Energy: WAL-MART's Epiphany

It's been a while since I've written about WAL-MART, but here's a story that should appeal to those who consider our energy policy to be lacking and think big government policy incentives are the only way to fix it.
Guess what? 
Old fashioned good business sense can also begin to change our stupid reliance on only burning ever more fossil fuel. 

Remember the 'WAL-MART effect'? 
You know, the one which resulted from WAL-MART buying into the energy efficient light bulb idea, then switching its corporate policy to be the de-facto leader in that effort?
It worked! 
And its competitors followed -almost overnight.

Now, why do you imagine WAL-MART made that decision? 
Think it had anything to do with saving itself major electrical utility costs, like on the order of 30%?
Here's a flash; self-interest motivated WAL-MART, which then led to the idea that other companies might follow for the same reason. 
But, by trailblazing this inherently good idea, WAL-MART got the immediate attention of not only its customers, but its competitors, who seemed to need a little more motivation than just doing something smart because it was smart.

After that resounding success, WAL-MART -always cost conscious- followed by reducing its huge consumption of diesel fuel by making more smart changes, like shutting down its truck engines instead of leaving them to idle as had been the widespread custom.
That little idea saved 20% of fuel costs for WAL-MART's huge truck fleet.

The latest change in WAL-MART thinking is to generate its own energy from solar and wind power, as is reported in this recent article.
Read it if you dare!
Maybe WAL-MART can convince even more doubters that alternate energy makes both sense and dollars!

While I still don't shop at WAL-MART except occasionally, you can bet I'm getting closer to it.
Because when a company, already so good at optimizing its supply chain, begins to turn its attention at other effective ways to cut costs, watch out!
The reported 27% less cost for a typical grocery basket at WAL-MART isn't something to sneeze at, and neither are economies of scale.

Now, maybe the company will focus more on providing better wages & benefits and a greater selection of American made goods; when that happens, maybe I'll become a more regular customer.
These folks are not stupid; they're smart!
I'd like to see more businesses just get with this program.
Not only will it work for them, it'll work for all of us.
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Healthcare & Walmart

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This topic ought to be a hot one, irrespective of anyone's view.
Would you believe Walmart's new stance on this issue?
Think they might see some major advantages that favor them which had not been apparent up to now?
I'd bet on that, because that's what free enterprise is all about.

But, the real question is, can companies like Walmart help make the changes that most of us seem to believe are necessary?
You can think of Walmart what you will, but they can -and do- have a major effect on buying habits when they go after something!
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First, here's what outgoing Walmart CEO Lee Scott had to say about its plan to establish up to 400 health clinics during the next 2-3 years. [Click here]

And, second, here's someone's opinion on 20 ways these new Walmart clinics might impact the existing healthcare system: [Click here]

Next, here's a short summary of Walmart's reversal on supporting a national healthcare system: [Click here]

And, finally, here's a link to yet another opinion that we ought to let Walmart actually run our healthcare system -on the theory they would do a better job than either the government or the existing providers: [Click here]
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Just when we think that we've figured out where folks stand on an issue, things do seem to change, don't they?
This will be an interesting subject to follow the next several months, and beyond.
Let's see what actually occurs, as something certainly will.

Whatever happens, we will not be likely to have the same healthcare system -or lack of it- that we have now.
Neither will we get the system that many strongly favor.
Likely, we'll get some collection of compromises that can gather sufficient support to pass Congress.

I hope the compromise ultimately adopted includes universal basic coverage for everyone, and a public system that people can choose if they want it.
There may be some other features that are desirable too, but those two are essential.
Also, there needs to be a system of periodic review, where changes can be made as the need arises.

It is well past the time that a country, like ours, ought to have a decent healthcare system.
Access to reasonable healthcare is something most people think of as a basic right.
Maybe we should consider adding that to the Bill of Rights?
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Local Labor Boss Issues 11th Hour 'Warning'

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Yesterday's Herald carried an opinion piece by David Warren designed to not-so-subtlely dissuade our Mayor and City Council from seriously reconsidering the City's ill-advised 'Big-Box' ban.
You can read this article right here.

