PART 1 OF 2
CHAPTER 5
While Sol was stepping up the campaign against Wal-Mart, the company's normally cool and calculating top executives were scurrying around like mice in a maze. They could hardly believe the reports coming in from the field. Dismayed by their disarray, their hands-on CEO assembled them for a briefing. He commenced soberly.
"Our great company is under a domestic attack that could have global repercussions, and we must deal with it now. In little more than a week, the balance of power has begun to tilt toward our enemies. There are picketers at two hundred of our stores, and though they can't get close to the doors because of private property restrictions, they're sufficiently intrusive that sales are suffering. Customers just don't want to endure the hassle of the chanting, the police presence, and the surveillance cameras.
"We have indications that the picket organizers are planning similar obstructions in front of more stores shortly. In the five areas most under assault, those despicably named storefronts -- Wal-Fart, Wal-Part, etc. -- are spreading the usual union slander about our company and picking up additional numbers of ex-associates who will no doubt feed them more grist for their noxious mills. Our SWAT teams in these five areas, including the one right here in Bentonville, where our revered Sam Walton started his first low-priced store, report that they can't get a handle on what's happening. Because no existing unions appear to be involved, all our teams can do is to try to infiltrate the meetings of the shadow opposition and the traitorous associates who've gone over to them.
"As you know, some important shareholders have been calling to demand that we raise wages and improve benefits. The timing of these calls indicates coordination, particularly since institutional shareholders -- mutual funds and pension funds -- have also transmitted their demands in writing. One retired billionaire after another has taken out an ad or given a news conference to brag about how successful his business was even with -- or because of -- high wages and good benefits for the workers, and to showcase ex-associates with tear-jerking personal stories that come across as very believable.
"Small stores in the vicinity of our discount havens are announcing forthcoming sales on our best-selling products at prices lower than ours, which also suggests close coordination in those five locations. The mom-and-pop businesses we replaced when we located in their backyard are coming back to bite us. Don't underestimate their local political power, especially given their backing. Yes, we have identified the ringleader. He is the patron-saint-turned-devil of the wholesale- retail discount store movement. Sol Price knows our vulnerable points along the whole chain of supply. He knows our margins, our spoilage. He knows how we think. He knows we're so big that we have few influential allies except for the politicians we take care of. He knows all we have are millions of satisfied customers. When he called me urging a cardcheck, he didn't say that he was the force behind this disruptive drive, but the trail leads directly back to him, even though we don't know the details."
"Sol Price?" exclaimed the executives around the table in a chorus of alarm.
"That man is a legend for his shrewdness and tenacity," said an executive vice-president. "And he can't be dismissed as a radical or a union boss."
CEO Clott tried to calm the increasingly distressed executives. He announced a week of intensive intelligence gathering, along with the destruction of sensitive documents and e-mails on advice of counsel, under his daily direction. "Then we'll be in a position to present the board of directors with a comprehensive plan of action," he said authoritatively. "Meanwhile, let's pay a visit to the Bentonville store to see what we can find out for ourselves. I'll also commission a poll to gauge the effect of this unprecedented campaign on public opinion and on Wal-Mart customers themselves. It's essential to know where we stand."
***
In the midst of all the core group activity, Warren was doing a superb job running the Secretariat and was also taking an active role in various Redirections, but he wanted to do more. He decided to deliver a blistering denunciation of the excessive pay of the CEOs and executives of the Fortune 500. He had spoken out before in measured terms, asserting that these huge compensation packages blinded executives to what was best for shareholders and the business in general, created a moral authority gap with workers, and produced incentives to engage in creative accounting that inflated profits and misled investors. Stock options for the bosses were particular tools of mischief. And they all knew that their pay packages were self-determined and would be rubber-stamped by their board members, who in turn were rewarded with large per diems and other payola. Year after year executive pay kept outstripping worker wages, economic growth, company growth, or any other indicator under the mother sun. A Fortune magazine cover story declared that nothing could stop this escalation, though the editors deeply deplored the greed at the top.
