You knew it would happen. When a company as controversial as Wal-Mart (NYSE: WMT) has one of its employees killed in a Black Friday melee, it's only a matter of time before the company starts getting the blame.
Long Island police and a lawyer hired by the deceased worker's family have concluded that the company should have had better crowd control.
"Hundreds of stores around the country have these kinds of sales, but a tragedy only happens if you don't prepare," attorney Jordan Hecht told (subscription required) The Wall Street Journal. "You need to have people line up in a queue in an orderly fashion, with people giving them updates."
Wal-Mart defended itself by saying that it had set up barricades, hired third-party security guards and had extra staff on hand.
And what of the police's contention that the security was inadequate? It turns out that the police were called to the store before the victim was trampled to death because of the large crowds, but they quickly left before the doors opened. (Read more about that in this Newsdaystory.) So the police seemed to think everything was fine at the time but are now blaming inadequate security after the fact. I'm not sure that makes sense.
The real blame here falls on the people who trampled someone to death. The victim's family should sue Wal-Mart for whatever they can get, but it's pretty tacky for the police to be blaming Wal-Mart for a tragedy that happened after they left.
Mexico's Supreme Court has ruled that Wal-Mart de Mexico, also known as Walmex, violated the country's constitution by paying workers, in part, in vouchers only redeemable at the store. Walmex is a wholly-owned subsidiary of Wal-Mart Stores Inc. (NYSE: WMT).
That's right: Wal-Mart was trying to pay its workers with gift cards. That sounds bad but it's really not quite as messed up as it seems. The Wall Street Journal reports (subscription required) that "the retailer said the program was voluntary, and designed to help our employees acquire basic necessities." It went on to explain in the statement that under the program, "Walmex would put store credit on electronic cards and the employees could contribute a matching amount."
Here's what I don't understand: if the company wants to offer employees the option of being paid with store credit -- and employees want to take advantage of the offer -- whose rights are being violated?
The reality is that Wal-Mart offers compelling values on household items and, for many low-income workers, the chance to receive a portion of earnings in store credit would be a good opportunity. If it isn't, they don't have to take it!
I'm not sure why the courts needed to get involved here.
This story may sound quite strange to some people, as the perks at the Google campus have been known to be among the best in the industry, if not the best. But the blogosphere was abuzz after Valleywag reported on Sunday that Google Inc. (NASDAQ: GOOG) will be taking dinners off the menu. Not just that, but while breakfast and lunch will remain free, the rumor had it that there would also be "No more tea trolley. No more snack attack in the afternoon."
The initial reaction to this may be, really, this is what they're whining about? Don't they know many Americans would love to trade with them and "worry" about such things instead of worrying about paying their mortgage or losing their jobs? Why concentrate on a story of "less riches"?
Well, one possible reason this has grabbed the attention of many after all is because of the scary signal it may give. Could this be a sign that the economic hardship has reached even tech darling Google? Are there no safe havens? And with recent concern that the dollar rally could hurt Google's result, the 'no dinner' story has indeed been blown out of proportion.
Over the past year, automakers have struggled to deal with the tough economic conditions in North America, especially the United States. One of the companies that has been able to handle the slowdown better than its peers has been Toyota (NYSE: TM). But the effects are being felt even by the Japanese automaker, as made clear today in the news that the company is laying off 800 workers in one of its Japanese plants.
The 800 workers that are being laid off represent about 10% of the workforce at the company's plant in southwestern Japan. So far, the company has been able to sidestep the steep losses that its American rivals have been forced to deal with, but this year is proving to be a bit tougher, as the company is now predicting a first annual drop in profit, which would be the first time in the past seven years that the company has seen profit fall.
Toyota has been more fortunate than many automakers, mostly due the fact that the company has a long history of building smaller, more fuel efficient cars. This fact alone has helped it weather the slowdown that record high gasoline prices in the U.S. have helped create. Last Friday, however, the company stated that sales dropped 18.7% in July from the same period last year.
The Wall Street Journal reports that Wal-Mart Stores (NYSE: WMT) is warning its store managers against an Obama victory in November. Why? because Wal-Mart executives worry that Obama will boost the power of unions and that unionized Wal-Mart stores will lead to higher worker pay -- and higher prices for Wal-Mart customers.
I can understand why Wal-Mart executives would want to keep President Bush's policies in place for another four years. After all, those low taxes on the top 1% help enrich Wal-Mart brass. I am not suggesting that all Wal-Mart customers are Republicans, not at all, but I do believe that most people who shop at Wal-Mart cannot afford to buy their shoes at Neiman Marcus. And these middle- and lower-income Wal-Mart shoppers are the natural beneficiaries of Democratic policies such as Obama's plan for a middle-class tax cut.
