Wal-Mart CEO Answers Critics

Lee Scott has been called the most powerful CEO in America. He runs Wal-Mart, the world's largest retailer.

But lately, Scott's hardest sell has been his company's image, which has been under the target of relentless attacks from union groups that say it pays poverty-level wages. As CBS News correspondent Anthony Mason explains, the company is also under attack from Democrats who have their eyes on the next presidential election.

"I don't see any indication they care about the fate of middle-class people." Sen. Joe Biden, D-Del., says.

So how does Scott feel about being used as a political issue?

"Oh, I think they're attacking the wrong company," he says.

In a rare interview at Wal-Mart's Rogers, Ark., store, Scott offers a reminder that 127 million customers shop at Wal-Mart every week.

"It's surprising to me to me that anyone would want to take a chance at irritating people who like us," he says.

But Wal-Mart has paid a price for the bad press. A leaked internal study showed up to 8 percent of the store's customers no longer shopped there because of its reputation. Even Scott admits the critics struck a nerve.

"When we started getting that criticism, it hurt," he says.

Wal-Mart has hired outside image consultants and set up a public relations war room and gone on the offensive. One of their recent commercials says, "Last year alone Wal-Mart created tens of thousands of new American jobs."

From its modest beginnings as a five-and-dime stores in Bentonville, Sam Walton's company has become a corporate colossus — a $300 billion-a-year business that is also the largest private employer in the country.

But does this mean the company has a responsibility to pay a living wage? Scott says he doesn't know "what specifically a living wage is. Our average wage is over $10 an hour."

In the past year, after a study showed that nearly half of the children of Wal-Mart workers were uninsured or on Medicaid, the company expanded its health care plan, and last month raised wages 6 percent at many stores.

Does this imply that the company wasn't paying enough in the first place?

"I guess that if you wanted to make that case. I'd prefer to look at it as we have been raising wages and improving benefits for years," Scott says.

But the CEO concedes that criticism has forced one sweeping change: the greening of Wal-Mart.

Scott has committed to cutting Wal-Mart's energy costs by 30 percent.

"Now, you may not think of this, but that is a thing of beauty," Scott adds.

In an experimental store in Colorado, Wal-Mart is already testing energy-saving technologies.

The Rogers store has display cases with light-emitting diodes that give off much less heat, making it cheaper to cool.

But Wal-Mart skeptics still doubt the company's commitment, suggesting, perhaps that the company is just trying to "green wash" its image.

"The one thing I've found at Wal-Mart is trying to be overly sophisticated and manipulative is not our strength," Scott adds.

But the company that's made its name cutting costs is smart enough to know that improving its image could also improve its bottom line.
  • Melissa McNamara

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