Former Wal-Mart executive Coughlin dies at 66 | Reuters
The catalyst was Scott's winning the top job - upsetting another Wal-Mart executive, Thomas Coughlin. The two men were from similar. Thomas Martin Coughlin (June 6, – April 1, ) was an American businessman who served as vice chairman of Wal-Mart Stores, Inc. and confidante of. Former-Wal Mart Stores Inc. vice president Tom Coughlin, left, and his wife Cynthia, right, leave a Fort Smith, Ark., federal courthouse after he.
Law enforcement officials then said some Wal-Mart executives had direct knowledge of the illegal workers, based on recorded conversations, surveillance and monitoring.
The union has been spearheading the Wal-Mart unionization drive for more than a decade, with very little success. The vote at the Loveland tire center coincided with growing criticism that Wal-Mart mistreats its workers, and a UFCW spokesman said the outcome showed just how well Wal-Mart's fear tactics work. He said the union would file several charges with the National Labor Relations Board, officials of which oversaw the balloting.
He said the retailer had barred the union from sending its own representative to observe the vote. But Terry Srsen, vice president of labor relations for Wal-Mart, said in a statement: Sooner or later there's going to be a group of people that are going to stand up to Wal-Mart's fear tactics,'' he told Reuters. Another UFCW official said before the results were made public that the balloting had been itself a big victory because the company had resisted previous attempts by the tire workers to vote.
The vote came after a ruling by the National Labor Relations Board. The outcome of the voting in Loveland was closely watched as Wal-Mart recently said it would shut down a store in Jonquiere, Quebec, which had won union certification last year but had failed to reach a labor agreement with the discounter.
Meat cutters had voted to unionize at a Texas Wal-Mart store in That Texas vote, however, was shortly followed by the company's announcement that it was eliminating meat-cutter positions within the company.
In addition to union pressure, the discounter is grappling with growing opposition from some communities where it is trying to set up shop. Just this week, Wal-Mart's push for the first Wal-Mart store in New York City hit a snag as a large real estate developer ditched plans to include the discounter's outlet in a Queens shopping complex, according to news reports. Sincefederal authorities have uncovered the cases of at least illegal immigrants who were employed by janitor contracting services and hired by the giant retailing chain in 21 states.
Many of the janitors -- from Mexico, Russia, Mongolia, Poland and a host of other nations -- worked seven days or nights a week without overtime pay or injury compensation Those who worked nights were often locked in the store until the morning Officials said at the time of the raids the investigation involved wiretaps that revealed Wal-Mart executives were aware that the subcontractors used illegal workers An employer can face civil and criminal penalties for knowingly hiring illegal immigrants or failing to comply with certain employee record-keeping regulations The United Food and Commercial Workers Union called on Wal-Mart Stores yesterday to release all documents connected with accusations that its former vice chairman, Tom Coughlin, had obtained improper expense account reimbursements to finance secret anti-union activities.
Ex-Wal-Mart Exec Admits Fraud - CBS News
The union's call for release of the materials comes two weeks after Mr. The company, based in Bentonville, Ark. Coughlin diverted thousands of dollars in expense account reimbursements as part of a plan to make secret payment to union staff members so they would tell Wal-Mart officials the names of pro-union employees at stores.
Wal-Mart should not try and cover up its activities but should do the right thing and make all of the documents public immediately. Coughlin nor anyone else at Wal-Mart was ever authorized by the company to make payments to anyone for information about union activity. Williams said a company investigation had found no evidence supporting accusations of money being funneled to illegal anti-union activities.
Instead, she said, the money was misappropriated for the personal benefit of specific individuals. Greg Denier, a union spokesman, said the union did not know of any officials who had accepted payoffs from Mr. Coughlin to inform on pro-union employees. He said he would be shocked if any staffers had accepted such payments.
Tom Coughlin (Walmart executive) - Wikipedia
Federal law prohibits companies or their managers from paying money to union officials to help derail organizing drives. The food and commercial workers have sought to unionize dozens of Wal-Mart stores, but have failed to organize any workers except for those in the meat department of one store in Jacksonville, Tex.
That was five years ago, and a few weeks after the organizing drive succeeded, Wal-Mart, with a reputation for fiercely fighting unions, announced that it was phasing out its meat-cutting operations at its stores in many states and would start using prepackaged meat instead. The Wall Street Journal reported that Mr. In a statement, Mr. Coughlin's lawyers, William W. Coughlin did not seek nor obtain any improper reimbursements from Wal-Mart. We are unable to respond further to allegations concerning expense reimbursement without seeing the records.
Wal-Mart has refused to provide them to Mr. Coughlin, who had once been in the running for chief executive, with the documents after he had worked for the company for 27 years. William Cromwell, first assistant United States attorney for western Arkansas, declined to comment on the accusations against Mr. The Coughlin resignation is part of a continuing string of embarrassments for Wal-Mart.