Of course, today - the 'ides of June' - is the day that public discussions will be held to reconsider the so-called 'big-box ban, along with other measures to help the City bring its General Fund budget back into a better semblance of balanced.
So, it's understandable that folks who are afraid their ox will be gored, show up to beg, cajole or intimidate our elected officials to do their bidding.
That's OK, and part of the process, as long as our electeds are careful to observe the fractured latin of 'petticoati tyrannus non bossanova', which roughly translates into 'don't let petty tyrants boss you around'

In his piece, Mr Warren:
• disagrees with the Herald editorial board that the 'big-box' was really targeting Wal-Mart [it was]
• tries on a 'green suit' in an effort to court sustainability fans [not his color]
• rails against any corporation who dares to get too big, resist unionization, go bankrupt, pay less than family wages & benefits, lays off workers, or leaves an 'empty' building behind [welcome to America]
• claims -unconvincingly- he is not an 'anti' Mayor Pike [huh?]
• applauds the City for searching for 'creative ways' to solve the current severe revenue shortfall, without offering any plan himself for reducing expenditures [kinda hard, isn't it?]
• avoids mentioning entirely the furlough plan now being considered by Whatcom County [inconvenient & unpleasant]

Can you see a pattern here?
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As the chief architect of the hasty and unwise so-called 'big-box ban', Mr Warren's response is predictable.
Perhaps, he has another remedy in mind for the city's major revenue shortfall, which is partly due to loss of sales taxes from big box stores, including Wal-Mart, itself the largest single sales tax source?

As president of the Northwest Washington Central Labor Council, Warren wields inordinate power, not only over the 85% of City employees who are members of nine different unions, but over elected officials dependent upon the support of organized labor.
Is he sending a 'message', designed to influence officials and candidates during the upcoming elections?
After all, union bosses are sometimes noted for their strong-arm tactics, as I personally experienced after my opposition to both the so-called 'living wage' ordinance, the 2004 budget shenanigans and the big-box ban.
Those tactics didn't work very well on me, but they did on 4 or 5 Council members, and the mayor at the time.

And, you know 4 of those Council members are still around.
[drumroll, please]
rat-a-tat: Louise Bjornson
rat-a-tat-tat: Gene Knutson
rat-a-tat-tat-tat: Barbara Ryan
rat-a-tat-tat-tat-tat: Terry Bornemann

Of course, that's not to say other Council members, Mayors, mayor-wannabe's, or candidates couldn't be similarly 'persuaded' by Mr Warren to do his bidding, either

Hey, no one blames Mr Warren for doing what he is paid to do, but he is not an official who is elected by the public, or necessarily represents them as a first priority.

Maybe Warren does have a plan to reduce the substantial union contract wages & benefits that have been negotiated over time?
Something like that would certainly help the budget situation more than any other responsible act the City could take.
That's because the great majority of the General Fund is comprised of mainly employee wages & benefits.
Much as we might like to shift those monies around, there are laws and mandatory government accounting practices that prevent us from doing so.
Sometimes, it is possible to borrow from Peter to pay Paul. But Peter needs to be paid back. And, what about Mary?

I cannot imagine anyone doubting that the City's employees are its main asset!
That is why a voluntary wage & benefit reduction plan would respond best to the short-term problem, as well as long-term sustainability.
But, I'm not holding my breath for that to happen.
More likely, Mr Warren and his ilk will push to have any budget cutting happen 'somewhere else', even though there is 'no where else' that can be legitimately cut - to the extent needed.

And, I seriously doubt the City has ANY plans to sell real estate to big box stores.
That is simply ludicrous and designed to appeal to emotion, not facts.
Besides, most available property is not owned by the City, but by private interests.

The fact is, the big-boxes are already here, and have been here for some years.
Plus, I have heard NOTHING about totally rescinding big-box regulations, and Mr Warren should know that, if he doesn't already.

One other point, this article purports to be about so-called 'big-boxes, but that doesn't wash.
It IS about Wal-Mart, pure & simple, as it has been from the start.
Expanding Wal-Mart to 'big-boxes' was necessary for the legal cover needed to 'legitimize' the unwise measure initially approved by the City Council.

