October 17, 2008
Walmart Canada Closes Unionized Auto Garage
Walmart is so convinced it cannot compete in the market with a unionized workforce, the company announced it will close a Tire and Lube Express in Quebec rather than operate the facility and put its theory to the test.
Five mechanics at the store in Gatineau, Que., represented by the United Food and Commercial Workers (UFCW) union, were going to see their wages increase as a result of a contract imposed on the chain by an arbitrator in the province.
Walmart Canada spokesman Andrew Pelletier told The Associated Press that the labor contract imposed on the chain by an arbitrator in Quebec would “require us to increase consumer prices by more than 30 percent.”
Wayne Hanley, president of UFCW Canada, said Walmart’s action proves it “thinks a cheap oil change is more important than the Canadian constitution.”
“For Walmart to say its employees are free to unionize, but then declare that a contract produced through mediation just doesn’t work for their business model, means as far as Walmart is concerned, the rights of its American shareholders are more important than the human rights of its workers in Canada,” Mr. Hanley added.
Walmart’s decision, The Canadian Press reported, is the second time the retailer has chosen to close a business where workers had agreed to union representation. Walmart closed a store in Saguenay claiming it was unprofitable. Canada’s Supreme Court has agreed to hear a case brought by former workers against Walmart in the case.
Discussion Questions: Does having a unionized workforce, generally speaking, provide retailers with a competitive advantage or disadvantage? Do you think Walmart’s decisions to close its unionized businesses have been wise moves?
BrainTrust
Recent Discussions
Discussion Questions
Poll
I was rather surprised by the tepid responses here (even David’s 2 [!] posts–though as astute as ever–lacked the vinegar I’ve come to love.)
As for the question itself, it seems the stereotypical “no-brainer”: unless a management is so inept that it needs to be saved from itself (and hence not likely to survive anyway) every additional restriction (e.g. a union) is a detriment; but the more interesting (and important) question is at the macro level: is an economy that is unionized better or worse than one which is not?
Walmart has obviously been successful being non-union. So I’m not going to second guess their decision. Why would any retailer want an added layer of bureaucracy skimming dues from their labor force and interfering with labor relations? If unions were so good then retailers would not be trying so hard to keep them out. Seems to me the fastest growing retailers right now are all non-union. Unions seem to get in the way of growth rather than help and encourage it.
The Unites States doesn’t negotiate with terrorists, and Walmart doesn’t negotiate with Unions (don’t shoot me yet, I’m not saying that Unions are terrorists).
My point is that Walmart has been successful with their no union position and continues to believe that their model is correct. The joy of the free market economy is that they have the right to close a store if they believe it’s in their best interest.
It is very easy for a company the size of Walmart to close a small location like this in order to make a strong statement to the union. But, if the election polls are correct, Walmart had better start thinking about how they can make their business in the U.S. work as a union operation. If Barack Obama wins and the Democrats keep or expand their majority in the Congress, it is assured that the laws concerning union organizing in this country will change, and quickly. Obama has promised to implement the biggest change in this area within months of being elected. All a union will have to do is get 51% of the employees to sign a card saying they want a union and it’s done. No private election or anything, it’s a done deal. And Walmart will be their first target. And next, they will repeal the right to work laws so you have to belong to a union in order to have a job. It won’t be pretty. With a Democratic President and Congress there will be no stopping it.
Anyone who has done business in the Province of Quebec knows that almost all industries there are unionized beyond belief. This story is just another example (and one of a few reasons) the Canadian Consumer will continue to have less buying power for a relatively strong Dollar. Of course this is my American mindset speaking so if a unionization model works for them, why buck the trend? Canadian Tire is usually going to have an outpost in the immediate area of any Walmart so I doubt this is any real loss.
Walmart is Walmart and they seem to live by the values that Sam Walton created. They are still able to open a store anywhere in the US, and I’ll bet also in most parts of Canada, and get thousands of people to apply.
I keep hearing how bad Walmart is as an employer but they still have less than 60% turnover for both full and part time workers. Not bad figures for a retailer.
