Wal-Mart CEO Answers Critics

In Exclusive Interview, Lee Scott Says People Are Attacking The Wrong Company

(CBS)  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.

[texie2]

I have been following the story on Wal-Mart just like all of the other associates(are we still associates?).
I cannot find one thing in all of this that gives respect to the hourly workers. Respect was one word that Sam Walton was big on. He did everything in his power to make sure we as a company were working together, with respect, to make Wal-Mart grow. We did as long as he was alive work together and shared in the glory of Wal-Mart. And we had fun on the way. Where is the Fun and Growth now?
The poster with Mr.Sam's picture on it and the saying"Your people must never feel like they are working for you but that you are working for them." is in all Wal-Mart store lounges. Have the ones in the corporate offices forgotten this?
We really must look a little deeper about the wage and hour issue at Wal-Mart. They keep us at a minimum of hours for our job code and we already know that job titles are being abolished with a reduction in pay. IS THIS AMERICA? The land of opportunity?
Pay caps plus higher costs on our "benefits" with lowered hours equal a reduction in take home pay. I don't know how many can stay but being one of the older associates where will we go? And how many more "flights" are there?

[realpeople4]

A NATIONAL WALK-OUT

Now, there is a very serious thought, and idea.

[realpeople4]

A NATIONAL WALK OUT

Now, there is a very serious thought, and idea!

[strife40]

HERE'S A THEORY ME AND SOME OF MY FELLOW ASSOCIATES CAME UP WITH A FEW MONTHS AGO WHEN ALL THIS ILLEGAL ALIEN STUFF CAME UP. I CAME UP AND PUT THE QUESTION TO THE GUYS OF "WHAT IF BUSH DOES DO SOMETHING ABOUT THESE ILLEGALS LIKE CLOSE THE BORDER AND LET MOST OF THE ILLEGAL MEXICANS ALREADY HERE STAY AND EARN TEMPORARY OR PERMENANT CITIZENSHIP"?...THEN WALMART ,WHO WOULD NATURALLY BE WATCHING THIS WOULD HAVE A GUY AT THE BIG ROUND TABLE THAT WOULD SAY "YOU KNOW WHAT? THIS THING CAN WORK IN OUR FAVOR. MEXICANS WILL BE ABLE TO WORK FOR HALF WHAT WE ARE PAYING OLD TIMERS HERE AND WITH THE GOVERNMENT GIVING THEM EVERYTHING FREE LIKE INSURANCE SINCE THEY AREN'T REALLY LEGAL WE DON'T HAVE TO PAY INSURANCE BENEFITS EITHER. WE CAN JUST GET RID OF LONG TIMERS WHO BUILT THE COMPANY AND HIRE 2 OR 3 TO EVERY OLD TIMER WE LET GO." THINK ABOUT IT FOLKS AND FELLOW ASSOCIATES. IS THIS RIGHT? DO WE NEED TO PULL A NATIONAL WALK OUT? WHAT IS WRONG WITH THIS COMPANY? ONE WORD ...GREED.

[soonervision]

Mr.SCOTT SEEMS TO FORGET WALMART TRY'S TO KEEP THE EMPLOYEE HOURS TO THE BARE LIMITS.30-36 HOURS A WEEK IF THATS WHAT THEY WANT THEY NEED HIGHER WAGES,AFTER DEDUCTIONS ITS LAUGHABLE.OH BY THE WAY WE DID GET A MEETING TO FIND OUT WE WILL PAY MORE FOR INSURANCE,WONDER IF HE REMEMBERS THIS?BY THE WAY DIDN'T MR. SAM SAY OUR ASSOCIATES MAKE THE COMPANY?I THINK MANAGEMENT HAS FORGOTTEN THIS.

[mrsb7]

Walmart lost it's guts. It thought that it had to give in to everyone and be everything to everyone. It diverisified its culture out the window. It decided that color and gender were more important than ability. It lost it's greatest people because it was afraid that it might make people upset. It is so busy pleasing the union that it is losing it's soul- it's long term associates. It is a company running scared of everything. It will not last another 19 years.And the great man that created it could not produce a great man to follow him- he might have but I think the little men that followed him have him and those like him under house arrest. Coughlan was at least a fighter. Scott is a weak follower and only knows how to play into the looters hands.

[woodycruzer]

i have been a walmart associate for over 15 years. when i was hired in i was told as long as i work hard and do a good job the sky was the limit, no matter what road i took, that sam walton did not believe in pay caps that i could go as far as i wanted, and made my career choices accordingly. Over the years i have done a *** good job for the company, i have trained many many associates, managers and have worked in countless stores teaching and training anything asked of me. i used to defend the company when unions would approach me said they weren't needed here that this was a great company to work for. now i am almost embarrassed to tell people where i work i have to eat my own words...now i feel like excess baggage. i understand pay caps for the good of the company but long term associates should be excluded from that we built the company
we made it what is today. if i had known when i hired in that my job would end up like this i would not have stayed this long. i feel betrayed. i have honored my contract with wal-mart can they say the same.
a very diappointed associate.