Warren begged to differ with Fortune's prediction, and he did so in an address before the National Cattlemen's Convention in Omaha's cavernous public arena. After laying out the red meat of his argument with calm precision and logic, he concluded with a stirring peroration. "We're not waiting for Washington or the White House or the Securities and Exchange Commission to do the job, because they are under the influence, and I'm not talking about booze. We're going to mobilize the mutual funds, the pension trusts, and the individual investors who own these corporations. They're going to demand shareholder approval of pay packages and accountability from the executives who are supposed to be working for them, not the other way around. Together, we've got the financial muscle to make it happen, and happen fast, you hear?"
They heard. Cattlemen are conservative people from conservative states working in a conservative business that puts steaks on dining room tables, but they had always felt manipulated by the "suits" in the pricing pits of Chicago and the skyscrapers of New York, by the giant middlemen and the giant supermarkets with their huge markups, by all the rich white-collar guys who never had to endure the grit and grime of raising livestock. Now the richest man in America was proposing a plan to put wheels on the wheels and "steer" to victory -- not just words, action! They roared their approval in a ten-minute standing ovation. The press was dumbfounded by the reaction.
As he left the convention. even the supremely confident Warren wondered if he had bitten off more than he could chew. He rarely, if ever, forecast his moves or predicted victory, but in this case he felt he had to put himself on the spot to provoke the burst of adrenaline that would be required of him and his colleagues. He also knew that with all the debate and excitement generated by the Redirections, executives were likely to be on the defensive, and that the vast majority of investors, including the institutions, would be supportive. Still, what had to be done had never been done before.
In his methodical way, Warren laid out his design for action. As CEO of a major holding company, he had already set the example with his annual salary of $350,000 and no stock options or bonuses. His company was the marvel of the investment world, with stock valued at $5,000 per share in 1986 now soaring to nearly $100,000 per share -- the highest by far on the New York Stock Exchange. From this pedestal, Warren served on the boards of several large companies, including the Washington Post/Newsweek corporation. He knew he could swing these companies, although he'd have to persuade the Post's dominant family, which controlled the voting shares on such matters. Then he'd marshal his own vast contacts and the relevant people from the core group's epicenters; set up high-level meetings with the heads of the large mutual and pension funds, the NYSE, and NASDAQ; ask Leonard to organize a demonstration of investors on Wall Street; and coordinate it all with Barry and his media network. As one big company after another fell into the fold and officially ceded investor control over executive pay, heavy publicity was likely to follow. Interlocking directorates would further the spread of investor control. The Fortune 500 would be holding their annual shareholder meetings soon, and Warren would stoke up all those securities attorneys from the pro bono talent bank to prepare resolutions calling for investor control over the pay packages of each company's top four executives. Major investors would be lined up to register their support either by signing the resolution or issuing a statement. The shareholder meetings, no matter how remote their sites, would be packed with supporters who would have good media backup from Barry as well as on-the-scene publicists. To send a political message, a resolution of support would be circulated in Congress and the larger state legislatures. State securities regulators, state attorneys general, and the White House would also be solicited for support. To implement all these objectives, Warren hired a skilled ten-person staff that he wryly referred to as "the Boiler Room."
When the plan was circulated to the core group, the first call came from Leonard. "Good news, Warren," he said with a laugh. "The CEO of the company at the top of your list is my younger brother, and I'm the major shareholder." But what really tickled Leonard's funny bone was the prospect of two hundred thousand investors surrounding the New York Stock Exchange and the major investment and brokerage houses. Warren was impressed, but not so much that he didn't ask, "How in the world are you going to get two hundred thousand investors?"
"Well, they'll be mostly small investors, of course, but with Barry's media and Ross's credibility groups, especially retired veterans and business clubs like Rotary and Kiwanis, we can do it. I'd say it'll take about two months -- a couple of weeks after Maui Four."
''I'm relying on you, Leonard," said an amazed Warren.
