(OPE-L) Wal-Marx Invades, and Mexico Gladly Surrenders

From: gerald_a_levy (gerald_a_levy@MSN.COM)
Date: Sat Dec 06 2003 - 11:58:17 EST

An example of how a corporation that specializes in retail sales
and distribution, rather than production,  has become a *huge*
international corporation (see article).

In solidarity, Jerry

PS: Paris Hilton, heir to the Hilton Hotel fortune and a socialite
from Beverly Hills, recently asked on the new TV show "The Simple
Life" (FOX network) "Walmart, what's that, do they like make
walls there?" (!).

December 6, 2003
Wal-Mart Invades, and Mexico Gladly Surrenders

MEXICO CITY, Dec. 5 - The company that ate America is now swallowing

Wal-Mart, the biggest corporation in the United States, is already the
biggest private employer in Mexico, with 100,164 workers on its
here as of last week. Last year, when it gained its No. 1 status in
employment, it created about 8,000 new positions - nearly half the
permanent new jobs in this struggling country.

Wal-Mart's power is changing Mexico in the same way it changed the
economic landscape of the United States, and with the same formula:
prices relentlessly, pump up productivity, pay low wages, ban unions,
give suppliers the tightest possible profit margins and sell
under the sun for less than the guy next door.

"This is the game that Wal-Mart has played in the United States," said
Diana Farrell, director of McKinsey Global Institute, a policy
group run by the international business consultancy McKinsey &
"They've changed the name of the game in Mexico."

In the United States and Western Europe, Wal-Mart has been accused of
driving down wages, introducing cut-throat business practices and
bankrupting local companies.

But in Mexico's dreary economy, foreign investment, especially
investment, is about the only bright light, and many Mexicans know it.
Cries of economic and cultural imperialism, rampant 10 years ago, when
the North American Free Trade Agreement took hold, are more muted now.

"Part of globalization is adopting the methods and customs of another
country," said Francisco Rivero, an economic analyst in Mexico City.

Though it came to this country only 12 years ago, Wal-Mart is doing
business - closing in on $11 billion a year - than the entire tourism
industry. Wal-Mart sells $6 billion worth of food a year, more than
anyone else in Mexico. In fact, it sells more of almost everything
almost anyone. Economists say its price cuts actually drive down the
country's rate of inflation.

Last year, 585 million people - nearly six times the population of
Mexico - passed through its check-out lanes. With 633 outlets,
Wal-Mart's Mexican operations are by far the biggest outside the

Its sales represent about 2 percent of Mexico's gross domestic
product -
almost the same as in the United States. Analysts say it now controls
something approaching 30 percent of all supermarket food sales in
Mexico, and about 6 percent of all retail sales - also about the same
in the United States.

Though Wal-Mart is not the only game in town, it is the biggest, and
bigness is crushing its supermarket competitors. Its methods are
creating "a radical change" in the way business is done here, Ms.
Farrell said.

"Wal-Mart has changed the retail market in Mexico," said Raúl
a Wal-Mart vice president in Mexico City. "Every store manager has
authority to lower prices if he sees the store across the street
for less. If you have to lower the price, you lower it."

For Mexicans trying to compete with Wal-Mart, a new business culture
emerging, based on those hard-nosed, sometimes cut-throat tactics. For
Mexicans with money to spend, a new consumer culture is rising, along
with the sales of McDonald's hamburgers and Domino's pizzas (the three
favorite toppings here are jalapeño peppers, ham and pineapple).

The marketplace is making Mexico look more like the United States,
it or not.

"From the commercial point of view, it's a total convergence," said
de la Calle, who was a chief Nafta negotiator. "If you go to a
supermarket in Mexico, the type of products, the service they give
it's just like you find in the United States or Canada, in terms of
variety, quality and price."

Wal-Mart shoppers here have become attuned to the company's smiley-
logo and its mantra of "Everyday Low Prices." At a Mexico City
center, Plaza Tepeyac, José Carrillo, 36, wended his way through the
aisles on a weekday morning, admiring how neatly the merchandise was

"Sometimes I go to the street markets and sometimes I come here," said
Mr. Carrillo, an administrative aide, who lives three blocks from a
Wal-Mart. "Sure, I know Wal-Mart is a multinational company, but what
are you going to do? That's globalization, and Mexico has to play the
game, right? Maybe some of the profit leaves Mexico, but Mexico gets
back some foreign investment, right? That's how things work. It
matter to me if I'm buying from a multinational company, as long as
give me what I want."

Wal-Mart opened its first American store in 1962 and started its
international expansion in 1991, when it began to build and buy its
into Mexico. Half its Mexican operations now are here in the capital,
the other half in cities across the country, from Tijuana to Cancún.

Its 81 Wal-Mart stores and 52 Sam's Club outlets now ring up close to
billion a year. Annual sales at its Superama and Bodega supermarkets
approach $4 billion. Wal-Mart also runs 52 Suburbia department stores
and 267 Vips restaurants, with close to $1 billion a year in sales.

Wal-Mart has also become the largest retailer in Canada, and has
in Argentina, Brazil, Germany, South Korea, Puerto Rico and Britain.
global expansion has helped make it the world's biggest company in
of revenues, with $245 billion in sales last year - a sum greater than
the economies of all but 30 of the world's nations. Nowhere outside
United States are its stores as numerous as in Mexico, where the scope
and scale of its operations have grown to resemble its dominion in the
United States.

Wal-Mart says that it treats its Mexican employees so well that the
workers want no union, and that it pays its workers better than do its
Mexican competitors.

However, in the United States, a unionized supermarket worker makes,
average, about $19 an hour. At Wal-Mart, where there are no unions,
worker makes about $9 an hour. In Mexico, for a newly hired Wal-Mart
cashier, the pay stub reads about $1.50 a hour.
--- End forwarded message ---

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