Wal-Mart is clearly trying to be on both sides of this election. The Journal reports that it's reduced its share of contributions to Republican candidates from 98% in 1996 to 52% in 2008 -- giving 48% of its $2.2 million in political contributions to Democrats this year. It also has directors who have been big Clinton supporters, including Hillary Clinton herself who served on its board from 1986 to 1992 and Aida Alvarez, who worked in Bill Clinton's cabinet from 1997 to 2001 and has been a Wal-Mart director since 2006.
The move came about a week after the company announced that it wouldn't be able to meet its goal of returning to profitability next year due to the current economic slowdown. A factor leading to the company's problem has been a shift in consumer preference from trucks to smaller, more fuel efficient vehicles, a move that comes in reaction to the current record high gasoline prices that have spread across America. Ford said last week it was forced to cut SUV production.
Ford has not released any specific details on the job cuts, but the details are expected to be released sometime in July. The company currently has 24,300 salaried workers in the United States, Canada and Mexico.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.
U.S. worker productivity increased at a 2.2% annual pace in Q1 2008, above the consensus estimate, as businesses cut both jobs and worker hours to contain costs, the U.S. Labor Department announced Wednesday.
Economists surveyed by Bloomberg News had expected productivity to increase 1.7% in Q1 2008. Productivity is now up 3.2% on a year-over-year basis.
Productivity increased 1.8% in 2007 and 1% in 2006. Productivity measures output per hour worked. Economist say rising productivity usually leads to increases in income, as businesses can increase salaries/wages paid without increasing their per unit costs.
Meanwhile, unit Q1 2008 labor costs, a statistic adjusted for increases in efficiency, increased to 2.2%, compared to a 2.8% increase in Q4 2007. Labor costs have risen just 0.2% on a year-over-year basis, the smallest increase since 2004. Labor costs increased 3.1% in 2007.
Economist Peter Dawson liked the Q1 2008 productivity report, for the most part. "There is some concern about employers curtailing employee hours, but in general, the 2.2% increase in productivity is a healthy stat. U.S. workers are becoming more productive. It'll help businesses contain costs amid all other cost increases. It's a generally good report."
Economic Analysis: As Dawson noted, in general, a favorable Q1 2008 productivity report. The nation's workforce continues to become more-efficient, which is a good sign, given increasing business costs in other areas -- raw materials, commodities, energy and transportation costs, etc. Early in 2008, companies are containing employee costs, and increased productivity is contributing to this goal.
Last night, handset maker Motorola Inc. (NYSE: MOT) announced that it would be slashing another 2,600 jobs as the company continues to battle lower sales. The current job cuts represent approximately 4% of its total job force as of the end of 2007 of 66,000 employees.
It wasn't that long ago that Motorola was a major force in the world of mobile phones, but over the past two years the company has definitely fallen from grace among consumers. Two years ago the company was the world's second largest handset maker, but that status is no more, and the company is currently sitting in the fourth spot overall.
Analysts have blamed the company's drop due to lack of innovation, and some have gone so far as to predict that the company's handset business is doomed if Motorola can not pick up the pace and start to pump out new and fresh ideas for consumers to gobble up.
Two years after coming out of bankruptcy, ATA airlines has once again been forced to file for chapter 11. The airline canceled all flights, and has advised travelers to start to look for alternative travel arrangements.
The airline operated roughly 50 flights a day, and had more than 2,200 employees working. On its website, ATA has issued a formal statement and blamed the final straw for its collapse on the loss of a key military contract. In 2006, the company had won a $335 million dollar contract from the U.S. Air Force for international airlift services.
In its statement, ATA has advised passengers to contact their credit card company, or travel agent to discuss the options to get refunded for their unused tickets.
U.S. worker productivity increased 1.9% in Q4 2007, above the consensus estimate, as businesses reduced employee hours to contain costs, the U.S. Labor Department announced Wednesday.
Analysts surveyed by Bloomberg News had expected productivity to increase 1.8% in Q4 2007. Productivity increased 6.9% in Q3 2007.
For 2007, productivity increased 1.8%, up from 1% in 2006. Productivity measures output per hour worked. Economists say rising productivity usually leads to increases in income, as businesses can increase salaries/wages without increasing their per unit costs.