***
Out in California, a rejuvenated Warren Beatty was reviewing the latest draft of his formal announcement speech for governor. Once again, Dick Goodwin showed that he hadn't lost his touch. The address was magisterial, studded with historical allusions that legitimized the fundamental changes in power, wealth, income, and priorities so logically and factually laid out in scintillating paragraph after paragraph. Fundamental democratic values undergirded every sentence and idea as proof against distortions, red-baiting, and right-wing casuistry. Goodwin deployed quotations from America's best political leaders of the past, and from revered conservative economists like Adam Smith, Herbert Simon, Friedrich Hayek, and Milton Friedman, to deflect anticipated attacks from the corporatists. He made the beauties of California's geography the focus of the announcement and wove otherwise dry facts about devastating and cruel conditions into vibrant and sonorous rhetoric. But what most enthralled Warren about the speech was its seamless portrayal of his transition from movie heartthrob to actor/writer/director of political movies like Reds and Bulworth to passionate spokesman on crucial issues facing the country, and finally to crusading politician. As he sent back his edits and comments, he reflected that this was his best script yet. How on earth could the Democrats have failed to enlist Dick Goodwin in their battle for the White House in 2004? Did anyone remember any of John Kerry's speeches or campaign themes that year, except possibly his silencing of John Edwards' "two Americas" presentation on poverty and moral obligation, which had galvanized audiences during the primary season?
The next question was where and how to deliver his speech. Advised by the canny public interest lawyer Harvey Rosenfield, he decided to give it in four locations in one day, starting out in Los Angeles with his family on the steps of a decrepit branch library in South Central, going on alone to San Diego State University and then the Imperial Valley, where he'd be surrounded by farmworkers who harvested a large portion of the country's fruits and vegetables, and ending up at the Presidio on San Francisco Bay. He'd have to use a private jet and spend some of his own money, but for once it was worth it. He'd have a primary fight with three other Democratic candidates, but he was confident that the voting public would relish a showdown between him and Arnold. As launch time approached, Warren felt a great load lifting from his shoulders. Years of doubt, years of playing surrogate politician, years of hesitation about himself were washing away.
Ever since his speech to the Assembly, he'd been boning up on conditions in the state, not just the usual ones the press asked about, but all the needs government was meant to address and was ignoring. He'd consulted with specialists on children and schools; on sustainability and local economic development; on poverty, healthcare, immigration, tax equity, and corporate welfare; on land, water, and air utilization; on slums and sprawl; on law enforcement from the streets to the business suites; on the responsibilities of the wealthy to the people of California. When announcement day came, he exceeded the expectations of the media with his spectacular address, his refusal to pander, and his demonstration of resolve. His former days of womanizing were alluded to, of course, but what else was new -- and compared to Arnold the Stud? With the billionaire buses and the reinstatement of the old tax on the wealthy fresh in everyone's mind, Warren came across as both a man of action and a man of his word. Initial polls registered a 63-percent approval rating for the speech, and one columnist wrote that the race was Warren's to lose. Back home with Annette and the children, a tired but happy man planned his next move.
***
In weeks three and four of Maui Month Two, the rumble against the corporate supremacists and their political allies grew louder by the day, like the approaching hoof beats of a cavalry charge. The mass media knew that something was afoot, but they couldn't figure out whether it was just some eccentric rich guys on a justice lark or a bigger, more coordinated movement. The People's Chamber of Commerce was challenging its reactionary larger counterparts to specific debates at the National Press Club, and in the process defining what progressive businesses stood for -- unheard of in Washington, DC, where trade associations were supposed to collude, not debate. The lunchtime demonstrations continued to grow in number and spread to new locations. Two prominent retired CEOs gave tell-all valedictory speeches at the Press Club, leaving the real estate and agribusiness industries reeling. Even the business-friendly justice Department bestirred itself to announce that it would investigate the charges, and several members of Congress urged the attorney general to do so with dispatch.
