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Wal-Mart CEO Discusses Health Care, Oil Addiction

January 12, 2009 2:33 PM

Herman ABC News’ Charles Herman reports: While televisions across the country this morning showed President Bush giving what is expected to be his last press conference, Wal-Mart’s CEO Lee Scott was taking similar action in New York before an audience of his peers at the National Retail Federation’s annual conference

And just as the leader of the free world used the opportunity to reflect on broader themes, the leader of the world’s largest retailer spoke not about the weakest year in retail sales since 1971 but on larger issues confronting the nation and how retailers can play a constructive role in the coming changes.

“I believe that all of us here -- and really every business -- has a responsibility and an opportunity to be part of solutions that help make this country stronger,” Scott said in his prepared remarks.

Ap_lee_2_scott_090112_main Outlining the issue he believes facing the nation, Scott said, “How do we come out of this difficult period in our history as a stronger America? Are we going to end the national embarrassment of 47 million uninsured and finally make health care in this country affordable for working men and women? Are we going to end our addiction to foreign oil and put our country on an economically and environmentally sustainable path through alternative sources of energy? Are we going to end the shameful slide of our education system and offer our children the knowledge, training and opportunity they need and deserve?”

Sounding perhaps more like a politician than a chief executive, Scott, who will step down from that post on Feb. 1, 2009, but will continue as chairman, told the audience of retailers, “To those who say that now is not the time for health care reform, for a new energy policy, for higher quality schools, for comprehensive immigration reform, I say you are wrong. We cannot afford to postpone solving these problems.”

Scott knows firsthand what it means to address problems directly. After taking the top job in January 2000, Wal-Mart expanded at such a rapid pace that sales at newer stores ate into those at older stores nearby. Wal-Mart also became the target of union-funded groups over the retailer’s pay and health care benefits for employees. And the company also made what turned out to be a disastrous decision in 2006 to try to lure new shoppers by offering high-end fashion clothing advertised in Vogue that turned away many existing shoppers later that holiday season.

But the company took its knocks and responded to the problems. It slowed expansion in the U.S. to focus instead on upgrading existing stores and looking overseas for growth. The company also recommitted itself to offering products its customers wanted at the low prices the retailer was known for, just as the economy entered recession. The results paid off as the company emerged as one of the few winners from the recent dismal holiday shopping season.

And the retailer responded to the public criticism not only by expanding its public relations efforts to get its message out -- turning away from its insular past -- as well as reaching out to critics and implanting changes to its health care policies.  In particular, the company has come to embrace sustainable solutions as a way to further reduce costs, from fuel efficient trucks to stores powered through wind and solar power.

But today’s speech was also directed as much at the incoming administration as it was retailers. The company has been taking aggressive steps to clean up its labor record as a new CEO takes over -- and a new, union-leaning, Democratic president steps into office.  On Christmas Eve, the company announced it would settle 63 lawsuits in 42 states for as much as $352 million involving claims that the company made employees work off the clock.  The total settlement costs could rise to $640 million.  The company still continues to fight one of the largest class actions against gender discrimination in California.

The decision to settle these lawsuits, some several years old, comes just as union leaders hope a Congress they believe more inclined to support unions will approve legislation making it easier for workers to organize. 

But the speech went beyond immediate issues confronting the Wal-Mart and the industry as a whole, even as Scott acknowledged a “fundamental change” occurring in consumer spending.

“There is just as great a need and opportunity -- whether it is health care, diversity, responsible sourcing, immigration or any other,” he said in his prepared remarks.  “Each and every retailer -- each and every business -- can participate and make a difference.”

Perhaps, with his days in the immediate public eye about to subside, Scott, like that other world leader, is feeling perhaps a bit more candid about sharing his thoughts.

“They have told me in my last 12 days not to offend anybody. But I have struggled for 30 years with that.”

January 12, 2009 | Permalink | User Comments (18)

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one of the most evil companies in the world.... at wal-mart hq they sure have loved teh bush years,,and will hate the obama years when we the people get our fair shake again.

