[Marxism] Democratic Party consultants work in Wal-Mart war-room

Louis Proyect lnp3 at panix.com
Thu Nov 3 08:51:11 MST 2005


NY Times, November 1, 2005
A New Weapon for Wal-Mart: A War Room
By MICHAEL BARBARO

BENTONVILLE, Ark., Oct. 26 - Inside a stuffy, windowless room here, 
veterans of the 2004 Bush and Kerry presidential campaigns sit, stand and 
pace around six plastic folding tables. Open containers of pistachio nuts 
and tropical trail mix compete for space with laptops and BlackBerries. CNN 
flickers on a television in the corner.

The phone rings, and a 20-something woman answers. "Turn on Fox," she 
yells, running up to the TV with a notepad. "This could be important."

A scene from a campaign war room? Well, sort of. It is a war room inside 
the headquarters of Wal-Mart, the giant discount retailer that hopes to 
sell a new, improved image to reluctant consumers.

Wal-Mart is taking a page from the modern political playbook. Under fire 
from well-organized opponents who have hammered the retailer with 
criticisms of its wages, health insurance and treatment of workers, 
Wal-Mart has quietly recruited former presidential advisers, including 
Michael K. Deaver, who was Ronald Reagan's image-meister, and Leslie Dach, 
one of Bill Clinton's media consultants, to set up a rapid-response public 
relations team in Arkansas.

When small-business owners or union officials - also employing political 
operatives from past campaigns - criticize the company, the war room swings 
into action with press releases, phone calls to reporters and instant Web 
postings.

One target of the effort are "swing voters," or consumers who have not 
soured on Wal-Mart. The new approach appears to reflect a fear that 
Wal-Mart's critics are alienating the very consumers it needs to keep 
growing, especially middle-income Americans motivated not just by price, 
but by image.

The first big challenge of the strategy will come Nov. 1 with the premiere 
of an unflattering documentary. "Wal-Mart: The High Cost of Low Price" was 
made on a shoestring budget of $1.8 million and will be released in about 
two dozen theaters. But its director, Robert Greenwald, hopes to show the 
movie in thousands of homes and churches in the next month. The possibility 
that it might become a cult hit like Michael Moore's 1989 unsympathetic 
portrait of General Motors, "Roger & Me," has Wal-Mart worried.

So, Wal-Mart has embarked on a counteroffensive that would have been 
unthinkable even a year ago. Relying on a preview posted online, Wal-Mart 
investigated the events described in the film and produced a short video 
contending the film has factual errors. (Mr. Greenwald denies there are 
errors and says that Wal-Mart has not seen the final cut.)

Wal-Mart has also begun to promote a second film, "Why Wal-Mart Works & Why 
That Makes Some People Crazy," which casts the company in a rosier light. 
Wal-Mart declined to make its executives available for the Greenwald film, 
but it participated with the second film's director, Ron Galloway. The war 
room team helped distribute a letter, written by Mr. Galloway, that 
challenges Mr. Greenwald to show the two movies side-by-side.

To keep up with its critics, Wal-Mart "has to run a campaign," said Robert 
McAdam, a former political strategist at the Tobacco Institute who now 
oversees Wal-Mart's corporate communications. "It's simply nonsense for us 
to let some of these attacks go without a response."

Wal-Mart's aggressive new posture is a departure from its tradition of 
relying on an internal staff to manage the company's image. The war room, 
which is part of a larger Wal-Mart effort to portray itself as more 
worker-friendly and environmentally conscious, runs counter to the 
philosophy of the chain's founder, Sam Walton. Believing that public 
relations was a waste of time and money, the penny-pinching Mr. Walton 
would not likely have hired a public relations firm like Edelman, 
Wal-Mart's choice to operate its war room.

So what has changed? For one thing, Wal-Mart's critics have become more 
sophisticated.

For years, unions hurled little more than insults at the chain. But over 
the last year, two small groups - Wal-Mart Watch and Wake Up Wal-Mart - set 
up shop in Washington with the goal of waging the public relations 
equivalent of guerilla warfare against the company. Wal-Mart Watch received 
start-up cash from the Service Employees International Union; Wake Up 
Wal-Mart is a project of the United Food and Commercial Workers 
International Union. Unions have tried, unsuccessfully, to organize 
Wal-Mart's employees.

At the suggestion of Wake Up Wal-Mart, members of the nation's largest 
teachers' unions staged a boycott of Wal-Mart for back-to-school supplies 
this fall. Wal-Mart Watch, meanwhile, set up an automated phone system that 
called 10,000 people in Arkansas in June seeking potential whistle-blowers 
willing to share secrets about the retailer.

Wal-Mart did not rebut such attacks, even when Wal-Mart Watch released a 
24-page report blasting the company's wages and benefits. Wal-Mart Watch 
said the report had been downloaded from its Web site 55,000 times.

