Retailing giant Wal-Mart faced an unusual request when it sought government approval recently to buy a chain of stores in South Africa.
Labor groups there first asked for traditional protections, such as job security and a commitment from the new managers to buy merchandise from local suppliers. Then they called on Wal-Mart to end its long-running battle with unions thousands of miles away in the United States.
“You can’t say you violate the right to freedom of association because the culture in that country supports it,” said Mduduzi Mbongwe, who represents the South Africa Commercial, Catering and Allied Workers Union. “We don’t accept such an argument.”
The exchange highlights the complex relationship Wal-Mart has with its employees as unions become as globalized as the retailing giant’s footprint.
Its employees are not unionized in the United States, where the retailer has become infamous for its staunch opposition to labor groups. Even in Canada, it closed a store after workers there organized. But in the United Kingdom, Wal-Mart touts a growing roster of union employees, and it has negotiated contracts with entrenched labor groups in Brazil and Argentina for decades.
“We recognize those rights,” said John Peter “J.P.” Suarez, senior vice president of international business development at Wal-Mart. “In that market, that’s what the associates want, and that’s the prevailing practice.”
Union organizers are pushing for a unified approach to the retailer’s 2 million workers around the world. Labor leaders from disparate groups in Central America have begun talks, and unions in the United States, Argentina and Chile bolstered South African organizations during their negotiations. The international trade union coalition UNI recently sent a letter to Wal-Mart executives to discuss the possibility of a global agreement similar to those signed by competitors such as France’s Carrefour and retailers Ikea and H&M.
“Our message to Wal-Mart is that they should realize that this is the new reality of dealing with unions in a global economy, that we are so connected,” UNI General Secretary Philip Jennings said.
Wal-Mart has stores in 14 countries, and its expansion overseas is all the more important since it relies on international operations to fuel growth. While sales at home stagnated, its foreign stores raked in $100 billion in sales last year – a quarter of the company’s total revenue. That has forced the retailer to learn to play by a new set of rules.
In some countries, such as China, recognition of unions is required by law. In other cases, the political and social climate of a country makes union membership more palatable.
Chris Tilly, director of the Institute for Research on Labor and Employment at the University of California, said workers in the emerging markets that Wal-Mart is targeting in its international expansion often have a “split consciousness”: They are wary of large foreign enterprises, but the jobs they bring can be a boon to the community.
In South Africa, government officials approved Wal-Mart’s acquisition of retail conglomerate Massmart on the condition that it honor existing union contracts for three years and vow not to eliminate any jobs for two years. It also required the company to give preference to 500 workers who were recently fired from Massmart and establish a fund to buy from local suppliers.
But the government’s decision made no mention of Wal-Mart’s tensions with U.S. unions.