One thing we must keep in mind is that Walmart’s North American labor model does not include the hiring of “Costco” quality employees. Walmart typically focuses their hiring on the less than ordinary worker. Therefore it would be insane to pay them the higher union level wages found at other retailers. That would be unfair to the shareholders who have risked their money hoping that Walmart would be good stewards of their investment.
Perhaps over time, Walmart may have to change its labor model to include more productive and qualified employees, therefore raising its wages. The day you see Walmart employees running around like bees in hive, like you see at Publix, Aldi, or Hy-Vee, is the day you see Walmart raising wages. Obviously if Walmart’s employees had greater wage value they would be working for someone else. And if being in a union was that important to them, they would simply change employers and join a union shop.
I’m a union member and grocery clerk. When it’s said that Walmart has been successful as non-union, that means to me that executives and shareholders have been successful and employees have not been successful.
Employees deserve a fair share of profits and the only way we can get that with many companies (especially Walmart) is through collective bargaining. After all, we are in business too. The business of trading our labor for adequate compensation so we can support ourselves and our families. The trick is finding the right balance between labor and management on the issues of terms and conditions of employment.
I work for a profitable company that is neutral in union organizing campaigns, acknowledges our union’s role, deals with our union representatives in a fair and reasonable manner and honors its agreements.
The days of The Union are gone. We are too progressive, too competitive and too global to need unions. Work that cannot be easily done in-country, and cheaply done, just gets moved offshore. This decreases in-country spending and the value of the product overall. This can be seen in every unionized shop in America. Their jobs are rapidly moving overseas as the manufacturer seeks to compete in a global environment. Closing this garage was the right thing for Walmart to do. They are a global competitor with demanding consumers who only want the lowest prices.
This move should not surprise anyone familiar with Walmart’s anti-union movement in the US. A few years ago, employees of the meat department at the Walmart in the east Texas town of Jacksonville voted to unionize through the UFCW. Walmart promptly responded by not only doing away with meat cutters in that store, but chain-wide, which left customers with only pre-packaged, DC-originated cuts of meat from which to choose. If you want to talk to a butcher about a custom cut of meat, you have to go to another store for that–just because Walmart doesn’t want unionized employees.
According to the CNBC documentary, “The Age of Wal-Mart,” Sam would make sure his employees would receive company stock, as well as their regular wages. I haven’t heard much in the years since about anyone there getting that benefit.
If everyone working at Walmart was so happy about it, why do we still hear about attempts at unionization there?
In every company I’ve worked at, unionized workers have been a hindrance for the company. Wages are high, performance mediocre and work effort lacking.
It was always a laugh for myself and other office folk to go down to the warehouse to check orders and shipments…wanting to make sure they got out the door before the day is done.
Oops. It’s 4:30 pm. Aside from the supervisor (I don’t think he was part of the union), everyone else is packing up and going home. Lots of orders haven’t been loaded and shipped out yet, though they were supposed to be.
Or how about another time, when the warehouse was jammed with work and orders needed to go out. The office folk wanted to pitch in and help out with picking orders, wrapping skids or doing any time consuming jobs, freeing up the warehouse guys to ship and forklift. Nope. Hands-off. Only union guys can do it.
Work is work. Who says anyone should just leave at an exact time? Sometimes I work till 5 pm. Sometimes 6 pm. Sometimes 5:30 pm. I would love to just drop everything and make a bee-line to the exit at 4:30.
So much for team work.
Some critical orders need filling, deadlines are tight and monthly sales need to be achieved. Well, the union guys will stick around and do it only if paid time and a half or double time on weekends/holidays. At least the supervisor always stuck around. He even did stuff by himself if needed.
Work effort pays off. The Supervisor actually retired one day (he was in his 60s), but they asked him back for help as the place fell apart without him. For any shippers that left, none of them were asked back.
Back on topic: Walmart did the right thing. Lots of other jobs and companies out there. No need to force yourself to work at Walmart.
Walmart needs to frighten its employees: join and union and your job is gone. The unions don’t apply any reasonable strategy to organizing Walmart, so the fright tactics work well.
