On Wednesday, we asked why WalMart [10] simultaneously closed multiple geographically distinct stores across the US for “plumbing issues.” We began by noting that the company — the largest retailer in the world — raised wages across the board just two months ago. Here’s an excerpt from the letter sent to employees by President and CEO Doug McMillon:
For our current associates, we’ll start by raising our entry wage to at least $9 an hour in April, and, by February of next year, all current associates will earn at least $10 an hour. I’m also excited about an innovative program we’re launching for future associates that will allow you to join Walmart at $9 an hour or more next year, receive skills-based training for six months, and then be guaranteed at least $10 an hour upon successful completion of that program. We’re also strengthening our department manager roles and will raise the starting wage for some of these positions to at least $13 an hour this summer and at least $15 an hour early next year. There will be no better place in retail to learn, grow, and build a career than Walmart.
We went on to point out that there is no free lunch especially when you operate on razor thin margins in order to retain the “low price leader” crown and so someone has to pay for all those extra pennies the company is now paying out to its employees and because passing along the costs to customers is a no-go, the supply chain has to foot the bill, and because of WalMart’s size, vendors have no choice but to cooperate. WalMart is legendary for its supply chain management, but as WSJ notes [11], the company is finding it more difficult to maintain its competitive advantage and must figure out how to retain its leadership position in the market all while striking a conciliatory tone on wages:
Wal-Mart has long had a reputation for pressing its suppliers to cut costs to help lower prices, but the retailer’s new leadership has embraced the concept with fresh vigor. Wal-Mart’s price advantage against its competitors has been eroded, and it has steadily been losing market share in the U.S. since the recession ended, while rivals including KrogerCo. and Costco Wholesale Corp. gained share, according to data from the consultancy Kantar Retail.
With the growth of dollar stores and other discounters, Wal-Mart is facing ever more competition on price, which for many customers is the most important selling point.
It’s against this backdrop that the company recently began closing stores and laying off thousands of employees citing “ongoing plumbing issues that will require extensive repairs.” Once we discovered that no plumbing permits had been filed and that seemingly none of the affected workers could offer even a shred of anecdotal evidence as to the existence of the “clogs and leaks” WalMart officials claimed were at the heart of the problem, we suggested that perhaps — just perhaps — something else might be behind the store closures such as the company’s desire to cut costs in a tough economic and competitive environment. Here’s a list of the affected stores:
1620 W. Church St. Livingston, TX
4517 N Midland Dr. Midland, TX
207 S. Memorial Dr. Tulsa, OK
8500 Washington Blvd. Pico Rivera, CA
1208 E. Brandon Blvd. Tampa, FL
When we began to look into each of these locations we came across something rather interesting involving the Pico Rivera, CA store. As it turns out, it’s been the site of wage and working condition protests on a number of occasions, the most recent of which was less than six months ago. Here’s more via local news footage:
Protesters chant "we are proud of you as police arrests 4th person." pic.twitter.com/p33uwVsYtW [12]
— Making Change @ WMT (@ChangeWalmart) November 14, 2014 [13]
Almost exactly one year earlier, the Pico Rivera store was (along with multiple other locations across the US) the site of protests alleging that the company did not pay enough to keep many of its workers from seeking government assistance to supplement their meager wages (recall that 73% of those receiving public assistance [14] in the US come from working families). Here was the scene at Pico Rivera in November of 2013:
And just a little over a year before the 2013 Black Friday protests, more than 200 workers at Pico Rivera went on strike and protested in front of the store waving signs that read “On Strike for the Freedom to Speak Out,” suggesting the company was retaliating against those who fought for better wages and working conditions.
Here’s what The NY Times had to say [15] at the time of the October 14, 2012 walkout:
Several dozen Walmart workers in Southern California staged a one-day strike on Thursday, according to workers and union officials, a move that culminated in a rally of some 250 workers and supporters in front of a Walmart store in Pico Rivera.
The strikers, who union officials said came from nine Walmarts in the Los Angeles area, said they were mainly protesting what they said was management’s frequent retaliation against employees who spoke up about working conditions.
Several of the workers, who said this was the first-ever strike against Walmart in the United States, also said they were protesting low wages and short hours.
Manuela Rosales, 25, who works in the cellphone department of the Pico Rivera store, said she walked out on Thursday, missing her afternoon shift, because “when we speak out, they cut my hours in retaliation and they have me pull pallets, which is very hard work.” She added, “I’m a single mom and I can’t afford them cutting my hours.”