Jerome Kohlberg, Warren's retired billionaire investment banker from the Hamptons, launched Operation Shakeup with a press conference on electoral reform, releasing a white paper naming the one hundred worst abusers in the area of campaign financing, and singling out a number of donations he claimed were illegal under federal law. He tied these sleazy contributions to the quid pro quo politicians who accepted them, raising intimations of bribery. An uproar ensued, but what could you do to a retired billionaire who'd preceded the press conference with fact-filled ads on radio and television and in the major New York newspapers? He concluded by saying that all campaign television ads under five minutes should be banned, citing the views of advertising guru John O'Toole, former president and chairman of Foote, Cone and Belding, who once worked for Richard Nixon's campaign and had written a book called The Trouble with Advertising. This blast caused Madison Avenue to go ape and unleash a volley of slashing attack ads in response. Kohlberg promptly fired back.
Bernard hit more media pay dirt with his own press conference on corporate commercialism in our schools. As a prelude to his project to establish after-school Egalitarian Clubs, he read out his roll call of the worst offenders, who replied with a chorus of indignant protestations of innocence, claiming they were just giving the kids what they wanted. "Yes," rejoined Bernard, "like junk food, junk television programming in the classroom, censored teachers, and an excessively narrow vocational curriculum."
Meanwhile, in the old Progressive tradition of the late nineteenth century, the Promotions Project began sending lecturers around the country to speak to civic groups and local chapters of the PCC. These were all people with experience in matters of social and economic justice, and with reputations sufficient to draw interested audiences. Promotions advertised their appearances well and made sure they were featured prominently in the local media. Their topics were diverse, but they generally started with some hot local issue and then linked it to broader themes of government of, by, and for the people, equal justice under the law, and the other concerns being addressed by one or more of the Redirections.
The radio attack dogs were baffled by the white-hot controversies erupting everywhere over real abuses of power. Their big advertisers kept calling to egg them on -- but on to what, or whom? They were like drooling bloodhounds straining at the leash to hunt down their quarry, but they'd lost their sense of smell. Sure, they spewed their daily denunciations of the lunchtime rallies, had a field day with the "Fighting Zulus" caper, tore into Joe's small claims litigation, snickered over Warren Beatty's alleged dalliances, and rushed to defend Wal-Mart, calling the giant retailer "the best anti-poverty program in American history." But they couldn't make any ism stick, couldn't cry conspiracy, couldn't plausibly tar the assorted billionaire elders with the usual labels: fags, atheists, child killers, flag desecrators, feminazis, socialists, communists, anarchists, French, national nannies, cop-haters, peaceniks, disarmers (gun controllers), traitors, the blame-America-first crowd. Epithet-starved, they turned to management for advice.
The media barons who syndicated their programs had noticed a pattern of mergers and acquisitions by Barry Diller -- unusual activity, and unusually fast, even for him. They'd also noticed that the strange goings-on of the past month were getting more than customary airtime on his existing brace of radio and TV stations. Of more concern was the steady daily decline in audience ratings for their bombastic right-wing loudmouths, and the slow but steady rise in ratings for Diller's stations. But there was no hard evidence that anything more was involved than the man's notorious idiosyncrasies, and all they could do was urge the talk show yappers to stay hot on the trail and ask their listeners for leads. "Something's starting to happen," said one CEO in an e-mail to Bush Bimbaugh, "and we damn well better find out what it is before it gets done happening."
***
On the morning of the hastily scheduled meeting of the Wal-Mart board of directors. the company's top six executives gathered over an early breakfast in their war room. On the long wall was an elaborate mural of the Wal-Mart Colossus bestriding the globe, but the Big Six were not admiring the artwork. They'd done their best to digest the huge volume of intelligence and anecdotal reports they'd received from their operatives, and they'd crafted their presentation carefully, but they were still nervous. They had two plans, one if the board simply went along with the CEO's recommendations, and the other if there was a board rebellion. Either way, they all knew events were accelerating so fast that a decision had to be made by the end of the day. The company had been in hot water before, over local dustups that were sometimes widely publicized but could be easily defused by an apology and a little cosmetic corrective action. This was drastically different. With stiff upper lips, they raised and clicked their customary glasses of fresh-squeezed orange juice, chugalugged, and walked down to the board conference room for pre-meeting pleasantries.