[walmartvet]

To those of you who ask why we don't leave, we are all trying, but please understand, a lot of us are older, close to retirement age, and had planned on retiring from Walmart, very happily. Then the decision was made to get rid of the older long term associates. Our pay was capped and if we go to part time, our spouses lose the insurance we have had for almost 20 years- they have really done a number on us and it is a little harder but not impossible to get a job with benefits at 60. There is a lot more going on and a lot of writing on the wall for the long term associates that were loyal to Sam and it is scary for us. We will get out because we are not the types to stay around where we are not wanted. But we are the types that made Wal-Mart work, that taught the new ones the culture which is probably why they want us gone.

And when they were making their plans they forgot that we as associates are shareholders too- or in my case- used to be. I will not own stock in a company I don't beleive in.

[spredbury]

I am not a Wal-Mart employee but I use to be a Wal-mart customer. I have not shopped at Wal-mart in more than a year and will not shop there again. I read all the bad press about Wal-Mart and don't know what is or isn't true. I must admit that I am inclined to believe what I read. But, I do know the merchandise is of poor quality. Lowest price isn't always best when it impacts quality. You get what you pay for. You may not pay much at Wal-mart but you don't get much. But my biggest complaint with Wal-Mart is the rudness and discourteous attitude displayed by Wal-Mart employees, especially the managers. They always present the attitude of "why are you bothering me?". They always seem to be too busy to provide service.

[strife40]

I would also like to state that realpeople below made some great comments as well as others on here who really know how to run Walmart and have been loyal for many years and actually know how the real Walmart is supposed to be run and be successful. The caps are wrong, the changing of clothes to uniforms is shaky at best and who really wants to move up when your capped and can't get any raises. One co-manager at my store had the audacity to say if you don't have a good eval or slack off because of the cap your money will be taken away. Has anybody out there experienced that yet from a manager? Unbelievable but true.

[strife40]

Just got in from Walmart this morning to stop and read all of the truth and real reports that CBS wouldn't run a couple of days ago. One person on this board wrote that she was glad that her husband works for Walmart. Big deal. I have worked hard and continue to work hard and I'm not a brown nose either but those people who do get ahead such as your husband or whoever are favored in some way or another. Say what you will. I'm sure there are many others out there that will agree and don't just go in to punch a clock. Walmart's arrogance in not even warning people of there jobs being taken away is downright dirty. That's not "guts enough to try something different" madam . Stop getting on the soapbox spreading your B.S. There are too many good workers out there that are down and underappreciated to just take what you say. It's people like you that make so many others of us angry with your delusions of grandure.It's just throwing people under a bus or just running over them saying as one manager put it to us in our store "if you don't like the changes you know where the door is". Change ,my dear is only good in small amounts or moderation. Especially in retail where people have more of family responsibility than say someone with no children that live in some cubicle on a computer at some big corperation everyday.

[realpeople4]

How many former Wal-Mart associates are there in the U.S.A? Of this total, what percentage are retired?

[levgar77]

I was an associate with Walmart for 8 years but recently left the company, less then a month ago. I left because of the changes made or being made. I like many associates whom been with the company that long, I had a sence of ownership. As a former Dept. Manager in several dept's, customer service has fallen by the waist side and tasks have become the most important thing. Why is Walmart trying to be like the number 2 company Target--New dress code, Blue shirts and Khaki pants--No Layaway--No Paint Dept--No Fabrics. It's also sad when you have people coming out of the training program and the Departments know more then they do. Sam Walton was on to something, I realize things have changed since but he had a simple theory--You shelve the product, at an affordable cost, give customer service, and you will successful. I realize I'm bouncing around on subjects, but what is the incentive to move up within the company. Work as an Assistant Manager, work a minimum of 50-55 hours a work and a pay that doesn't equal. And, the time away from your family--which you can't put a price on that.

[longterm2]

Wal-Mart is definitely not the same company that it was 10 years ago. I can remember when associates enjoyed coming to work and took pride in what they did. That is no longer the case anymore. Morale in our stores has been declining for several years now. People no longer feel appreciated for what they do. The so called "flights" taking place this year have made the situation worse. Long term associates are no longer appreciated for their length of service or experience. Instead, they are seen as a financial burden to the company because of higher hourly wages and more money paid out for benefits. The company would rather hire "peaktime" associates who make half the amount of money and who will have less benefit choices once they reach their elgibility date of one year. Also, the "flights" taking place will mainly effect longer term associates. It's sad when you go to work everyday wondering if your job is the next to be eliminated. I feel sorry for the accounting associates and layaway associates who have spent years thinking they were working their way up only to be demoted into lower paying pay classes. Rumor is that training coordinators are next. Lee Scott needs to realize that in order to have happy customers he will have to have happy associates. I don't agree with union representation, but if this company doesn't get a handle on alienating it's associates they are going to have big problems in the future.