Citizens may wish to understand that our local 'big-boxes' also include Target, Costco, Home Depot, Lowe's, Fred Meyer and others, of course excluding the now defunct Circuit City and any others that may not yet survive these tough economic times.
But, methinks Mr Warren would really rather not open this discussion more widely, preferring instead to stonewall wage & benefit gains already achieved.

And, don't forget those 'big-box' bragging rights, either!
Hey, did you know Bellingham was the first city in Washington to adopt an anti-Wal-Mart -er, 'Big-Box' - ordinance?

One last question; If Warren feels so good about Costco, why include them in the 'Big-Box' ban?
Is it Catch-22 time?

This is the time of year when the heat starts getting turned up on the local government griddle!
Good luck, Council.
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WAL-MART: Hate to Say 'I Told You So', but....

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My post on September 4, 2007, Big Box Theory: Attacking Mall-Wart, has proven to be anticipatory of a future reality.
And, that reality is now, if it is not already too late.
I hope it's not.

There are lots of things that people love to hate; bigness, low wages & benefits, lack of choice, high prices, brutal competition, cheap imports, large parking lots, strong central control, crowds of boorish shoppers, and the like.
Also, the opposites of many of the above.

Point is, you can't please everybody anywhere near all the time.
But having a relatively inexpensive place to shop for essentials, and maybe a few extras, is not inherently a bad thing.
In fact, it can be a very good thing for many, particularly in hard times, like these.

WAL-MART is now a $400 Billion company, every year - if not the largest, close to it.
And, it's culture and practices have changed somewhat, in response to both criticism and market pressure.
There are early indications that WAL-MART can't be everything to everybody, and must choose its strengths more carefully.
This has even begun to attract other business to locate close by to fill the lacks, while taking advantage of of the large volume of customers that WAL-MART regularly draws.
Big chains, like Target, for example.
If that trend were to continue we might literally begin to have malls of Big Boxes.
Municipalities might even be willing to plan for that to happen.
What a concept!
Better mass transit, land use and common public amenities.
Less sprawl, wandering traffic and congestion.

But, time will tell, as it always does.
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So, back to the present, so we can revisit the past.
With that in mind, the Herald editorial of Saturday, May. 30, 2009 is reprinted below:

Mayor offers end to store-size mistake

It's time for the city of Bellingham to rescind its law limiting the size of stores.
Bellingham Mayor Dan Pike has proposed a plan to ease the city's ban on allowing stores larger than 90,000 square feet, as long as the buildings are developed in step with environmentally friendly building standards and only in the part of town where large retailing already exists. The City Council will take up the mayor's idea in June.

The City Council has limited the size of stores to 90,000 square feet and limited expansion of stores that are already larger than that. The limit was put into place after Wal-Mart expressed interest in expanding its Meridian Street store to a "Super Wal-Mart." The larger stores including full grocery offerings.

City officials, apparently upset about Wal-Mart's practices as an international conglomerate, decided to take a stand, even if their stand flew in the face of all of the hard work they had done to control and direct growth in our community.

The current location of Wal-Mart is the best location for Wal-Mart. If the company is going to put a "Super Wal-Mart" in our community it should be built where all of our county's major retailing, and the traffic that goes with it, is already located. Forcing Wal-Mart and other stories outside of Bellingham flies in the face of growth management efforts in our community.

Meanwhile the city's ordinance had unintended consequences when Costco also wanted to expand slightly. We are not aware that City Council members have anything against Issaquah-based Costco's retailing practices. But once the law was in place limiting Wal-Mart, it would have looked bad if the city made an exception for Costco. Such an exception would have exposed the store-size limit for what it is, an unfair restraint of trade aimed solely at a particular business.

If any city official tries to deny their intention was to limit Wal-Mart, ask them why they did not object to the creation of the Bakerview Fred Meyer, which is larger than 90,000 square feet, or a strip mall along Bakerview Road that is much bigger than 90,000 square feet when considered as a whole.

We are hopeful that enough time has passed for the council to consider the mayor's proposed changes to the store-size rules without council members feeling as if they have abandoned their convictions. What the mayor is proposing is what should have always been in place.

