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Wal-Mart's German
problems continue: Is the retailer paying for its arrogance against consumers and workers? Wal-Mart is not exactly a success story in Germany. In fact, the giant US retailer has continued to make losses. Personnel relations are not good and the company has refused to sign the German collective agreements. The turnover of managers has been fast. A bad employer at home in the United States, Wal-Mart has not been a big favourite for workers and their unions when arriving in Europe. Initially, also competitors were worried about a Wal-Mart impact on European retailing. Today, many of these fears appear to have been exaggerated.
As Hans-Joachim Körber, managing director of leading German competitor Metro said some time ago, the concept does not travel. Wal-Mart has lost hundreds of millions of dollars in Germany. Lebensmittelzeitung, the food industry and retailing magazine, has recently tried to analyse the reasons for Wal-Mart's failure to turn profitable in Germany. The magazine points at problems with logistics as well as at difficulties in adapt assortments and prices to what customers need and want. Concept cannot be replicated The German magazine draws particular attention to Wal-Mart's belief that a successful concept at home can be replicated abroad. Lebensmittelzeitung asks whether German consumers really want to travel to a Wal-Mart hypermarket to do non-food shopping when most inner city centres abound with high class stores. This is a different situation from that in the United States, where Wal-Mart has opened supercentres in smaller towns and killed most competition at a large radius. But also personnel relations have not worked all that well. At first, the unions thought that Wal-Mart will just adapt to normal German employer behaviour. Soon, problems started to appear. The American Wal-Mart way with morning cheers and other exercises was not well received by workers, who wanted to be respected as professionals and not treated as circus clowns. Personnel representatives found it increasingly difficult to do their job and soon, the first strikes were a fact. UNI Commerce is working closely with its affiliates world-wide, to support the efforts of American affiliate UFCW to provide Wal-Mart workers with trade union protection. We are also in regular contact with Ver.di and its Wal-Mart members, supporting the union's claim that the American multinational join the collective agreement, as other employers in Germany do. Bad employer in the United States Wal-Mart's approach to labour relations, particularly in the dominating US market, is to keep trade unions out. In addition to being an ideological approach, this is also part of an effort to keep wages and other labour costs down. Without a trade union, Wal-Mart workers cannot force the company to pay the wages which their colleagues in unionised companies receive. Neither can they get the same social benefits, such as medical insurance. These benefits are based on collective agreements, and without a trade union, Wal-Mart can refuse to grant them to its workers. Week after week, Wal-Mart is in the news for violations of workers' rights in the United States. One court case after another is launched, charging the company with maltreatment or discrimination of workers. Wal-Mart is a huge company, with three times as many workers as its closest international competitor. This begins to raise similar questions as have been posed concerning Microsoft: When do we reach the point where Wal-Mart's market position in global commerce becomes so dominant that it should be split up? |