This week, Wal-Mart held its first conference for journalists in an effort to burnish the company's image. Lawrence Jackson, an executive vice president, said Wal-Mart had repeatedly told its managers and employees to comply with the law.
Coughlin's departure saying, "It's an extraordinarily difficult issue for the company because of Tom's tenure with the company and the status he held. A new group of Wal-Mart critics ran a full-page advertisement on April 20 contending that the company's low pay had forced tens of thousands of its workers to resort to food stamps and Medicaid, costing taxpayers billions of dollars.
On April 26, as part of a campaign called "Love Mom, Not Wal-Mart," five members of Congress joined women's advocates and labor leaders to assail the company for not paying its female employees more.
And in a book to be published this fall, a group of scholars will argue that Wal-Mart Stores, having replaced General Motors as the nation's largest company, has an obligation to treat its employees better. Among workers at Wal-Mart's 3, stores across the United States, the debate is also heating up. She says she is happy to have the job.
Mrkwa pronounced MARK-wah said. Scott contends that the critics, including competitors, are defenders of an outdated status quo, intent on upholding a retailing system full of inefficiency and inflated prices. He said that if Wal-Mart were as greedy as its detractors say, it would never have attracted 8, job applicants for places at a new store in Glendale, Ariz.
Duke, chief of the company's stores division, said, "Wal-Mart is a very good place to work for our associates, and every day we make it even better. Mrkwa, the food stocker, does not see it that way. Wal-Mart critics often note that corporations like Ford and G. Wal-Mart brags about how its low prices help poor Americans, but its low wages are helping increase the number of Americans in poverty. Scott argues that retailers, with narrow profit margins, face a different competitive situation and cannot afford to be as generous to their workers as automakers and other capital-intensive companies.
The facts are that retailing doesn't perform that role in the economy as G. Retailing doesn't perform that role in any country in the world. At less than 3 percent of its sales in the United States, critics say, Wal-Mart could absorb these costs by slightly raising its prices or accepting somewhat lower profits. But company executives dismiss such proposals, saying they would largely wipe out Wal-Mart's profit or its price advantage over competitors. Wal-Mart had a profit margin on sales last year around 3.
If "we raised prices substantially to fund above-market wages, as some critics urge," the company argued in a recent two-page ad in The New York Review of Books, "we'd betray our commitment to tens of millions of customers, many of whom struggle to make ends meet. Scott pursued that theme. It doesn't make any sense.
It says 74 percent of its employees work full time, compared with fewer than 40 percent at many other retailers. At Costco, 82 percent of the workers are covered by company health insurance, compared with 48 percent at Wal-Mart. They don't have a responsibility to society to pay a higher wage than the law says you have to pay. A lot of its new workers, for instance, don't know where to stock things.
Higher wages will mean more productivity per person, and that should help raise profits. It's perfect for me right now. An internal memo sent to Wal-Mart's board of directors proposes numerous ways to hold down spending on health care and other benefits while seeking to minimize damage to the retailer's reputation.
Among the recommendations are hiring more part-time workers and discouraging unhealthy people from working at Wal-Mart. In the memorandum, M. Susan Chambers, Wal-Mart's executive vice president for benefits, also recommends reducing k contributions and wooing younger, and presumably healthier, workers by offering education benefits.
The memo voices concern that workers with seven years' seniority earn more than workers with one year's seniority, but are no more productive. To discourage unhealthy job applicants, Ms. Chambers suggests that Wal-Mart arrange for "all jobs to include some physical activity e.
Chambers acknowledged that 46 percent of the children of Wal-Mart's 1. Wal-Mart executives said the memo was part of an effort to rein in benefit costs, which to Wall Street's dismay have soared by 15 percent a year on average since Like much of corporate America, Wal-Mart has been squeezed by soaring health costs.
In an interview, Ms. Chambers said she was focusing not on cutting costs, but on serving employees better by giving them more choices on their benefits. Chambers also said that she made her recommendations after surveying employees about how they felt about the benefits plan.
Another would put health clinics in stores, in part to reduce expensive employee visits to emergency rooms. A draft memo to Wal-Mart's board was obtained from Wal-Mart Watch, a nonprofit group, allied with labor unions, that asserts that Wal-Mart's pay and benefits are too low. Tracy Sefl, a spokeswoman for Wal-Mart Watch, said someone mailed the document anonymously to her group last month. When asked about the memo, Wal-Mart officials made available the updated copy that actually went to the board.
He also said that Wal-Mart supported raising the minimum wage to help Wal-Mart's customers. The theme throughout the memo was how to slow the increase in benefit costs without giving more ammunition to critics who contend that Wal-Mart's wages and benefits are dragging down those of other American workers.
