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Ridicule and anger
instead of results and profits: Wal-Mart has lost much more money in Germany in 2001 than what was previously thought. In its last issue, leading retail weekly Lebensmittelzeitung writes that the US commerce multinational made a 675 million Euro loss that year, or around 600 million USD at the exchange rates of that period. That is about 50 per cent more than what analysts estimated. This revelation comes as a court in Wuppertal, where Wal-Mart's German headquarters are placed, rejected the company's demand to keep its result secret. The Bentonville-based retail giant had already been forced to publish the 1999 and 2000 results, against its will. Also Wal-Mart's turnover dropped from the previous year, and was 2.6 per cent lower than in 2001. This was, however, a general trend in German retailing. Wal-Mart misread the local scene Altogether, Wal-Mart has not made a real success on the German retail scene. It is said to have misread consumer habits, and customers have not been drawn to its hypermarkets, many of which have been rather worn-down and in less than optimal locations. Already late 2000, German retail multinational Metro's CEO Hans-Joachim Körber predicted that Wal-Mart will not succeed. - The company's culture does not travel, and Wal-Mart does not understand the German customer, he said to Lebensmittelzeitung in December that year, and proved to be right. It is widely seen that Wal-Mart got a rather poor store network when it established itself through the purchase of two chains of large supermarkets and hypermarkets. Logistics went wrong in the beginning, trucks queued up at the delivery gates, and stores were untidy. The American retailer did also find it difficult to get the competent and committed staff that it would have needed to succeed in the highly competitive German retailing environment. Morning cheers instead of respect for workers Instead of a respectful treatment and sensitivity to the host country's traditions and labour relations, management tried to apply the Bentonville formula with morning cheers and human resource gimmicks. This was not well received, and workers reported on hiding in toilets during the morning exercises imposed by their American managers. We are workers, not clowns, some of them said, illustrating the cultural differences between the US multinational and its European workforce. Although Wal-Mart has not been able to run an outright union busting campaign in Germany, it has done what it could to make life difficult for its union representatives. Initially, the company tried unsuccessfully to stop the shop stewards and works councils of the two chains that it had bought - Wertkauf and Interspar - from working together. Later, it refused to join an employers association or sign a collective agreement, believing that it can emulate its American union busting approach. Strikes forced respect for collective agreements All this was in vain. After a series of strikes at Wal-Mart stores, as well as strong pressure from UNI Commerce affiliate ver.di and its predecessor unions HBV and DAG, the Bentonville multinational had to paste declarations on all its bulletin boards, telling staff that it will respect the collective agreements for commerce. Ironically enough, once again misreading the sentiments in its host country, it accused the ugly trade union of forcing it to do this! Wal-Mart's latest adventures in Germany have followed the same lines. Workers have been threatened with closing down of stores if they do not agree to major concessions in working and shop opening time arrangements, as well as in incomes. The company's German CEO Kay Hafner is said to have personally threatened store workers with this, just days after the Bentonville management decided to close its store in Jonquière, Canada rather than to accept a trade union and a collective agreement. Informer hotline and kissing ban draw anger and ridicule Also the attempt to impose an informer hotline and a kissing ban - as Germany's leading business newspaper Handelsblatt calls it in today's issue - backfired. To inform anonymously on co-workers remind most Europeans of the times of dictatorship and repression gone by, times which they hope never will return. In Germany, with so recent memories of a virtual Soviet occupation with a developed informer system supporting the KGB and Stasi repression machineries, this issue has been particularly sensitive. Hardly surprisingly, and in conformity with its arrogant philosophy, management refused to consult with the German works council in advance, which was a breach of labour legislation and lead to a court case being raised. The most recent revelations by former Wal-Mart vice president Tom Coughlin, who was forced to resign only a few weeks ago, show that forcing workers to be informers is not coincidental, but deeply imbedded in a corporate culture that can be described as being rather perverse. Defending himself against allegations that he spent undeclared corporate money for personal purposes, former security director Coughlin has apparently let media understand that he actually used it to pay off informers. Thus, he could find out who were union supporters, and focus the company's union busting efforts on them, in accordance with the infamous handbook for managers. And the kissing ban? Wal-Mart's attempt to ban intimate relationships between its German co-workers have drawn ridicule over the company all through the European press. But nobody was really surprised that - once again - Wal-Mart succeeded to shoot itself in the foot.
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