Once a darling of Wall Street, Wal-Mart's stock price has fallen 27 percent 
since 2000, when H. Lee Scott Jr. became chief executive, a drop that 
executives have said reflects, in part, investors' anxieties about the 
company's image. Sales growth at stores open for more than a year has 
slowed to an average of 3.5 percent a month this year, compared with 6.3 
percent at Target. And Wal-Mart is facing growing resistance to new urban 
stores, with high- profile defeats in Los Angeles, Chicago and New York.

There is some evidence that criticism is influencing consumers. A 
confidential 2004 report prepared by McKinsey & Company for Wal-Mart, and 
made public by Wal-Mart Watch, found that 2 percent to 8 percent of 
Wal-Mart consumers surveyed have ceased shopping at the chain because of 
"negative press they have heard."

The Greenwald movie threatens to make matters worse. It features 
whistle-blowers who describe Wal-Mart managers cheating workers out of 
overtime pay and encouraging them to seek state-sponsored health care when 
they cannot afford the company's insurance. And it travels across 
small-town America to assess the effects on independent businesses and 
downtowns after a Wal-Mart opens.

The film is a particular concern now that Wal-Mart is trying to move 
upscale, a strategy it hopes will appeal to higher-income consumers. In the 
last year, Wal-Mart has introduced a line of urban fashions called Metro 7, 
hired hundreds of fashion specialists to monitor how clothing is displayed 
in stores, and produced more polished advertising.

But for the fashion strategy to pay off, Wal-Mart must win over a group of 
shoppers who are sensitive to criticism of the chain's record - consumers, 
in the words of Wal-Mart's chief executive, "who are not worried about 
their next paycheck."

Hence the war room in Bentonville. Wal-Mart executives realized they were 
unprepared to react to what Mr. Scott began to call the most expensive 
campaign ever waged against a corporation. So the company quietly mailed a 
letter to the country's biggest public relations firms several months ago 
seeking their help in developing a response.

The contract went to Edelman, which assigned its top two Washington 
operatives to the account. Wal-Mart would not say what it is paying 
Edelman, nor would it allow interviews with the war room staff. Mr. Dach, 
who is active in environmental and Democratic causes, was an outside 
adviser to President Clinton during the impeachment battle. Mr. Deaver was 
President Reagan's communications director and the creative force behind 
Mr. Reagan's so-called Teflon image.

Edelman also dispatched at least six former political operatives to 
Bentonville, including Jonathan Adashek, director of national delegate 
strategy for John Kerry, and David White, who helped manage the 1998 
re-election of Representative Nancy Johnson, a Connecticut Republican. 
Terry Nelson, who was the national political director of the 2004 Bush 
campaign, advises the group.

In turn, Wakeup Wal-Mart is led by, among others, Paul Blank, former 
political director for the Howard Dean presidential campaign, and Chris 
Kofinis, who helped create the DraftWesleyClark.com campaign.

Wal-Mart Watch's media team includes Jim Jordan, former director of the 
Kerry campaign, and Tracy Sefl, a former Democratic National Committee aide 
responsible for distributing negative press reports about President Bush 
during the 2004 campaign.

The war room staff arrives at Wal-Mart's headquarters, a short drive from a 
nearby corporate apartment where they live, by 7 every morning. The group 
works out of an old conference room on the second floor, christened Action 
Alley, the same name Wal-Mart gives to the wide, circular aisle that runs 
around its stores.

Three display boards are covered with to-do lists. One says: "Promote Week 
of 10/24/05: MLK Memorial Donation. Urban/blighted community plan." Two 
large maps show the location of Wal-Mart and Sam's Club stores across the 
United States.

The team starts the day by scanning newspaper articles and television 
transcripts that mention Wal-Mart. Next come conference calls with Wal-Mart 
employees around the country to plan for events. Whenever possible, Mr. 
McAdam said, the war room will try to neutralize criticism before it is 
leveled.

That was the strategy behind what Action Alley considers its first coup. In 
late September, after several unions broke off from the A.F.L.-C.I.O., the 
splinter groups announced they would hold a convention in St. Louis on a 
Tuesday.

Action Alley members, assuming Wal-Mart would be a target of criticism 
during the union gathering, arranged for Wal-Mart to hold its own news 
conference the day before. It invited three local suppliers, a sympathetic 
local official and a cashier to say that Wal-Mart had a positive effect on 
the community.

"If you look at many of the stories that were written about that overall 
convention, they've got our messages in them," Mr. McAdam said. "In the 
past, when we've just responded to something somebody else is doing, it's 
sort of 'you know, by the way, Wal-Mart says ...' We got ahead of this one."

A campaign atmosphere pervades Action Alley. A small bus with the words 
"Clinton-Gore" on the side sits on the table. When discussing Wakeup 
Wal-Mart, Wal-Mart Watch and the Greenwald movie, Mr. McAdam slips into 
political-speak.

"The people who show up at Mr. Greenwald's film are probably not swing 
voters," he said. "They are probably the true believers of their point of 
view and I doubt there is a heck of a lot we can do to change their minds."

Mr. McAdam continued: "They've got their base. We've got ours. But there is 
a group in the middle that really we all need to be talking to."

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