25 January: Wal-Mart to retrench more than 10,000 Sam’s Club employees
- Branko Brkic
- 25 Jan 2010 06:24 (South Africa)
Also today: China says didn’t conduct Google hacking; Bric countries agree to agree on earlier agreements on climate change; Wal-Mart says Sam’s Club firings an investment in building customer loyalty, war is peace; BBC under pressure again over commercial programming arm; Kraft says will seek to grow Cadbury UK jobs, not lose them after takeover; British companies not out of the woods yet, as recession shocks still lurk; Texas crude spill seen to be contained.
Wal-Mart to retrench more than 10,000 Sam’s Club employees
Whatever you think of the dress-sense of people who walk the aisles at Wal-Mart Stores, the company’s health is a barometer of the US economy. And now it seems that the weather is still freezing for the nations’ retailers, after Sam's Club, the warehouse shopping division of Wal-Mart, said it’s getting rid of about 10% of mostly part-time jobs in its more than 100,000 workforce. Instead of admitting its sending people to join the already 10% of American unemployed, Wal-Mart says it’s an investment in building loyalty and enhancing club member experiences, and will also drive future growth. Sam's Club CEO Brian Cornell took corporate double-speak to new heights, when he said the group will outline charges associated with the job cuts when it releases fourth-quarter results in February, and that he hopes the cuts will be cost-neutral for the operation. The firm will now outsource in-store product demonstrations of items such as food, beverages and electronics, and current demo employees can apply for new jobs with the outsourcing company Shopper Events. The mass layoff also eliminates jobs used to recruit new Sam’s Club business members, after the company said it was having more success recruiting members to its steep discounts through direct marketing.
Argentina’s president is still trying to fire central banker over debt issues
Argentina’s central bank governor is up against the nation’s President Cristina Fernandez de Kirchner, for not setting aside $6.6 billion in reserves to pay down debt later this year. The country defaulted on some $130 billion of debt in 2002, and payback has been a political hot potato. The president signed a decree firing Martin Redrado earlier this month, for not backing her plan to use the reserves to ease debt. But Redrado has the law on his side, after a judge stopped the decree the following day, and turned over an order to tap the nation’s monetary reserves. Now a congressional committee is to consider his firing, although the panel’s decision isn’t legally binding. So, it looks like the president is trying to strong-arm the bank, while Redrado continues to maintain that the central bank can’t be instructed by the executive branch. The government wants to appoint a former (and, no doubt, compliant) central banker to the post, and has sent police to the bank to stop Redrado from entering. Whatever the outcome, Redrado’s job is to manage inflation. Money for paying down debt should presumably derive from the fiscus.
China says didn’t conduct Google hacking
China says it didn’t hack into Google or 20 other US companies, after the world’s biggest search-engine claimed it suffered cyber-attacks that caused the loss of intellectual property and compromised the Gmail accounts of Chinese human rights activists. The Chinese are on the defensive after Google said it will stop censoring its Chinese search engine, even if it has to close its China offices, after implicitly stating that Chinese authorities were complicit in spying on the Web. US Secretary of State Hillary Clinton has called on China to investigate the claims, after President Barack Obama made the issue of censorship a keystone of US relations with China. Chinese officials re-stated that the country outlaws hacking, and that China is open to international cooperation to fight crime in cyberspace. But it also said it won’t amend its views and practices on censoring Internet content when that subverts the government, destroys national unity or spreads porn or violence. The issue has opened up a real can of worms, and pretty soon the Chinese will accuse the Americans and its Western allies of hacking into their state secrets. Whatever comes out of this will be bad for governments everywhere, and big, secretive corporates, and they’re not going to like that, so expect this issue to just fade away.
