15 March 2005
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Wal-Mart's Made in
Bentonville concept misfires in Europe, top UK manager leaves, German
stores close, and company ends up in court Wal-Mart continues to be in trouble in Germany. The Bentonville multinational continues to lose money as it fails to achieve consumer confidence. Today's Financial Times Germany says that the Wal-Mart store in Neunkirchen will be closed, with 100 workers losing their jobs. Recently, Wal-Mart's German boss Kay Hafner was caught for threatening workers with store closures if they don't accept management demands for longer hours and lesser benefits. In a few weeks' time, the Wal-Mart's in Solingen und Erkelenz will be handed over to Kaufland, Lidl-owner Dieter Schwarz' hypermarket chain, as provided by their rental agreements. Thus, two exceptionally bad employers - Wal-Mart and the Lidl Group - meet on the marketplace. Wal-Mart's German workers are particularly irritated that the retail giant tries to force them to spy on each other. The company's new ethics code, which they are imposing on their German workers, says that workers must report on colleagues who break against rules - if they don't, they run the risk of being fired. The Arkansas-based retail giant will now end up in court also in Germany, because of imposing this 'ethics code', accused of labour law violations. This adds to its troubles in the United States, where it is a frequent customer of the legal system because of its poor employer performance. Although it is world's largest retailer, Wal-Mart has clear problems with understanding the different cultures of the countries where they go. Particularly when they get under pressure, like in Germany where they have been under-performing for years, they tend to apply home-grown Bentonville solutions to their problems. When they tried their well-known obligatory morning cheer - give me a Wal-Mart - employees in Germany hid in the toilets to spare themselves this strange ceremony, saying they are workers and not clowns. Now, Wal-Mart is making a similar mistake, trying to force them to become informers on each other. What the company has not yet tried is to treat their workers decently and show them respect. Now, Tesco does do this, and the British multinational is indeed much more successful than the Bentonville giant. While Wal-Mart's market share in the UK has stagnated, Tesco has been able to further expand its considerable lead. There is no doubt that the social partnership that has been established between Tesco and UNI Commerce affiliate Usdaw has contributed substantially to the leading British retailer's remarkable success. It will not help Wal-Mart to change their top manager in the United Kingdom, as they are now doing, with CEO Tony DeNunzio leaving for Dutch retail group Vendex. Commenting on this, the British press refers to Wal-Mart's inability to compete successfully against Tesco, and to culture clashes between Bentonville and London. Would it be time for Wal-Mart to reconsider their approach to their human resources, the 1.6 million workers who are employed by the retail giant? Good behaviour and social responsibility pays off. Not even the most expensive and ambitious public relations campaign, like the ones that Wal-Mart and Lidl are now conducting, hide the true nature of these anti-worker and anti-union companies, whose veneers are wearing thin.
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