The board members seemed unusually subdued. A few of them were conversing quietly, but there was none of the standard small talk about golf and grandchildren. For a week or more, they had all been under unprecedented pressure from shareholders, mutual funds, billionaire friends, and badgering reporters inquiring about their stance on Wal-Mart's labor practices, and even about their own personal pay and perks. Some of them had seen their names on placards at the lunchtime rallies in the cities where they worked. And then there were the websites, those awful blogs with no sense of propriety and no barriers to rudeness.
CEO Clott brought the meeting to order at 9:00 a.m. sharp. He asked everyone to turn off their cell phones and said that the room had recently been debugged and that no staff would be allowed to enter until lunch. Then he began.
"Ladies and gentlemen, I wish to preface my remarks by assuring you that our intelligence capabilities are close to total. Little of what our shadowy adversary is doing escapes us. We have a direct line into its moves in the five targeted stores and around the country. What you are about to hear is not supposition and rumor. What you are about to hear is fact, reality, the adversary's forward plan of attack. True, we do not have the whole story, but we know enough to go toe to toe with this adversary on the ground.
"We are entering a period of grave uncertainty. Already our company's stock has lost ten percent of its value. That translates into billions of dollars and does not augur well for our management incentive program. Of course, stock can go back up after a company weathers a crisis, and more than a few large corporations have done just that. But what we are confronting is not just a major crisis, and not a steady-state one at that, such as a major product recall with known parameters. We are facing the most sophisticated assault on a company's wage and benefits policy ever. Our in-house Wal-Mart historian finds nothing comparable, nothing remotely on this scare, in any of our prior unionization confrontations, or indeed in any such confrontations in our nation's past.
"Many of us have been on the receiving end of calls from Sol Price. You know what a formidable adversary he can be, with his knowledge, his labor relations record, and his bull terrier personality. He knows the nerve points of our business and the nature of our customer base. Already the storefronts are spreading lies about the indirect costs War-Mart passes on to the taxpayers, small businesses, workers whose wages are depressed by our policies, workers who lose their jobs as a result of the China price, and on and on. His people are even delving into alleged differences between our shelf prices and our register prices. Moreover, given our labor turnover, there are a lot of grievances and allegations of wrongdoing circulating, and the storefronts are collecting all of them. The picketing at two hundred Supercenters is depressing sales because of the noise and ruckus. Sol Price has agitated a substantial part of our shareholder base, which has alarmed the investment advisory fellows in New York. And his very rich cohorts are all over us with squeeze plays that few besides people like us can understand. Particularly worrisome is that all these initiatives are being developed as models to be applied in every corner of the country that our stores service.
"At the five targeted stores, the number of our associates signing up to be the nucleus of the union organizing drive is reaching a critical mass. Imagine, Price's people are offering free union membership for three years, no dues at all, zero! Unlike past feeble and ultimately futile attempts by a few unions, this invasion has limitless resources, talent, and business acumen at its disposal. Price's SWAT teams, though not impenetrable, are producing more than a little anxiety among our Wal-Mart SWAT teams in the five localities. Our teams know how to quash budding union drives led by two or three local organizers who don't have the backing or the experience to thwart us, but they aren't trained to deal with guys their own size, so to speak.
"As if all that weren't bad enough, there are new blasts in the chute. Next week a national advertising buy will sharply compare how we're required to treat our associates across the Atlantic under various European labor laws -- decent wages, paid vacations, unionizing rights, pensions, childcare, family medical leave -- to how our stateside workers are faring. We have advance copies of these ads, and they are simply devastating, making our wonderful company look downright unpatriotic. We also have advance notice of a video campaign showing how our Chinese suppliers mistreat their workers, and how we allegedly coerce our domestic suppliers to close down and move to China at the expense of their loyal US workers, some of them military veterans. Both campaigns are pitched to the mass media, the investment community, the Congress, and the state legislatures. For the time being, they've written off the White House, but probably not for long.
"I don't want to sound too downbeat, but we have to face the bad news. On the other hand, we are not without resources and talent of our own. Over the last several years we have waged a successful fight against the unions. Not one Wal-Mart has been unionized, nor has there even been a majority sign-up of our associates, with the exception of one meat department that has since, shall we say, been discontinued. So permit your management to put before you, for your close consideration, several possible strategies of counterattack.
