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The Honolulu Advertiser
Posted on: Saturday, October 29, 2005

Wal-Mart initiatives called 'desperate' ploy

By Anee D'Innocenzio and Marcus Kabel
Associated Press

NEW YORK — Wal-Mart Stores Inc. accelerated its campaign to polish its image by proposing this week a lower-cost healthcare plan for its employees, promising an environmental initiative and calling for a boost in the minimum wage.

But the world's largest retailer is finding that by trying to please everyone — the public, politicians, shareholders and Wall Street — it may be pleasing no one.

The $285 billion company has come under criticism in recent years for the way it treats its workers, its performance on diversity in the workplace and its environmental record.

Critics complain that the recent initiatives are merely publicity stunts. The company also seems to have lost some of its competitive edge, and a lackluster economy and high gasoline prices have hurt sales and profits.

Wal-Mart's stock price has dropped 17 percent this year. And now a scathing documentary, to be released nationally next month, will target the retailer.

Wal-Mart's opponents call its new healthcare plan inadequate because workers would still have a $1,000 deductible. And critics term the company's advocacy of a higher minimum wage as a self-serving attempt to boost the buying power of its low-income customers.

"This is a desperate attempt to remake their faltering image," said Chris Kofinis, spokesman at Washington-based Wake Up Wal-Mart, one of Wal-Mart's harshest critics.

Opponents say Wal-Mart's pay and benefits drive down those at companies trying to compete.

In fact, an internal memo — obtained by Washington-based Wal-Mart Watch and appearing in the New York Times — appeared to undercut Wal-Mart's charm offensive. (Wal-Mart provided a copy to The Associated Press after it learned the New York Times was planning a story.) The memo, written by a company benefits executive to the board, suggested ways to cut soaring medical costs by hiring more part-time workers and discouraging unhealthy job applicants by including physical activity in all jobs.

"Wal-Mart is continuing to mature as a company, and this requires us to think about our business in a new way," Wal-Mart spokeswoman Mona Williams said. "Many of the issues we have dealt with from a defensive posture are now seen as an opportunity to embrace proactively and become a more innovative and competitive company as a result."