Meanwhile, Q4 2007 unit labor costs, a statistic adjusted for increases in efficiency, were revised higher to 2.6% from the earlier 2.1%. Labor costs increased 3.1% in 2007.
During Q4 2007, hours worked fell 1.6%, the largest decline since Q1 2003, and the second consecutive quarterly drop.
Economic Analysis: In general, a decent Q4 2007 productivity report. The nation's workforce continues to become more-efficient, which is a good sign, given increasing business costs in other areas -- health care insurance, raw materials, commodities, energy and transportation costs, etc. In 2007, companies did an adequate job containing employee costs.
There's an economic adage that says, "The economic cycle repeats itself, but never in quite the same way."
The current economic slowdown, at least initially, is providing evidence to confirm the above, as unlike the previous two slowdowns, corporations appear to be taking a more-cautious approach toward both eliminating and adding jobs.
During this cyclical downturn, many companies are adopting hiring freezes as they attempt to discern the likely direction for the U.S. economy in 2008 and beyond, The Wall Street Journal reported.(Subscription required.) Many economists expect the U.S. economy to register anemic growth in Q1 and Q2 2008 -- roughly 1.0-1.5% GDP growth, and the most recent monthly hiring total supports that prediction: the nation added fewer than 20,000 jobs in December 2007.
However, unlike the start of previous downturns in 2001,1990-1991, and 1981-1982, corporations have resisted -- at least so far -- major layoffs and operational cutbacks. Economist David H. Wang told BloggingStocks on Thursday that he believes two factors are behind the personnel balancing act.
As part of its ongoing restructuring program, beauty products giant Avon Products (NYSE: AVP) announced plans to reduce its workforce by 2,400 jobs. The company's restructuring plan was first announced in 2005, and the company is now looking at completing the restructuring in 2011.
Previously, the restructuring was supposed to run the company $500 million, but now the estimates are pointing to a total cost closer to $530 million. Once completed, the company plans to save itself approximately $430 million annually. This is substantially higher than the original $300 million annual savings the company had initially anticipated.
While the company has been moving through its restructuring over the past two years, the stock has been trading pretty strong. Since the end of 2005, the stock has moved from $27.34 to its current price of $39.00, picking up 42.6% for its shareholders.
It was only a couple of months ago when drug maker Novartis AG (NYSE: NVS) announced that it would be slashing 1,260 jobs in the U.S., and today we get news of another 2,500 job cuts worldwide by the year 2010.
Novartis has been particularly hard hit lately in the generic drug market from increased regulatory demands and Increased competition. During the July through September quarter, the company showed that profit fell by over 12 percent. The company did, however, benefit nicely from the sale of its Gerber baby foods and Medical Nutrition units to Nestle SA.
Looking ahead, the company is hoping that it will be able to regain momentum though engineering new drugs and streamlining its units.
From today's (subscription required) Wall Street Journal:
Employers who provide health insurance often use financial incentives, such as contributions toward premiums, to encourage workers to participate in wellness programs like smoking-cessation courses.
Now some employers are wielding a stick as well as a carrot. Employees at some companies who are overweight, smoke, or have high cholesterol, for instance, and who don't participate in supplementary wellness programs, will pay more for health insurance. In extreme cases, employees' insurance deductibles could rise by $2,000.
Of course, this is generating some scandal and talk of possible lawsuits.
It reminds me a little bit of my favorite scene from favorite scene from Spinal Tap, where Nigel Tufnel explains to an observer that the band's amps go to 11, rather than 10. The incredulous man asks how that really makes them go louder -- they only go to a certain volume, regardless of what number it's labeled.
Similarly: Charging a premium for engaging in an unhealthy behavior is not different from offering a reward for not engaging in the same behavior in any sort of meaningful way.
This seems like one big labeling issue, but it should give trial lawyers something to keep them busy.
Wal-Mart (NYSE: WMT) has been ordered to pay $36.4 million in fees and legal expenses to attorneys representing Pennsylvania employees who worked off the clock at the world's largest retailer. The suit involved 187,000 workers, and the total value of the judgment is now up to $187.6 million.
My favorite part: According to The Wall Street Journal, "A Philadelphia jury last year rejected Wal-Mart's claim that some people chose to work through breaks or that a few minutes of extra work was insignificant."
Can't imagine why they rejected that one. If true, though, it would have made a great recruiting slogan for the company: "Wal-Mart: The job that's so much fun you'll want to skip your break and work off the clock!"
Fighting the suit in the courts has just prolonged the bad publicity for the company.