Chambers proposed that employees pay more for their spouses' health insurance. Life insurance, she said, was "a high-satisfaction, low-importance benefit, which suggests an opportunity to trim the offering without substantial impact on associate satisfaction. Acknowledging that Wal-Mart has image problems, Ms. Specifically, our coverage is expensive for low-income families, and Wal-Mart has a significant percentage of associates and their children on public assistance. But the memo said that three top Wal-Mart officials - its chief financial officer, its top human relations executive and its executive vice president for legal and corporate affairs - had "received the recommendations enthusiastically.
Chambers's memo voiced concern that workers were staying with the company longer, pushing up wage costs, although she stopped short of calling for efforts to push out more senior workers. She wrote that "the cost of an associate with seven years of tenure is almost 55 percent more than the cost of an associate with one year of tenure, yet there is no difference in his or her productivity.
Moreover, because we pay an associate more in salary and benefits as his or her tenure increases, we are pricing that associate out of the labor market, increasing the likelihood that he or she will stay with Wal-Mart.
The memo said Wal-Mart workers tended to overuse emergency rooms and underuse prescriptions and doctor visits, perhaps from previous experience with Medicaid. The memo noted, "The least healthy, least productive associates are more satisfied with their benefits than other segments and are interested in longer careers with Wal-Mart. Such accounts are financed with pretax dollars and allow workers to divert their contributions into retirement savings if they are not all spent on health care.
Health experts say these accounts will be more attractive to younger, healthier workers.
Tom Coughlin (Walmart executive)
By reducing the amount of time part-timers must work to qualify for health insurance, Wal-Mart is hoping to allay some of its critics. One proposal under consideration would offer new employees "limited funding" so they could "gain access to the private insurance market" after 30 days of employment while waiting to join Wal-Mart's plan. Such assistance, the memo stated, "would give us a powerful set of messages to use in combating critics.#AlexFromTarget Meets #EllenFromEllen
For instance, 'Wal-Mart offers associates access to health insurance after they've worked with us for just 30 days. New York Times, Nov 1, The Labor Department's inspector general strongly criticized department officials yesterday for "serious breakdowns" in procedures involving an agreement promising Wal-Mart Stores 15 days' notice before labor investigators would inspect its stores for child labor violations.
The report by the inspector general faulted department officials for making "significant concessions" to Wal-Mart, the nation's largest retailer, without obtaining anything in return. The report also criticized department officials for letting Wal-Mart lawyers write substantial parts of the settlement and for leaving the department's own legal division out of the settlement process. The report said that in granting Wal-Mart the day notice, the Wage and Hour Division violated its own handbook.
It added that agreeing to let Wal-Mart jointly develop news releases about the settlement with the department violated Labor Department policies. The inspector general, Gordon S. Heddell, said the agreement did not violate federal laws or regulations. The Labor Department reached the settlement in January after finding 85 child labor violations at Wal-Mart stores in Connecticut, New Hampshire and Arkansas, involving workers under 18 who operated dangerous machinery, including cardboard balers and chain saws.
In addition to allowing the day notice, the agreement lets Wal-Mart avoid civil citations and fines if it brings a store into compliance within 10 days of when the department notifies it of a violation. In exchange for these concessions, the inspector general wrote, there was "little commitment from the employer beyond what it was already doing or required to do by law. Even though department officials asserted that the agreement was much like that with other companies, Mr.
Heddell found that the agreement between Wal-Mart and the Wage and Hour Division "was significantly different from other agreements entered into by W. Representative George Miller, the California Democrat who asked the inspector general to investigate the settlement, said the report showed that the Bush administration was seeking to do favors for a powerful friend and a major Republican contributor in Wal-Mart.
In a dissent, Judge Kermit E. Bye said Dawson properly found that Coughlin suffered from poor health and that the sentence should stand. He said Coughlin would have a tougher time in prison than the typical inmate because of five heart "episodes" that included a sudden cardiac death from which he survived. The court said Coughlin weighs pounds and has had an electronic defibrillator since It says the former executive suffers from a number of ailments, including hypertension, atherosclerosis, diabetes, gout, sinusitis, severe allergies and back and knee pain.
A doctor testified at Coughlin's sentencing hearing that prison would increase the risk of another heart attack, but the appeals court disregarded much of the testimony, saying he offered no proof that prison doctors couldn't take care of Coughlin's medical needs. Coughlin pleaded guilty to five counts of wire fraud and one count of filing false tax returns - all felonies. As such, Duke is not expected to veer far from the course set by Scott. Given his previous role as head of international operations, Duke is likely to expand Wal-Mart's presence in Russia and China to offset slowing growth at home and to focus on improving the nuts and bolts of store operations.
The company is also trying to crack urban markets in the U. Scott's wood-paneled office at Wal-Mart's corporate headquarters, no bigger than a child's bedroom, is the same one Walton used.