"First, we can simply hunker down and wait them out. Sure, they may cut into our sales, depress our stock a bit more, even unionize a few stores, but we can bargain in apparent good faith for a long, long time before we arrive at any labor agreements. You know what the hoops under the NLRB can be like in contested proceedings.
"Our attorneys have advised us that we can sue the storefronts and their backers for intentional interference with our economic right to conduct business, given their clear vindictiveness. However, we are a little large to gain much sympathy from the courts, not to mention the public out there -- Sprawl-Mart versus Main Street and all that -- and proving direct causation would be difficult, according to the attorneys. We might find out more through discovery, but we have good intelligence now, and besides, our opponents seem to have little to hide.
"Our economists are prepared to produce an analysis of cost increases resulting from any successful cardcheck effort, to show how many employees would have to be laid off to maintain our profit margin. If we disseminate this information widely among our workforce, our opponents may have difficulty getting a majority to sign on, even with the cardcheck.
"There is another possibility, something we haven't done very extensively to date, and that is to organize our customers into consumer associations opposed to higher prices. Our outreach department believes that with the proper inducements such associations would attract a large membership, but not a dynamic and driven one, given their ostensible purpose.
"Finally, we could go after Sol Price. Even though he appears clean, his discount stores, first out of the big box, were soon challenged by our estimable founder with his Sam's Club chain, built on Price's model but with bigger expansion resources. We could paint Sol Price as having a grudge match in his retirement. So what? most people would say, if they weren't yawning. This one has no legs. Everyone would marvel at his energy. We'd end up turning him into a sex symbol and watching him promote Viagra on TV.
"To summarize, then, with some combination of the strategies I've outlined, we can bring the onslaught against us to a protracted standstill. While our adversaries have deep pockets and can offer fired employees better jobs, free legal representation, sympathetic media, and so forth, we believe they are working within a limited time frame. To the best of our knowledge, they have not planned for the long haul. Assuming that's the case, the unanswered question is whether the resources and energies they've put into play will become self-replicating and self-sustaining. If so, waiting them out becomes a weaker option. Our company will be embroiled in constant struggle and under constant media scrutiny, a particularly troubling projection since we are not going to win all the battles at our thirty-eight hundred stores. It will become a war of attrition. It will be draining and distracting, win or lose.
"Well, ladies and gentlemen, I think that's about it, short of calling in the Marines, but maybe we should take over their PXs first." CEO Clott paused for a laugh, which was not forthcoming. "The floor is now open for your reactions and suggestions," he said, coughing into his hand.
"What would it do to Wal-Mart to pay its workers more?" asked Alicia Del Toro, a recent addition to the board. "Say at the level of Costco, which seems to be making a pretty good profit. I know Costco isn't Wal-Mart, but they're a substantial big-box discount chain."
"You're right. Costco isn't Wal-Mart and does not share our business model. When reporters ask us this question, we say that if we increased our average pay by $2.90 an hour and reduced health insurance co-payments, the cost would be equivalent to our annual profits. Next question, please."
"Excuse me, Leighton, but do you take me for a reporter? First, the extra pay is deductible, and so are the added health insurance costs. Second, a reduction in executive compensation packages would go a long way toward making up the difference, not to mention improving the morale of over a million workers. Third, you're not taking into account your constant productivity increases from having fewer and fewer associates operating ever larger Supercenters. Fourth, you're ignoring the fact that higher pay reduces employee turnover, which is astronomical -- it's as if you're running a temp agency! Fifth, have you calculated how many sales you'd lose by raising prices enough to compensate for raising wages? Not many, I suspect, but I'm sure your experts can arrive at a very precise understanding of what consequences flow from what variables. Finally, please don't talk down to us. We're not rubber stamps, you know."
More than slightly taken aback, Clott coughed into his hand again. "Forgive me if I conveyed that impression. I certainly didn't intend to. I'll have a thorough analysis done for the board within a week, also taking into account any concerns others of you may have."