Bric countries agree to agree on earlier agreements on climate change
Brazil, India, China, South Africa
It’s another Bric in the path to a comprehensive Copenhagen climate accord, after Brazil, India, China and South Africa gave their principled support to combating climate change. But they said Copenhagen was just a political agreement, which must be followed by all countries negotiating a legally binding treaty. They also said they would divulge their voluntary climate mitigation actions to the UN Framework Convention on Climate Change. So, India and China now officially support the same basic climate change principles that they negotiated with the US, Brazil and South Africa in the dying moments of the Copenhagen summit in December, but don’t legally endorse this view. The road ahead is still a long one, as the world’s nations work out long-term cooperative actions to combat climate change, while developed countries still have to put numbers on limiting their greenhouse gas emissions after 2012, when the current Kyoto Protocol runs out. Agreement on climate change moves about as slowly as the evolution of snails, and it may not be enough that nations agree to agree on what they have already agreed upon in principle months and years back, but have not yet agreed to in fact. Most of us will be long dead by the time the next ice age has come and gone, and still the world’s nations pontificate on inexactitudes.
BBC under pressure again over commercial programming arm
The BBC is caught between a rock and a hard place over the commercial success of much of its output. On the one hand a House of Lords committee thinks it should sell a stake in its commercial arm, BBC Worldwide, so that the subsidiary can become a major global distributor of British programming. On the other hand, the BBC Trust, which represents public interest in the state-funded broadcaster, says any aggressive commercial expansion of the Beeb will put its reputation for quality programming and news impartiality at risk, while at the same time damage its commercial rivals such as ITV. Seems like the corporation has been too successful at making money than many deem is good for it, with revenues hitting some $1.5 billion a year. The Commons Culture, Media and Sport Committee says this output jeopardises the BBC’s reputation for prudence, and the Trust ordered BBC Worldwide to cut back on its merger and takeover activities. This battle has raged for years, and may take several more.
Kraft says will seek to grow Cadbury UK jobs, not lose them after takeover
Kraft says it will create more jobs in Britain and grow Cadbury's UK business after its $19 billion takeover of the iconic chocolate maker. The deal has caused ructions over employment in Britain, which has been hard-hit by the global recession. Cadbury has been around for some 185 years, and people are worried that since another famous British manufacturer has now left the country’s shores, jobs will follow. US-based Kraft gained economies of scale and a bigger footprint in the global food industry by buying Cadbury, and also swelled its presence in the manufacture of sweets. Michael Osanloo, Kraft's executive vice-president of strategy, now reckons that Kraft will benefit from savings brought about by the synergies of the merger, and hopes this will save jobs at two major British plants near Bristol and Birmingham. He says Cadbury will now market itself more aggressively, and strike out on a path of growth. So, now it’s going to become a candy-maker, instead of a sweets manufacturer.
British companies not out of the woods yet
British firms will have a rough ride to recovery from the global recession, despite a drop in the number of profit warnings in the fourth-quarter of 2009, according to accountants Ernst and Young. The firm says the number of companies issuing profit warnings is at the lowest level in six years, and that the British economy has picked up quicker than expected. But even though Britain is expected to have followed France and Germany out of recession, Ernst and Young is worried that growth in the first part of 2010 could turn into economic stagnation or a double-dip recession later on, on the back of fears over such economic gremlins as Greece’s burgeoning public debt, and the collapse of Dubai’s economy. In 2009, the UK entered recession for the first time since 1991, so hopes that it will exit at a rapid clip from its deep malaise, may yet still prove to be unfounded.
Texas crude spill seen to be contained
Crude oil has spilled off the southeast Texas coast after a tanker and towing vessel collided on the weekend. But the US Coast Guard doesn’t expect what it says may be a 450,000 gallon spill to spread much beyond a three kilometre area. The accident closed nearby Port Arthur after some residents were evacuated for about seven hours. The tanker's crew said they’re missing about 11,000 barrels of oil – some 450,000 gallons of fuel -- although other sources say the vessel has only lost one-tenth that amount. Initial reports indicate the environmental impact has been minimal, if such as thing can be said of any large oil spill.