Scott remembers how it felt when he took over. Or as he puts it, "Moving into Sam Walton's office is intimidating.
It's not a sense of power, but a sense of responsibility, the sense of being responsible for this legacy. It has a far-reaching impact on the business world because the company is a bellwether for the U. In the months ahead, Wal-Mart's new CEO will be wrestling with some of the same issues that bedevil the Commander-in-Chief - a drop in consumer spending and soaring health-care costs, to name two.
And managing Wal-Mart is not unlike running a small country. It operates 7, stores worldwide and has held the No. Scott's changes have finally started to pay off: During Scott's reign, Wal-Mart's sales and profits have soared.
When the company releases its results on Feb. Civil war in Bentonville There were few outward signs of trouble when Scott took the helm in January But within the walls of the Bentonville headquarters, a civil war was brewing. The catalyst was Scott's winning the top job - upsetting another Wal-Mart executive, Thomas Coughlin.
The two men were from similar backgrounds, but their personal styles were the antithesis of each other's. Like many Wal-Mart executives, Scott did not have a privileged upbringing. The son of a gas station owner and a music teacher, he spent his early years working at his father's Phillips 66 station in Baxter Springs, Kan.
His high school was so small that during football games he'd spend the first half playing clarinet in the band and the second half suited up on the field. By the time he was 21, Scott was married with a child he now has two sons and living in a trailer while trying to finish college at Pittsburg State University in Kansas. He says his grades improved after his wife told him she didn't intend to spend her whole life living in a mobile home.
After a stint at the Yellow Freight System trucking company, he joined Wal-Mart in as assistant director of logistics. In some ways Scott fit right into the company's bottom-line-oriented culture.
According to one former associate, he was so frugal back then that he served guests generic Scotch. Glass ran the company from to and he was famous for persuading Sam Walton, who thought "damn computer" was one word, to invest heavily in new inventory-management systems that would give Wal-Mart an edge for years to come. He was also instrumental in devising Wal-Mart's successful supercenter concept, which pushed the company squarely into the grocery business, where it took share from rivals such as Kroger's KRFortune and Safeway SWYFortune Glass hired Scott after Scott walked into his office to complain that Wal-Mart would not pay a freight bill he felt was owed to his employer.
Glass refused to pay the bill, but he was impressed with Scott's sincerity and drive. Glass eventually groomed Scott to succeed him. As Scott rose through the ranks, he developed a reputation for being reserved, strategic, and sarcastic he once joked with PepsiCo CEO Indra Nooyi that he was going to drop her products because she was slow to call him.
His main rival, Thomas Coughlin, was ebullient and tactical. A former college football player at California State University East Bay in Hayward where his wife was a cheerleaderCoughlin was larger than life not just in physical appearance but also in personality. He was beloved by rank-and-file employees, who saw him as one of their own. Hired inCoughlin had become a close friend of Sam Walton's, who died in Management was soon split between Scott and Coughlin, who had been named president of Wal-Mart's domestic stores.
Like Coughlin, 59, who lives on a 2,acre Black Angus cattle ranch in Centerton, just west of Bentonville, many of the "boots" were free spirits who preferred Justins to Florsheims and jeans to suits.
Most were old-school Wal-Mart employees who had helped build the company from the ground up. There were not a lot of college graduates among the boots - Scott once said they were unable to "conjugate a verb" - but they knew how to move merchandise. Scott's group was more refined. Many of them live in French chateau-style houses that dot a gated community built around Pinnacle Country Club.
But the differences ran deeper than culture. Scott was pushing to modernize how the company was managed, and many of the boots were resistant to change. Scott often complained that despite Wal-Mart's dominance, its management ranks did not resemble those of a Fortune company.
He wanted to recruit more college graduates and offer better training for senior management. Scott and Coughlin clashed on issues large and small, including restructuring of store manager contracts and a plan to end layaway, which Scott supported and Coughlin opposed.
It was eliminated in December because of declining use and increasing costs. Their differences came to a head during an October board meeting. Coughlin was frustrated that much of the meeting was spent discussing Wal-Mart's new environmental initiatives, rather than talking about business heading into the holiday season.
After the meeting Coughlin, who didn't want to comment for this story, told Scott he was ready to retire and officially stepped down as vice chairman in Januarythough he retained his board seat. That might have been the end of it if Coughlin hadn't used a Wal-Mart gift card to buy contact lenses. According to Wal-Mart, the home office was tipped off to Coughlin's use of the card when a salesclerk at the store called headquarters to inquire about the program. The home office employee could not understand why Coughlin would be using such a card and alerted corporate fraud, which launched an investigation.
Coughlin has said that he used the money to finance covert anti-union activities. Wal-Mart says it knew nothing about such a program. Coughlin later pleaded guilty to wire fraud and tax evasion and served 27 months of house arrest.