Wal-Mart: Monster or a Model of Integrity?

Sunday, December 28, 2003
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An interesting look at Wal-Mart:

Steve Dobbins has been bearing the brunt of that switch. He’s president and CEO of Carolina Mills, a 75-year-old North Carolina company that supplies thread, yarn, and textile finishing to apparel makers–half of which supply Wal-Mart. Carolina Mills grew steadily until 2000. But in the past three years, as its customers have gone either overseas or out of business, it has shrunk from 17 factories to 7, and from 2,600 employees to 1,200. Dobbins’s customers have begun to face imported clothing sold so cheaply to Wal-Mart that they could not compete even if they paid their workers nothing.

“People ask, ‘How can it be bad for things to come into the U.S. cheaply? How can it be bad to have a bargain at Wal-Mart?’ Sure, it’s held inflation down, and it’s great to have bargains,” says Dobbins. “But you can’t buy anything if you’re not employed. We are shopping ourselves out of jobs.”

This is a decent, partially objective piece on Wal-Mart, but nowhere do these types ever mention the false premises under which the “boom times” are made, though they blame Wal-Mart for killing off its suppliers. In reality, many of the suppliers that Wal-Mart did business with – Levi’s and Vlasic, for instance – were in huge financial trouble long before their pacts with the giant retailer. They rode the high tide of the Fed-created boom times, then they fell down hard when reality blanketed their worlds. Nor do Wal-Mart critics ever mention that small to medium-size businesses are regulated right out of business by government (not run out of town by Wal-Mart), via the massive costs imposed on them.

Considering all the anti-Wal-Martism that runs amok these days, at least the author – Charles Fishman – dares to mention that Wal-Mart survives and grows because it is efficient, lean, and focused. Wal-Mart management makes its suppliers tighten up their ships in order to stay on the Wal-Mart supplier brigade. It does not tolerate bad business or failures from the companies that wish to keep doing business with it. And Fishman also dares to mention the integrity that comes down from the top:

all those interviewed credit Wal-Mart with a fundamental integrity in its dealings that’s unusual in the world of consumer goods, retailing, and groceries. Wal-Mart does not cheat suppliers, it keeps its word, it pays its bills briskly. “They are tough people but very honest; they treat you honestly,” says Peter Campanella, who ran the business that sold Corning kitchenware products, both at Corning and then at World Kitchen. “It was a joke to do business with most of their competitors. A fiasco.”

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