Wal-Mart CEO Answers Critics

(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.

[bwright036]

As an American and as a former competitor of the biggest "BOX IN THE WORLD",I see Wal-Mart as one of the biggest threats to the American Economy. They have manufacturers under their control by their size and buying power. When a new store opens, they buy, or are given a large parcel of land to build on. Some areas believe that the boost to their economy and their local sales tax revenue will be the best thing for local citizens. Then they sell off little tracts of the sight where restaurants and other businesses pay premium prices to be near the magnet store so they can get a piece of the action. The next thing that you see is local businesses closing their doors because they don't feel that they can compete with the monopolistic chain.

In earlier days,Wal-Mart boasted of "BUYING AMERICAN" as they made deals and signed contracts with small manufacyuring companies to buy in such large quantities that they would basically be the controlling factor as to whether that company stayed in business or not. When the time came for them to sign a new contract, Wal-Mart took control buy telling them how much they would pay, How much time they wanted before they would pay,(usually 6 months dating), and eventually put that company out of business by not letting them make enough profit to keep the doors open. When foreclosure time came, they buy the manufacturers equiptment and move it to China, Thailand, Vietnam, and countries that many people had never even known existed. These countris use slave and child labor to produce inferior products that come back to the U.S. consumers where they grab them up like they think Wal-Mart is the only place to go to get whatever they need at the best price. Just try to go in to any chain department store and see if you can find clothing made in the U.S.A. It's almost a thing of the past.

When a new store opens, the manufactuer's U.S. represenitives buy space in their stores buy supplying them with free opening stock merchandise literally buying space on their shelves, if Wal-Mart accepts their product to be worthy of space in their store. These are not products with "CHIN YANG" or some overseas manufacturing companie's name stamped on them. They are good old American names like Stanley Tool,Cooper Tools, Dockers, Old Navy. The list goes on and on until you wonder, Where are blue collar workers employed. Well, Walmart employs several, but not near as many as they put out of work. You get very little customer service any more, beause it cuts in to their profits.

I could go on and on about unemployment and what has caused it. If it continues on it's current road of greed, manufacturing companies bowing down to Wal-Mart and eventually no manufacturers in the U.S., our only recoarse will be to raise tarriffs on imported goods enough to support our unemployed citizens. Yes, labor unions have done their share to drive manufacturers South, and eventually overseas in order to compete. But, look at what has happened since we, the people, have let Wal-Mart become the worlds largest retailer and controller of the U.S. Marketplace. Something has to change before America is no longer the "Land Of The Free", or at least the land of free interprize. Just think about the power that Wal-Mart holds, and see if you want to support such a company that can eventually bring our country to ruination and then charge whatever thy want to, because everyone else has gone out of business trying to compete. These are only my thoughts,but think about it on your own and voice your opinion while we still have an option to do so. [e-mail]

[achoy123]

I applied for a Walmart card ten days ago while I was living in NY and was approved for $1,000. I relocated the next week, and called to update my status and to find out why I did not receive my card as yet. Karen and Gene from your fraud dep't was very brusque and told me that I have to reapply in 30 days! Kindly forward this email to Mr. Bill Simon, President and CEO of Walmart, because I am a reputable consumer, and I pay my bills on time, I feel my rights as a consumer was violated by the two employees, because I wanted to establish credit in the state of Florida as well. PLEASE HANDLE. Thank you.
This email and any files transmitted with it are confidential and
intended solely for the individual or entity to whom they are
addressed. If you have received this email in error destroy it
immediately.

[achoy123]

I applied for a Walmart card ten days ago while I was living in NY and was approved for $1,000. I relocated the next week, and called to update my status and to find out why I did not receive my card as yet. Karen and Gene from your fraud dep't was very brusque and told me that I have to reapply in 30 days! Kindly forward this email to Mr. Bill Simon, President and CEO of Walmart, because I am a reputable consumer, and I pay my bills on time, I feel my rights as a consumer was violated by the two employees, because I wanted to establish credit in the state of Florida as well. PLEASE HANDLE. Thank you.
This email and any files transmitted with it are confidential and
intended solely for the individual or entity to whom they are
addressed. If you have received this email in error destroy it
immediately.

[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.