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September 07, 2005


Credit where it's due, Wal-Mart's done a damn good job on hurricane relief:

Wal-Mart's response to Katrina -- an unrivaled $20 million in cash donations, 1,500 truckloads of free merchandise, food for 100,000 meals and the promise of a job for every one of its displaced workers -- has turned the chain into an unexpected lifeline for much of the Southeast and earned it near-universal praise at a time when the company is struggling to burnish its image.

When it comes to Wal-Mart, I'm a cynic. But even if this was a play for positive headlines and media praise, it's still $20 million for relief, trucks packed with essentials, food, and jobs. Indeed, take a look at their preparations compared to FEMA's poor handling of the situation:

In Brookhaven, Miss., for example, where Wal-Mart operates a vast distribution center, the company had 45 trucks full of goods loaded and ready for delivery before Katrina made landfall. To keep operating near capacity, Wal-Mart secured a special line at a nearby gas station to ensure that its employees could make it to work.

I'm always struck by the irony of the "first CEO president" turning a markedly efficient federal government into an incompetently run, poorly led, and completely unprepared sluggard. A CEO, presumably, would know to appoint qualified individuals to head important agencies, they would know to fund the aspects of the company that guard against disaster, they would know to not overextend the corporation's resources while simultaneously cutting its revenues. Under Clinton, government shrank, revenues raised, the budget was balanced, and federal agencies became more responsive. Bush, through his aggressive incompetence, has made the organization he runs look totally pathetic compared to other large entities. Harvard Business School must be so proud.

September 7, 2005 in Big Business | Permalink


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They're just taking care of their best customers: the otherwise poor and destitute.

That's a little heavy handed but it's basically true. On the other hand, their whole corporate culture is centered around people who don't spend much because they don't have much, and so it's not exactly offensive to point out that their efforts to provide relief for deep Southerners are also efforts to bail out the people that make them rich. Still, go Wal-Mart. It don't get no cheaper 'n free.

Posted by: diddy | Sep 7, 2005 2:59:20 PM

Hey Ezra,

For you to be amazed at the MBA President handling the government so poorly shows you've never really worked in a corporate environment. Bush's handling of the Federal Government is very similar to how MBAs have handled all the companies I've worked for. None of these snots can make a decent decision beyond how to bilk investors out of money and how to construct a golden parachute when things go wrong.

MBAs, feh.

Posted by: TonyDogs | Sep 7, 2005 3:34:59 PM

Actually, the $20 million number is in a lot of contention. For one thing, the number includes all the donation boxes Wal-Mart set up in their stores asking for donations from their customers, which they then passed off as "theirs." Much of the $20 million did not come straight from the Wal-Mart corporate account; it came from middle and lower-class working Americans.

In addition, the personal donation from the Waltons of about $6 million is roughly .007% of their net worth. Comparitive to an American making around $45,000 a year, the Walton family "generously" donated the equivalent of about seven bucks to the relief effort.

Posted by: August J. Pollak | Sep 7, 2005 4:37:35 PM

TonyDogs, that's exactly what I was thinking. What drove that home was when I realized that Bush was recruiting people to run FEMA not from those who were expierenced in managing disaster relief, but rather those loyal cronies who also happened to be from the "management class." That's the way many MBAs and Bush specifically operate-- "there are those who are of the leadership class, and they can lead anyone, regardless of their other qualifications." Thus, a Pepsi executive was tapped to run apple in the 1980s, and a Horse Lawyer was appointed to run FEMA.

Posted by: Constantine | Sep 7, 2005 4:39:41 PM

I'm also concerned that this could be used to fuel the antistatist narrative that Rob Farley wrote about. The Parish President Broussard on Meet the Press said that we'd all be better off if Wal-Mart were running the disaster relief.

Seriousaly. Wal-Mart is going to start having wedding chapels. The goal will be to have corporations fulfill all public functions (and in this context I'll count a wedding in a church as a public event, because it occurs before a community).

Posted by: Bostoniangirl | Sep 7, 2005 5:00:12 PM

The UFCW deserves some credit here. To some extent, at least, WalMart is responding to the push for social responsibility. Andy Grossman et al have been making almost as big a push on WalMart for general social responsibility than for letting its workers unionize (probably because it's an easier fight under current US labour law). Would they have been as diligent in responding to the hurrican victims without the campaign against them and the need to burnish their image? Maybe, but I'm not sure.

Posted by: tlaura | Sep 7, 2005 5:44:43 PM

In defense of MBAs - I work with a bunch of smart, talented ones, and I think consultancies and marketing firms cream off much of the best of the bunch - it's not like Bush ever wound up at a McKinsey (like, um, a certain first daughter) or a Deloitte. I've worked for good CEOs and bad CEOs and Bush has long been a model bad CEO at least to me. I think that's a rep that may stick to him after the disastrous response to Katrina.

Posted by: weboy | Sep 7, 2005 7:26:26 PM

I wish Bush truly was a CEO. At least real CEO's can be prosecuted for criminal negligence and malfeasance and defrauding the shareholders.

And better yet when the board of directors gets in the way they can be prosecuted for obstruction of justice.

Posted by: paul | Sep 8, 2005 10:03:52 AM

I wish Bush truly was a CEO. At least real CEO's can be prosecuted for criminal negligence and malfeasance and defrauding the shareholders.

And better yet when the board of directors gets in the way they can be prosecuted for obstruction of justice.

Dude, that would be nice, but in a much more frequent scenario the B.O.D. votes the CEO a lavish retirement package and then returns to the club where they gut kittens for amusement...

Posted by: TJ | Sep 8, 2005 2:51:19 PM

NPR reported a couple of days ago on what different corporations are doing for their workers in MS and LA whose jobs/workplaces have been obliterated. Some companies like Grumman are being quite generous, extending people's salaries for 90 days or even longer.

Wal-Mart, by contrast, is giving its displaced employees 3 days pay. (It does claim to be trying to find jobs for people in other Wal-Marts across the country.)

Posted by: dix hill | Sep 8, 2005 2:56:42 PM

Dix, that's slightly inaccurate as far as Wal-Mart goes. I work at the Wal-Mart corporate headquarters and I've been volunteering at the emergency call center. Displaced employees are eligible for sizable emergency funds, and employees of any store AT ALL affected (as in, it closed for 2 days and then opened up again) got additional hurricane pay on their paychecks last pay period. Displaced associates received that as well, but even if a store was only closed for one day, associates were still given hurricane pay on their paychecks. "Displaced" associates CAN, by Wal-Mart policy, walk into *any* Wal-Mart or Sams across the country and get a job there. That IS policy, and if any manager is not complying with that policy, I'm sure that they will have it clarified for them soon.

I'm not too thrilled about Wal-Mart as a general rule, but this has given me a sense of pride that I work for a company that will come through like this when it's needed. This next month or so will probably be the only time I really feel proud to work for this company, but I'm glad that they're stepping up to help people like they are.

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