In his terrific new book The Bully of Bentonville, BusinessWeek writer Anthony Bianco examines the unethical business model of the retail giant Wal-Mart and highlights some the practices that have rewarded Wal-Mart investors and senior executives but have been so damaging to the US economy on the whole.
- Wal-Mart's abusive policies towards its employees has been widely documented. Bianco analyzes how the company has successfully thwarted union organizing in its stores. Recently it shut down a store in Canada rather than submit ot unionization. Wal-Mart's low wages and lack of benefits mean that employees must rely on welfare and state medicaid to obtain even perfunctory healthceare. The American taxpayers ultimately pick up the tab for Wal-mart's greed. In my state (Maine) alone the price tab to the taxpayers is over $7 million.
- Bianco spotlights many cases where 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
- Wal=Mart's everyday low prices are the result of its forcing the outsourcing of production off-shore, leading to the loss of thousands of American jobs and the transfer of whole industries from the United States to China and other countries.
This week the DVD of the documentary Wal-Mart: The High Cost of Low Prices became available in Germany (Wal-Mart: Der hohe Preis der Niedrigpreise). Hopefully it will be widely seen. But the release of this film coincides with yet another disasterous financial report from Wal-Mart's German subsidiary:
Hamburg - Wie gut informierte Kreise gegenüber SPIEGEL ONLINE sagten, verbuchten die zwei Regionalgesellschaften von Wal-Mart in Deutschland 2005 einen Verlust im niedrigen dreistelligen Millionen-Euro-Bereich. Wal-Mart wollte dies nicht kommentieren. Der Konzern veröffentlicht die Zahlen für sein Deutschland-Geschäft grundsätzlich nicht.
Damit tritt der weltgrößte Einzelhändler hierzulande weiter auf der Stelle. Im vergangenen Jahr hatte das Amtsgericht Wuppertal Wal-Mart mit einem Urteil gezwungen, die Bilanzen für 2001 und 2002 offen zu legen. 2002 lag das Minus bei rund 184 Millionen Euro nach 675 Millionen im Jahr davor. Die aktuellen Werte zeigen, dass sich seither kaum etwas beim Ergebnis getan hat.
There are many reasons for why Wal-Mart's business model has failed in Germany: bad store locations, bad acquisitions, bad publicity, fierce competition from other German discounters, the success of the trade union Ver.Di - just to name a few. It will make a great case-study at the Harvard Business School. But in the long run, Wal-Mart's destructive business model is not sustainable: already its own employees are too poor to shop there.
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