The bigger concerns on the Wal-Mart offer to buyout Massmart

On Monday morning the world was greeted by the news of an offer by Wal-mart the worlds biggest retailer to buyout Massmart, at a a price that might look very tempting to shareholders and will definitely be so for top managers. The offer saw the value of Massmart shares jump with more than 10%. Surely this will appear very attractive to many shareholders. However, this offer and the likelihood of a deal has much more to do with simply what shareholders will get on accepting the offer.

For some time now SACCAWU has not only anticipated this intention of Wal-Mart but we have also actively participated in international campaigns against Wal-Mart as one of the worst and stubbornly anti-union companies in the world. Thus, a takeover of Massmart by Wal-Mart is a matter of serious concern to the SACCAWU.

Some facts about Wal-Mart anti union activities:

• Wal-Mart is a known anti-union company with training and toolkits for managers to keep the workplace union-free.

• It took almost fifty years for workers to successfully get Wal-Mart recognise a union at one of their US outlets.

• It has closed down departments and stores in North America where workers have successfully unionise themselves.

• By July 2008 the company faced more than 80 lawsuits in connection with wages, overtime and hours violations, most of it class actions, with more than 10 000 workers affected in many of the cases.

• It currently faces the largest class action on discrimination of women with more than 1.5 million women workers being part of the action.

• It pays women less then men and women are less likely to be promoted than male workers.

• It has been in court for racial discrimination against African-Americans truck drivers and Muslim employees of West African origin.

• In the 2008 US Presidential elections it was exposed to have actively co-erced their employees not to vote for Obama - the reason, Obama will make it easy to for unions to get into the workplace.

• It has been listed in Human Rights Watch reports for its aggressiveness of its anti-union activities.

• In the US wage levels at Wal-Mart has been found to be between 26% -37% lower than the national average.

• In 2008 it was fined 2 billion US dollars for more than two million wage related violations.

• Recently it was compelled to pay 34 million US dollars in unpaid back wages.

• Today in the US, it still represents the main opposition to a bi-partisan Free Choice Act that will allow workers to form and join unions easier.

• It conducts illegal surveillance on its employees to root out any attempts to unionisation.

However, it is not only the anti-union attitude that concerns us, also the impact that the general operations of Wal-Mart have on local economies, distributors, suppliers and manufacturers. While Wal-Mart has been touted as the cheapest retail outlets, new studies increasingly show that basket comparisons between Wal-Mart and competitors show the opposite, and this has seen a shrinking of its market share in the US, their biggest market. This might be one of the considerations for this move into AFRICA.

Wal-Mart has become so powerful that it dictates to their suppliers at what price they prepared to buy goods and failure have seen many suppliers, distributors and manufacturers going down. But more important, this 'reverse auction' relationship it has with suppliers has seen, not only the collapse of local manufacturing in many instances, but has also fueled the use of child labour and extreme low wage labour in other parts of the world where they source their goods from, like Guatemala and Bangladesh. Therefore, if this deal goes through, it will be a severe blow to all our intentions and attempts to build and develop local manufacturing, it will be a set-back for our buy local campaign and can lead to further increased unemployment not only in wholesale and retail but also in other sectors of the economy. Further, this development by its nature also poses serious threats to other wholesale and retail competitors in the country.

So why would the management tout this as a great deal? Who are to benefit? Not the eceonomy, not the workers, not even some of the shareholders, but top management and only those with astronomical amounts of shares. Top management will not only make millions from the sale but will immediately after the sale be offered large amounts of shares. Really, if anybody is to gain it will be the same top management that will try and sell the deal to its shareholders and the country as a great investment.

It is for all these reasons that we cautiously follow the developments and expect the Massmart management to come to us to show what the detail of this deal entail. However, it goes without saying that we as SACCAWU, will not allow any erosion of workers rights and benefits gained over decades through bitter struggles. We will not be silent and watch the destruction of local procurement polices we are fighting for, we will not allow further destruction of the local manufacturing go unchallenged. We will have to engage the company and call on our citizens to support us in a campaign against the Walmartisation of the sector. We call on shareholders to be wary of this to good to be true offer and the implications for our economy. If necessary we will engage the Competitions Commissions and even the Minister of Economic Development as well as the DTI to ensure that a deal so hostile to national interests and the developmental objectives of our country is not undermined. Either way, the call for an intensification of our campaign against the Walmartisation of or sector will be extended to the entire labour movement and civil society of the country.

The denials and conspicuous secrecy by Massmart management towards SACCAWU, when we've raised this matter numerous times with them leaves much to be desired. This coupled with the Walmartisiation of operations at play already resulted into serious disputes and shedding of jobs. Some of the new measures included unilateral introduction of new technology, re-engineering that expect workers to re-apply for their current jobs which include the threat of down variation and demotion for workers or loose their jobs. Finally, we have for sometime noticed a growing hostility towards SACCAWU over the last few years which we always believed had to do with this intentions. SACCAWU will not sit-back, but engage in a determined fight-back including calling on our international allies to support this struggle.

Statement issued by Mike Abrahams, SACCAWU, September 23 2010

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