Big box stores should be limited by zoning to certain parts of the city. Certainly no one wants a giant store built in a historic neighborhood. The current areas along Meridian Street and Bakerview Road are the proper places for such development.
And requiring any new building to follow environmentally sensitive rules is common sense, whether for an expansion or an entire new store.

We hope the council takes the mayor's proposal seriously and moves quickly to modify the store-size rules. So far the council has been lucky. Wal-Mart, Costco and others have not started building new, bigger stores in some other location - such as in Ferndale or on the Lummi Indian Reservation.

But eventually , if Bellingham's leaders don't change their policy , they will force out these businesses and create the worst possible scenario - a big loss to the city's tax revenues and unsightly sprawl in parts of the county where it should not be.

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Bravo, to the Herald and its editorial board for revisiting this issue, especially, in the cool light of projected City budget deficits!
And, do not doubt that the clear and serious threat to City revenue streams is the real reason for any reconsideration, despite all the other nice sounding rationale.
Once the financial dots are connected, most issues can be seen with more clarity.
And, that is without corrective lenses to combat political myopia, astigmatism, sensitivity to light or night blindness.
But, there is no simple answer for those who prefer to keep their eyes closed, or receptive only to what they want to see.
That's why 'wake-up' calls are sometimes necessary.
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Big Box Theory: Attacking Mall-Wart

I've cooled off a little since losing this battle, but not enough to forget the lasting after effects that will likely come to haunt us in the years to come.

This was a missed opportunity, pure and simple. And, collateral damage was done to 'Big Box' stores that happened NOT to be named Wal-Mart, like Costco, a thriving business headquartered in Washington, with a proud record of living wages and benefits, that also demonstrates efficiency in its business practices.

Since the Big Box debacle, I came across a book, titled 'The Wal-Mart Effect', written by Charles Fishman, a former business reporter for the Washington Post. Fishman had been curious about Wal-Mart and decided to investigate, but was stone-walled by that company's habitual secrecy about its operations.
That just intrigued him more, so he spent the next 2+ years interviewing Wal-Mart suppliers, competitors, former employees and members of communities who had experienced impacts from Wal-Mart coming to town.
The results were fascinating! Some were as you might expect, others cutting edge know-how, particularly in inventory control and supply chain logistics.

All these results were motivated -spawned and continuously reinforced- by Sam Walton's no-nonsense drive to succeed in a very competitive environment. Nothing wrong with that! Good old American values, born of necessity and free markets.

But relentless emphasis on a bare-bones operations, coupled with phenomenal growth of the company changes things, as has happened with Wal-Mart.
The company is now so huge that when it sneezes, the economy catches a cold!
There is now a Wal-Mart for every 74,000 US citizens, which means room for further rapid expansion is already severely cramped. They are literally bigger than the next 10 corporations combined!

Anyway, Fishman's book is about the most complete and authoritative that I have yet to come across.
It's conclusion is that Wal-Mart has a huge effect, whether for good or bad, but that this same effect can be used to help communities better deal with Wal-Mart to get changes considered beneficial to them.
Some communities and other organizations are already doing this.

Just a few examples:

NRDC persuaded Wal-Mart to switch to selling energy efficient light bulbs, and already this has become accepted practice, which has also saved Wal-Mart 30% on its electric bills.

Wal-Mart was persuaded to use bio-diesel fuel for its enormous fleet of trucks, saving 20% in those costs.

Other communities have been able to change Wal-Mart's design standards and marketing practices.

Here, in the Pacific Northwest, we might insist that Wal-Mart stop selling Chilean farmed salmon, and substitute wild salmon instead. That might also get some other stores to do the same thing.

We might insist that Wal-Mart carry a substantial proportion of its farm products from local sources.

The point is, if Wal-Mart wants to expand, we can have the leverage to negotiate some changes in return.
If we don't use that leverage, we lose it. And, if we use it and win, that sets a new precedent for other areas to also follow as they will.

That is also Fishman's point. The Wal-Mart Effect cuts both ways. And, we can use the Wal-Mart Effect to our advantage, but only if get them to the table!

Big Box sprawl is a problem, but it is already with us. Running Wal-Mart off to the Lummi Reservation will likely have some very serious repercussions, that will be felt in the years to come. Maybe, even after those who were responsible are safely out of office. That's the way history happens.