Posted by: T | Jan 12, 2009 5:15:14 PM

Hey T - Does that stand for Trotsky? You do realize that Walmart keeps a lot of people afloat, right? That's just pure evil, huh?

Posted by: Greg | Jan 12, 2009 8:24:36 PM

Yes, Wal-Mart keeps a lot of people afloat - with minimum wage jobs selling products made in other countries. They used to push "Made In America" products, but not anymore. They only push the bottom line and don't care where the products are produced, squeezing out as many competitors as they can. I don't think they're evil. I think they're just like a virus.

Posted by: T2 | Jan 12, 2009 10:14:53 PM

It will be interesting to see this next year evolve. I know our nation can not continue they way we are. Millions of people are out of work and/or underemployed, and without real health care. Some workers that have health insurance now it is only "window dressing" for the company they work for. The worker really can not afford to use it. Some workers are not working enough hours to support themselves or their families, they may be working several jobs trying to stay afloat. It will be interesting to see which companies, CEO's,groups, organizations, and the like step up to the plate without being forced to and actually put something behind that "show window."

Posted by: Pati | Jan 12, 2009 10:40:31 PM

For cryin' out loud!! Now people are expecting bigger gov't to save them from WALMART?!

Here's how you bring down Walmart: Don't work there, don't BUY there. But that involves making a friggin decision for yourself.

Every time a community fights against WM and LOSES, and WM builds its newest box, that community flocks in to buy!! How much sense does that make? And this Scott knows people are that weak, why do you think WM sues the hell out of any town that fights against a store being built? He KNOWS that town will fill the parking lot on opening day.

Don't work there, don't buy there. It doesn't get any simpler than that. You're not helpless, you're not trapped, there are plenty of other stores to buy from (and work at). Unions only play ball with corporate and suck your money away for NOTHING.

Posted by: Laughing Cynic | Jan 13, 2009 8:15:34 AM

greg----do you ever watch tv? se how many law suits against wallly world for locking people in forceing them to work overtime for no pay,how many family stores have been forced out by wally world? walmart is flat out evil and they are a shinning example of what is wrong with america. low wages cheap products made in foriegn countries. i dont shop at walmart,evne though i am a working class person,i will only buy america made from american stores.i will buy union whenever i can. i have had it with the rich nazi,s getting richeer and never giving back.

Posted by: T | Jan 13, 2009 9:01:43 AM

T - I'm curious, did you even read the article?

You mention lawsuits that have been settled, the base of which were never proved to be corporate policy, just the policies of a-hole managers that can be found anywhere.

How many family stores have been forced out? I'm sure I don't know and don't care. They proved themselves to not be competitive and failed. If these mom & pop businesses were so great, why did their own customers abandon them? Cry me a river.

You buy union whenever you can? Well that concept is working out great for the auto companies now isn't it? I'm sure you don't begrudge Toyota for selling cares in the US, yet they are driving a domestic uncompetitive industry into the ground (mom & pop?).

You've had it with rich 'Nazi's' getting richer and never giving back. Well how about the jobs that Walmart creates? How about them being a corporate leader in using green tech to power their stores (they have been in close contact with Evan Chinard of Patagonia to make this happen)? How about selling prescription drugs at rock bottom prices so people can afford them, and expanding that program all the time?

Yes I watch TV, I also read and come up with informed opinions. Your contention that Walmart is evil is nothing more than some bland conspiracy theory that is easy for you to swallow and allows you your desire to hate success.

Posted by: Greg | Jan 13, 2009 10:28:22 AM

greg---you are a idiot!! walmart createing jobs huh? oh minimum wage jobs here and alot of jobs in china and india....yes such a pillar of american society...and you evil republicans had your great time rapeing america last 8 years now we will get back to for we the people not just you the rich right wing bible bangers. you republicans are so funnt when it comes to your rightwing religion you want the family and all these great wholesome things but when it comes to business you dont care about mom and pop shops and teh working family. you say minimum wage is a good job i say its slavery. if it doesnt chnage you will see a cival war in this nation.

