Warren Buffet and Wal-Mart

Local moneyman Bill Parish, who seems to know what he's talking about, says that Warren Buffet's Berkshire Hathaway, which wants to buy local utility Pacific Power, is heavily invested in ... Wal-Mart!

"Berkshire Hathaway Inc. bought Wal-Mart Stores Inc.’s distribution system, McLane Co., in 2003 — it now accounts for one-third of Berkshire Hathaway’s entire gross annual revenues. The profits earned stocking the shelves at Wal-Mart are now helping Buffett buy PacifiCorp, the state’s second largest utility."

In his original piece for Oregon Business Magazine, Parish writes:

"Buffet notes that his biggest mistake was not investing directly in Wal-Mart stock. Still, by owning Wal-Mart's delivery system and investing in some of its biggest suppliers, you could say that Buffet is literally bringing Wal-Mart to a neighborhood near you. A critic might say, 'Attention Wal-Mart Shoppers,' stock up now so that billionaire investor Warren Buffet can deliver more goods, generate more profits and buy your local utility."

And we thought Warren Buffet, one of the world's richest men, was a good guy.  Apparently not, unless you're a fan of the Wal-Mart corporate model.

One of the local neighborhoods where Wal-Mart might show up is, of course, Sellwood.  Another is the small largely Hispanic town just west of Hillsboro, Cornelius, where a sign announcing a future development leads directly to Wal-Mart.  Didn't Hillsboro just stop a Wal-Mart development within its city limits recently?

But that's the Wal-Mart strategy, best characterized as a "bullying persistence".  And a drive to crush both opposition and competition:

"Once Wal-Mart stifles its competition in a region, it consolidates its holdings by vacating many of its stores. To limit competitors in the future, the leases of these dark Wal-Marts prevent them from being used for retail. Other uses for these massive windowless structures are limited.

"As of this February, Wal-Mart possesses 371 dead stores. Half of these buildings have been vacant for at least two years, and 21 percent have not been used for at least five years. Over that time, the number of dead Wal-Marts has risen 38 percent."

That piece was written a year ago.  You can assume that the number of Wal-Mart stores, either dead or alive, have proliferated since, spreading like the kudzu vine across the economic landscape.

It's not a good thing, either for Sellwood or any other community in the nation.  Or the world, for that matter.

UPDATE:  I just came across this story in the O's business section verifying the infestation of poor little Cornelius with yet another Wal-Mart.

Comments

[ronled]

The Rockwood Fred Meyers sat idle for quite some time too.

[Bailie]

WalMart is non-union. Is that the primary problem?

[Terry]

Yes, Bailie, it is, considering that the average hourly wage for sales associates at WalMart is something like $8.75.

[Bailie]

Where did you get your data?

Walmart wages

Walmart wages are competitive with others in the retail industry.

At Wal Mart, the majority of hourly associate positions are full-time.

The national average for regular hourly Walmart wages is nearly twice the federal minimum wage, and higher in urban areas.

In addition to competitive Walmart wages, the total compensation package includes much more. Associates are eligible for performance based bonuses and Wal-Mart also contributes to the employee profit sharing/401(k) plan. They also receive merchandise discounts, company-paid life insurance, and vacation pay.

Add opportunity for advancement to competitive Walmart wages, too. Seventy-six percent of store management team started in hourly positions.