Then, one month later in November of 2012, the same workers planned a similar demonstration against what some called “degrading” circumstances. Here’s a [16] visual from that event:
Given the history at the Pico Rivera location, one could be forgiven for suggesting the store closure could very well have more to do with employees’ views on wages, working conditions, and retaliation than it does with “clogs, leaks, and plumbing issues.”
What's especially interesting here is that one of the groups which has consistently backed protests at the Pico Rivera store is the The United Food and Commercial Workers International Union or, UFCW. The group posted the following video to its website during the 2014 "Pico Rivera Sit Down Strike":
Broadcast live streaming video on Ustream [17]
The UFCW has a history with the company. Back in 2004, when workers at the Jonquiere, Quebec location voted to join the organization, WalMart closed the store six months later noting [18] that "you can’t take a store that is a struggling store anyway and add a bunch of people and a bunch of work rules." This case ended up before the Supreme Court in Canada and just last year, the high court ruled against the company (the full decision is embeded below). Here's more on that via ThinkProgress [19]:
In September of 2004, the United Food and Commercial Workers Union (UFCW) was certified as a representative of employees in a store in Jonquiere, Quebec. In April 2005, just before an arbitrator was about to impose a collective agreement, Walmart closed the store.
On Friday, the Supreme Court of Canada ruled that Walmart violated Quebec’s labor laws in doing so. It found that the company closed the store during a freeze period codified in the law, which limits a business’s ability to change working conditions from the time that employees file to unionize to when they have a contract, go on strike, or are locked out. The court ruled that Walmart ran afoul of this law without a valid reason for closing the store, which never re-opened.
The company has said it didn’t close the store because workers joined a union. In an email to the AP a Walmart spokesperson said, “We are disappointed by the decision.”
An arbiter will now determine remedies for the 190 fired employees, including possible payment for damages and interest.
So here is a WalMart location which has staged protests each and every year dating back to at least 2012, the latest of which led to two dozen arrests and these protests are backed by the same organization which was involved in a Canadian Supreme Court case against the company for closing a store where workers had agreed to adopt the UFCW as their representative. While there may or may not be any connection to all of this and the Pico Rivera location's "plumbing issues," we would note that several people are beginning to draw a parallel. One manager at the store told a local CBS affiliate the following on Thursday:
Venanzi Luna was one of 530 employees told Monday that the store is closing for six months to fix plumbing issues.
Luna has worked as a deli manager at the store for seven years getting paid $14 an hour. She explains that she was slated to get a raise in June.
Luna says that as a member with the Organization United for Respect at Walmart, a group funded by the Food Workers Union, she has led strikes and sit-ins.
Pico Rivera has been a hotbed for worker activism as protests took place there for higher wages. Luna wonders if Walmart was targeting the workers who spoke out.
“This is the first store that went on strike. This is the first store in demanding changes for Walmart,” she said. “I can’t speculate on Walmart’s motives,” City Manager Rene Bobadilla said. “What we were told that it was a sewer issue.”
Yes, a sewer issue at WalMart, which is something one would think WalMart plumbing technician Codi Bauer would know something about. This is what he told [20] a local reporter in Florida:
"Even if they had to replace the whole sewer line, it wouldn't take six months to replace a whole sewer line in that store.”
So that is the short history of the Pico Rivera WalMart location where hundreds of employees were laid off as part of the company's mysterious nationwide "plumbing" problem. We again leave it for readers to decide whether WalMart — in an attempt to kill two birds with one stone by eliminating a "problem" store while simultaneously giving an incremental boost to a nationwide cost cutting effort —created a problem which didn't really exist as an excuse to shut the doors, or whether somewhere, deep beneath the now empty California location, the pipes are truly clogged up and leaking.
Pico Rivera has not received any building repair permit requests from the company.
***Update
Then, just this afternoon, this comes across the wires (Via Reuters [21]):
Wal-Mart Stores Inc, the world's largest retailer, is cutting the role of zone manager from its stores as part of efforts to simplify its operations, Bloomberg reported, citing people familiar with the matter.
The duties of zone manager, of which there are generally about six per store, will be transferred to other managers, Bloomberg said.
Expect more "plumbing."
* * *
Full WalMart/ UFCW decision:
WalMart UFCW [22]