And Walmart’s unionized competitors (supermarkets) aren’t enlightened enough to band together to fight a common enemy. What would happen if a union supermarket contract gave everyone within 20 miles of a unionized Walmart an automatic immediate 20% raise? Bet those folks would be out organizing every week. What would happen if multiple Walmart locations in one area were unionized and didn’t demand a contract until the day before Thanksgiving? And then immediately walked out if the contract wasn’t signed on the spot? What would happen if Teamsters were offered automatic 20% raises to organize Walmart drivers and warehouse workers?
What would happen if the unions started picketing Walmart board members’ homes and offices? American labor unions did more to discourage investment in apartheid-era South Africa than they’ve done to discourage investment in Walmart.
More Discussions
As Boomers ‘Age Out of Peak Purchasing,’ How Can National Brands Retain Interest With Gen Z?
According to a recent First Insight study titled “Is Gen Z Still Choosing Your Brand,” while…Is Supply Chain Volatility Here To Stay?
Can we expect an ongoing volatility to remain in terms of retail supply chain?Has Same-Day Delivery Become an Expectation Across Retail?
Are expectations around retail delivery speed in flux?
I was rather surprised by the tepid responses here (even David’s 2 [!] posts–though as astute as ever–lacked the vinegar I’ve come to love.)
As for the question itself, it seems the stereotypical “no-brainer”: unless a management is so inept that it needs to be saved from itself (and hence not likely to survive anyway) every additional restriction (e.g. a union) is a detriment; but the more interesting (and important) question is at the macro level: is an economy that is unionized better or worse than one which is not?
Walmart has obviously been successful being non-union. So I’m not going to second guess their decision. Why would any retailer want an added layer of bureaucracy skimming dues from their labor force and interfering with labor relations? If unions were so good then retailers would not be trying so hard to keep them out. Seems to me the fastest growing retailers right now are all non-union. Unions seem to get in the way of growth rather than help and encourage it.
The Unites States doesn’t negotiate with terrorists, and Walmart doesn’t negotiate with Unions (don’t shoot me yet, I’m not saying that Unions are terrorists).
My point is that Walmart has been successful with their no union position and continues to believe that their model is correct. The joy of the free market economy is that they have the right to close a store if they believe it’s in their best interest.
It is very easy for a company the size of Walmart to close a small location like this in order to make a strong statement to the union. But, if the election polls are correct, Walmart had better start thinking about how they can make their business in the U.S. work as a union operation. If Barack Obama wins and the Democrats keep or expand their majority in the Congress, it is assured that the laws concerning union organizing in this country will change, and quickly. Obama has promised to implement the biggest change in this area within months of being elected. All a union will have to do is get 51% of the employees to sign a card saying they want a union and it’s done. No private election or anything, it’s a done deal. And Walmart will be their first target. And next, they will repeal the right to work laws so you have to belong to a union in order to have a job. It won’t be pretty. With a Democratic President and Congress there will be no stopping it.
Anyone who has done business in the Province of Quebec knows that almost all industries there are unionized beyond belief. This story is just another example (and one of a few reasons) the Canadian Consumer will continue to have less buying power for a relatively strong Dollar. Of course this is my American mindset speaking so if a unionization model works for them, why buck the trend? Canadian Tire is usually going to have an outpost in the immediate area of any Walmart so I doubt this is any real loss.
Walmart is Walmart and they seem to live by the values that Sam Walton created. They are still able to open a store anywhere in the US, and I’ll bet also in most parts of Canada, and get thousands of people to apply.
I keep hearing how bad Walmart is as an employer but they still have less than 60% turnover for both full and part time workers. Not bad figures for a retailer.
One thing we must keep in mind is that Walmart’s North American labor model does not include the hiring of “Costco” quality employees. Walmart typically focuses their hiring on the less than ordinary worker. Therefore it would be insane to pay them the higher union level wages found at other retailers. That would be unfair to the shareholders who have risked their money hoping that Walmart would be good stewards of their investment.
Perhaps over time, Walmart may have to change its labor model to include more productive and qualified employees, therefore raising its wages. The day you see Walmart employees running around like bees in hive, like you see at Publix, Aldi, or Hy-Vee, is the day you see Walmart raising wages. Obviously if Walmart’s employees had greater wage value they would be working for someone else. And if being in a union was that important to them, they would simply change employers and join a union shop.