[dawnylu]

I'm sorry that your views as Walmart associates are so poor. My husband's worked for Walmart for 12 years. We have TRANSFERRED with the company 5 years ago by choice and could again if we want. When they see a hard working employee that's willing to go clock in at work, and give an honest days work, they reward that. My husband is by no means a brown noser and he does expect his crew to work when they clock in, and he has their respect, and that has shown up through his evals that his crew turns in on him. I have never worked for a company that has supervisors and managers evaluated by the employees that work under them, that is a good idea Walmart, more companies should do that. Walmart has provided for our family very well. I am proud that my husband works for Walmart. I shop there for my personal shopping, as well as for the company I work for. I find there pricing and service great. I have worked in management for other large companies, new rules come down, sometimes they work well and on occasion they don't, at least Walmart's brave enough to try something new. When you stay in one place to long without change, other companies soar past you. You have to keep evolving, and no company is without flaws. But with Walmart,it's an EXCELLENT company and there's room for advancement for the ones who are willing to work for it, not just clock in.

[avalonstar]

Working for Walmart many years.. i am saddened at the changes.
The closeing of layaway and Fabrics(most stores) and soon the closing the paint and sporting goods counters i hear as well is making this onetime giant company a soon to be small fry in the retail world.
as someone said before by phasing out thier job they will get less pay with Walmarts Union type payscale.

Think about it.. they close layaway/fabrics/paint counter/sporting goods counter.. That's about 15 peoplle who will lose thier job and be absorbed into the store as a reguler worker and recive less money after thier pay is taken away from them due to thier new job code.

And the news about the new race based stores sounds crazy.. this is america and i don't feel like working in a store where everything is in spanish or some other language.
I'm not racist, in fact i am of mixed races.. but how am i supposed to work/shop in a store where i can't read the signs.

[realpeople4]

Oh yes Million Dollar Boys,

When making your UNANNOUCED SURPRISE MYSTERY VISIT, do dress as a blue collar worker, make a small purchase; bottle of water, candy bar (don't use your discount card). Stand in the longest line, listen and hear; your customers, the pages, the attitudes. Then after checking out, try and locate a CSM, or any other associate who will page a "manager" for you, tine how long the "manager's" response takes, complain - about anything (check out the bathroom's) and listen to their response.

[overthecap2]

CONTINUED............

Seriously, Lee. If you want to get a true vibe about what your associates (who are also CUSTOMERS) think about the company and its current changes and direction, you need to get out into the stores UNANNOUNCED and ask us. Specifically those of us who have 10+ years with the company. I can tell you for a fact, I won't support a company who doesn't support me. I will not buy Wal-Mart stock, and have changed my profit sharing and 401k distribution to not invest in Wal-Mart stock. I suggest others do the same.

[overthecap2]

Wal-Mart used to be a great company to work for. Now, it is awful. For us long term associates, our hard work and dedication was rewarded this summer by a pay cap. For those of us that are over the cap, we no longer get annual raises. Where is the incentive to provide this great customer service that Lee Scott wants us to give our customers? Yes, the desire to do a good job comes from within but we are given NO incentive anymore than to do the bare minimum. We can not transfer to other facilities or even change jobs in our own store. I think most of us associates over 10 years feel like we have a target on our back. It's just a matter or time before Lee Scott and Susan Chambers get rid of all of us. We work in a hostile work environment because of these changes and how they are being executed.

Why don't we leave if we aren't happy? Because I MADE this company what it is today and I shouldn't have to. I actually believed in the "Old Wal-Mart" When I was hired I was told the sky was the limit and that "our people make the difference" What a crock that turned out to be. I gave Wal-Mart the best working years of my life. It probably wouldn't be possible to start over this late in life-who is going to hire a 50+ year old woman who has worked at Wal-Mart for the past 20 years?

[realpeople4]

Dear Mr. Scott, et.,al.

I Love Betty Boop's comment.

If, I EVER saw JUST one member, just ONE member of the management team -EVER- practice the 10' Rule, to ANYONE (Customer or Associate), I would lay down and join Mr. Sam for the biggest SHOCK of MY life. Get out the defib.

Move over Jerry Springer, stop chasing Paternity Revalations, and star a show for former Wal-Mart Associates. Forecast: Make your Stock purchases (on The Springer parent company) now.