Posted by: T | Jan 13, 2009 10:45:44 AM

greg----you must be a evil manager or ceo type in walmart you sound like a commercial....every manager of walmart i have evr met is downright nasty digusting human bieng

Posted by: T | Jan 13, 2009 10:48:11 AM

T-well that was a nice little duet of posts!

You called me a lot of names, made wild accusations about my beliefs, and made an erroneous assumption of my livelihood.

You pretty much got it all wrong, at least what I could understand from the atrocious grammar and spelling you left me to decipher.

Can I make a few assumptions about you now?

I'll go with middle school dropout, potential militia member, covered with tattoos, who during the dinner shift can be referred to a 'sandwich artist', and during the day can be referred to as 'baked out of his gourd'.

Posted by: Greg | Jan 13, 2009 10:59:46 AM

T - If you don't shop at Walmart, where are you meeting all of these horrible Walmart managers? Do you work at one of the McDonald's at the front of a Walmart?

Posted by: Greg | Jan 13, 2009 11:14:17 AM

greg--- wrong i own a cleaning company, i employ 6 people and i pay top wages to them all. i give back alot i pay my workers 15 dollars an hour when most cleaning companies pay 8... i get better employees that are happy. its why i am successful

Posted by: T | Jan 13, 2009 11:20:34 AM

Lee was good CEO. I work at Walmart 3 years ago for a 7 year stint. Lee had a tough job and did the best he could. Obama or McCain have nothing on Lee Scott. Lee Scott for President.

Posted by: David | Jan 13, 2009 1:11:16 PM

david----he didnt try to pay good wages and eh sure didnt try to buy american products....and he didnt have any problem with locking in employees and makeing them work for free. wal-mart sucks and is evil. i hope it crumbles and goes out of business.

Posted by: T | Jan 13, 2009 5:00:32 PM

63 lawsuits in 42 states is an awful lot-- "some several years old"... not to mention the suit that Walmart fought tooth-and-nail over and which was settled in court this summer, in which a Minnesota judge found that the company had committed over TWO MILLION VIOLATIONS of labor law... not to mention that the company hounded a brain-damaged former employee through the courts for money she didn't have, relenting only when the story became public.

Why on earth does this article claim that "the retailer responded to the public criticism not only by expanding its public relations efforts to get its message out -- turning away from its insular past -- as well as reaching out to critics and implanting changes to its health care policies"?

It's common knowledge that the average Wal-Mart employee STILL cannot afford the company's premiums, and that employees are STILL managed to just under the full-time threshold, and pushed to rely on public assistance as a matter of company policy.

I'm working with Wake-Up Wal-Mart to shake the world's largest retailer to face its responsibilities-- it ain't there yet! Join us!

www dot wakeupwalmart dot com

Posted by: Jim | Jan 13, 2009 5:09:52 PM

jim----you tellthem wal-mart must be stopped and any company like that. there days are numbered unless they change there ways.

Posted by: T | Jan 13, 2009 5:15:11 PM

How about WakeUpConsumers? Walmart is wide awake and laughing. Consumers are sleepwalking into their stores, chanting "Save money, live better, save money, live better, save money, live better..."

Change their ways? Why should they? They're making billions! One of the few retailers whose revenue INCREASES during this crisis. And they whine about how little that increase was over the holidays.

Don't work there, don't buy there.

Posted by: Laughing Cynic | Jan 13, 2009 6:21:19 PM

i do believe that all businesses need to do their fair share in helping the employees and the economy. my main belief is that companies should share their profits each month with the employees and decrease the hourly wages. this gives the employee to shop around for the most profitable company before they apply for a job.

i work now with a home based business that does this with all its business owners.

Posted by: stephen futado | Jan 23, 2009 5:43:45 PM

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