I’m a union member and grocery clerk. When it’s said that Walmart has been successful as non-union, that means to me that executives and shareholders have been successful and employees have not been successful.
Employees deserve a fair share of profits and the only way we can get that with many companies (especially Walmart) is through collective bargaining. After all, we are in business too. The business of trading our labor for adequate compensation so we can support ourselves and our families. The trick is finding the right balance between labor and management on the issues of terms and conditions of employment.
I work for a profitable company that is neutral in union organizing campaigns, acknowledges our union’s role, deals with our union representatives in a fair and reasonable manner and honors its agreements.
The days of The Union are gone. We are too progressive, too competitive and too global to need unions. Work that cannot be easily done in-country, and cheaply done, just gets moved offshore. This decreases in-country spending and the value of the product overall. This can be seen in every unionized shop in America. Their jobs are rapidly moving overseas as the manufacturer seeks to compete in a global environment. Closing this garage was the right thing for Walmart to do. They are a global competitor with demanding consumers who only want the lowest prices.
This move should not surprise anyone familiar with Walmart’s anti-union movement in the US. A few years ago, employees of the meat department at the Walmart in the east Texas town of Jacksonville voted to unionize through the UFCW. Walmart promptly responded by not only doing away with meat cutters in that store, but chain-wide, which left customers with only pre-packaged, DC-originated cuts of meat from which to choose. If you want to talk to a butcher about a custom cut of meat, you have to go to another store for that–just because Walmart doesn’t want unionized employees.
According to the CNBC documentary, “The Age of Wal-Mart,” Sam would make sure his employees would receive company stock, as well as their regular wages. I haven’t heard much in the years since about anyone there getting that benefit.
If everyone working at Walmart was so happy about it, why do we still hear about attempts at unionization there?
In every company I’ve worked at, unionized workers have been a hindrance for the company. Wages are high, performance mediocre and work effort lacking.
It was always a laugh for myself and other office folk to go down to the warehouse to check orders and shipments…wanting to make sure they got out the door before the day is done.
Oops. It’s 4:30 pm. Aside from the supervisor (I don’t think he was part of the union), everyone else is packing up and going home. Lots of orders haven’t been loaded and shipped out yet, though they were supposed to be.
Or how about another time, when the warehouse was jammed with work and orders needed to go out. The office folk wanted to pitch in and help out with picking orders, wrapping skids or doing any time consuming jobs, freeing up the warehouse guys to ship and forklift. Nope. Hands-off. Only union guys can do it.
Work is work. Who says anyone should just leave at an exact time? Sometimes I work till 5 pm. Sometimes 6 pm. Sometimes 5:30 pm. I would love to just drop everything and make a bee-line to the exit at 4:30.
So much for team work.
Some critical orders need filling, deadlines are tight and monthly sales need to be achieved. Well, the union guys will stick around and do it only if paid time and a half or double time on weekends/holidays. At least the supervisor always stuck around. He even did stuff by himself if needed.
Work effort pays off. The Supervisor actually retired one day (he was in his 60s), but they asked him back for help as the place fell apart without him. For any shippers that left, none of them were asked back.
Back on topic: Walmart did the right thing. Lots of other jobs and companies out there. No need to force yourself to work at Walmart.
Walmart needs to frighten its employees: join and union and your job is gone. The unions don’t apply any reasonable strategy to organizing Walmart, so the fright tactics work well.
And Walmart’s unionized competitors (supermarkets) aren’t enlightened enough to band together to fight a common enemy. What would happen if a union supermarket contract gave everyone within 20 miles of a unionized Walmart an automatic immediate 20% raise? Bet those folks would be out organizing every week. What would happen if multiple Walmart locations in one area were unionized and didn’t demand a contract until the day before Thanksgiving? And then immediately walked out if the contract wasn’t signed on the spot? What would happen if Teamsters were offered automatic 20% raises to organize Walmart drivers and warehouse workers?
What would happen if the unions started picketing Walmart board members’ homes and offices? American labor unions did more to discourage investment in apartheid-era South Africa than they’ve done to discourage investment in Walmart.