Watch out for what you ask for, because you might get it!

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Whatcom Independent Guest Editorial - Circa February 2007:

Every City Council member supports the goals embodied in our Comprehensive Plan.
Each especially supports the twin concepts of a strong local economy - fueled by good jobs, and compact well-planned growth that alleviates congestion.

Five current Council members believe that the presence and proliferation of Big Box stores constitutes such a serious problem that they consider it their duty to ‘resolve it’ by force, with a Council directed mandate, even though no economic impact analysis has been done, or required. I do not agree with this irresponsible approach, and neither do many others, especially taxpayers!

First, we need to define the ‘problem’ that needs alleviating then try to resolve it in a reasonable way that incorporates the input of citizens, businesses and others impacted. If local government really cares about what people want and need, it will not ignore them! Why not involve other regional jurisdictions whose help and cooperation will be needed for a broader and more effective action plan that will inure to the entire community's overall benefit?

Better solutions to complex problems are always reached by full and fair discussion involving many stakeholders, not just a few. The Big Box ‘debate’, while useful, has turned out to be a sham that drastically over-simplifies both the ‘problem’ and the ‘solution’. It was a Ready, Fire, Aim approach, except the conclusion was decided before the ‘debate’ began.

The ‘Big-Box issue’ was really a 'spontaneous arising' that exactly coincided with WAL-MART's plans to add a 40,000 SF grocery addition to its existing 151,000 SF store, both located in an area specifically zoned for that purpose. This exact area was annexed by the City because developed Commercial zones return revenues that more than 'pay their way', just as residential developments do not.

The Big-Box measure was initiated and pushed through the City Council by organized labor as a means to continue –locally- its much broader attack on WAL-MART. Of course, the idea had to also be cloaked in a few Comp Plan arguments to give it better sales appeal to the public, as well as cover for its supporters. No one complained about any of WAL-MART’s Big-Box rivals, like Fred Meyers, Costco, Target, Home Depot, K-Mart, Sears, Lowe’s, Albertson’s, or others that are also directly affected by this ban.

Positive impacts are claimed, like ‘support of local business' and 'alleviating unsightly sprawl and congestion'. These problems already exist and won’t likely be much helped by the ban. But, looking at the assumed positives is only half the issue.
What about the adverse impacts on economic development that will happen as a result of Bellingham's action?

Traffic problems exist because the area has already been zoned and developed for concentrated commercial business. These problems will continue wherever WAL-MART and any other big-boxes are, or where they decide to locate.

Citizens, particularly those with limited financial means, prefer shopping at WAL-MART and other big-box discount stores. Are their voices being heard?

Significant fiscal impacts on the City budget are very likely, rising over time. An estimated $3.5 million per year in sales & B&O taxes is currently being paid to the City from big-boxes of over 90,000 SF alone, about 14% of the total. This is equivalent to over 20% in City property taxes. For all stores of over 60,000 SF, the amount rises to $4.3 million.

Some type of financial analysis is absolutely necessary in order to even imagine the potential impacts of the Big-Box ban. I am astounded and appalled at the dismissive attitude that Council has shown regarding our community's overall best financial interest! Which future Council -or Mayor- will want to face this kind of deficit scenario?

Bellis Fair Mall illustrates the economic benefit of clustering stores together, so a single trip serves multiple purposes. Yet, this Big-Box ban also impacts the Mall. Bellis Fair has legitimate concerns about even expanding its existing stores. This mall has been a growing regional center for 20 years, helping to draw other Big-Box stores as well. Customers come from miles around. Big-Boxes already exist, and clustering them makes more sense than sprawling them!

If the Council is trying to address the cumulative actions of the past, isn't a regional approach necessary? We don't have to look far for examples of competing jurisdictions, like the scenario involving Mt Vernon and Burlington in Skagit County.

Where is the balance in this discussion? What is the urgency? Is the ban a silver bullet?

Why disregard the Planning Commission recommendations to study this issue further, without extending the moratorium?

Why exclude the business community and trained economists in the discussion?

Council seems to have acted as the sole 'decider' on this issue, using WMD [Words Meant to Deceive] to justify –or cloak- its action. We need more election year sunshine on this matter!