianco at the end.
Bianco arrives at that uncertain assessment after:
Examining how Wal-Mart treats its employees and underscoring the company's extreme hostility to labor unions.
Spotlighting many of the instances in which Wal-Mart has thrown its financial and political weight around to force communities to change land-use restrictions to allow it to build supercenters, despite intense community opposition.
Underscoring how the connection between Wal-Mart's everyday low prices and the outsourcing they cause results in the loss of thousands of American jobs and the transfer of whole industries from the United States to China and other countries.
The fate of the Huffy Corp. of Celina, Ohio, is offered as a classic case of what can happen to a Wal-Mart vendor. According to Bianco, Wal-Mart ordered 900,000 bicycles, conditioned on a sizable, reduction in price per unit.
The bicycle company opened a second factory in Farmington, Mo., that was staffed with low-paid, nonunion workers to meet the demand. But at the Wal-Mart price, Huffy lost $10 million in 1995. Huffy had to negotiate a pay cut with its unionized workers in Celina. The union members readily agreed just to keep their jobs.
But Wal-Mart kept up the price-cut pressure, and the union balked at another wage cut. Huffy then closed its Celina plant, laying off 935 workers. It shifted production to the Missouri plant and opened another in Southhaven, Miss. But even the nonunion workers in those plants earned more than Huffy could pay and make Wal-Mart's price.
The bicycle maker then closed both those factories and subcontracted work to China, where bicycle plant workers were paid 25 cents to 41 cents an hour. But that didn't save Huffy. When it fell into bankruptcy in 2004, its top creditor was its Chinese subcontractor. Its possessions were turned over to the China Export and Credit Insurance Corp., an agency of the Chinese government.
But that's not the real glaring irony of the story. A developer built a Wal-Mart supercenter on the site of the historic old Huffy plant in Celina, Ohio.
Those reprises of what the Wal-Martization of the world is doing to other companies and workers drive home the point that Wal-Mart could be its own undoing if it keeps putting Americans out of work and rendering them unable to shop even at its stores.