"With due respect, Leighton," said Frederick Buck, an emeritus professor of economics, ''Alicia has a point, and there are other productivities to consider too, such as going to just-in-time inventory, factoring in your China price savings, and who knows what else. But why in the world didn't you have all this data in our briefing books in comprehensible fashion?"
Clott stuck his damp hand under the table. "Well, quite frankly, I didn't think we'd have to go there. I assumed that the board had the requisite confidence in management to take our recommendations. Is it the general feeling of the board that you want further information, and if so, does that mean you're reconsidering our absolute opposition to unions and cardchecks? May I see a show of hands?"
"Time out!" said Sam Sale, retired CEO of the country's largest sporting goods chain. "The question is too ambiguous. It's not, at least for me, that I want to reconsider our opposition to unions, but I do want the information as a broader basis to assess our options."
"May I have a show of hands on the rephrasing of the question?" Clott said.
All but three of the seventeen board members raised their hands, throwing the executives off script. Had Sol gotten to the board? After what seemed an interminable silence in the large conference room, the CEO composed himself. Time for plan B.
"All right, if Wal-Mart changes its present labor policies, what can we do to take the steam out of the opposition? Basically, we'll have to adopt a new business model, but in such a way as to avoid the impression that we're capitulating. We adjust price schedules to allow for across-the-board increases in wages and benefits, from starting pay up to middle management. Top management takes a small cut in compensation, and officers take a slightly larger but still modest cut, which gives us some moral stature. Instead of capping the average work week at twenty-nine hours to squeeze savings out of the payroll, we give our associates a forty-hour week. We increase the company's share of health insurance premiums, eliminate the most restrictive deductibles and exclusions, and offer normal pensions or 401(k) retirement plans. This is essentially what we're doing by law in Europe, where we're still making good profits, and it will deflect the criticism that we enjoy a taxpayer subsidy because we refer our associates to federal or state welfare services, particularly Medicaid. Then we plan a major media campaign explaining that our kinder and gentler business model will necessitate somewhat higher prices for our loyal consumers -- which isn't the case because of our productivity and China savings, though of course we can't say that.
"In presenting this alternative business model to you, I am aware that I'm proposing the most revolutionary makeover of Wal-Mart since Sam Walton launched this great company. Even to think of this kind of change is humbling, to say the least, but your votes on the last question suggest that you're prepared to contemplate it. I and my fellow executives make no recommendation. We await your response."
"Here's my question, and it's simple," said a tight-lipped Joseph Cobbler. "What would Sam do?"
"He'd get the facts," said Ken Keystone, chairman of the board. "He'd want to know."
"I agree," said Gerald Taft. "I think I speak for all of us when I say that we board members in our individual capacities have been catching hell for the past couple of weeks. Reporters, shareholders, disgruntled employees, the New York investment crowd, cranks, Wal-Mart scholars, unionists -- you name them -- are all over us. Speaking just for myself, I am a banker, and in that capacity I believe I've contributed to the board's oversight of the company and its deliberations. But I did not sign on to the board last year to be viewed as an ogre and hounded by some of my own wealthy peers, no less. Sol Price doesn't play dirty, I know, but he does play relentless. He doesn't go personal, but he puts the pressure on and turns the screws. I simply do not see light at the end of the tunnel. Does anybody here?"
"What tunnel?" objected Robert Shear, former president of Wal-Mart. "I thought we only see horizons here in Bentonville. Are we starting to lose our cool? Let's not panic. We're still the number one company in the world. We're still the greatest retail innovator in the world. Our satisfied customers vastly outnumber the forces arrayed against us, and these forces do not include prosecutors, grand juries, or judges. In my view, management should continue to monitor the situation, gather intelligence, keep the opposition off balance in this intensifying game of chess, and think anew about this novel challenge. All of us board members must go on high mental alert, and perhaps try to meet with Sol Price. You never know what you'll find out."
"What I just heard sounds to me like a modified motion to table, adjourn, and meet again soon," Clott said. Alicia Del Toro frowned, but there were nods of relief from most of the board members. ''I'll see to it that you receive the requested information promptly, ladies and gentlemen, and I assure you that we'll stay in the closest touch."
***