Posted on 07/22/2004 10:28:41 AM PDT by The Ghost of FReepers Past
SEATTLE POST-INTELLIGENCER
http://seattlepi.nwsource.com/business/182915_costco21.html
Costco, Wal-Mart duel in political arena
Warehouse-store giants give money to opposing parties
Wednesday, July 21, 2004
By MICHAEL FORSYTHE AND RACHEL KATZ
BLOOMBERG NEWS
Executives at Costco Wholesale Corp. and Wal-Mart Stores Inc., competitors in the $76 billion U.S. warehouse-club market, have taken their rivalry to a new level: national politics.
Costco Chief Executive Officer Jim Sinegal, 68, is a Democrat who says President Bush's $1.7 trillion in tax cuts unfairly benefit the wealthy. He opposed the Iraq war and supports Sen. John Kerry of Massachusetts for president. And he's the only chief executive of a company in the Standard & Poor's 500 Index to donate money to independent political groups formed to oust Bush, Internal Revenue Service records show.
Wal-Mart, the world's largest retailer and owner of Sam's Club warehouse stores, gives more money to Republican candidates than any other company does. Its top three managers, including Chief Executive H. Lee Scott, donated the individual maximum $2,000 to Bush, and Jay Allen, vice president for corporate affairs, raised at least $100,000 to re-elect the president, earning him the Bush campaign's designation of "Pioneer."
Wal-Mart -- two-thirds of whose 3,580 stores are in the "red states" that voted for Bush in 2000 -- is backing White House policies on everything from trade to limiting overtime pay.
"Wal-Mart is extremely strong in Republican strongholds; they are a red-state retailer," said Amy Bonkoski, an investment adviser at Cleveland-based National City Corp.'s private-client group, which manages about $26 billion, including Wal-Mart and Costco shares.
"Costco is stronger in Democratic states. Costco is a friend to labor. Unions hate Wal-Mart."
The differences are based on more than ideology: Each retailer has a stake in the election's outcome in areas from health care to the minimum wage to the way unions can organize work forces.
Kerry, 60, a four-term senator, pledges to induce more employers to insure workers with a $257 billion proposal calling for the government to pay most so-called catastrophic health-care costs -- only for companies that provide comprehensive coverage. He'd raise the minimum wage and make it easier for workers to join unions.
Those policies might benefit Costco and hurt Wal-Mart.
Issaquah-based Costco offers comprehensive health insurance to most of its 78,000 U.S. employees, making it eligible for Kerry's plan, said Kerry's top domestic policy adviser, Sarah Bianchi, 31. That could cut 10 percent, or $35 million, off its annual health care premiums.
Wal-Mart's health plan for its 1.3 million U.S. workers is probably not broad enough to qualify for the savings that Kerry's proposal would bring, since it doesn't cover enough workers, said Jason Furman, 33, the Democrat's chief economic-policy adviser. Fewer than half of Wal-Mart's employees are enrolled in the company health plan, according to figures supplied by the retailer.
Costco wouldn't have to raise salaries with Kerry's proposal to increase the minimum wage to $7 an hour, from $5.15 now. It already pays hot-dog vendors as much as $16 an hour, and the lowest wage it pays is $10 an hour.
That's higher than the $9.96 average wage paid at discount stores bearing the Wal-Mart name. Sam's Club spokeswoman Jolanda Stewart declined to provide wage information for the warehouse unit.
Bentonville, Ark.-based Wal-Mart supports the Bush administration's expansion of free-trade agreements and its bid to curtail the number of workers eligible for overtime pay, according to its lobby disclosure reports.
Wal-Mart has benefited from the president's opposition to raising the minimum wage, since some employees make less than $7 an hour, and from the Republican-controlled Congress' reluctance to make it easier for workers to unionize. Wal-Mart has no unions; about one-sixth of Costco's workers are represented by labor groups.
"President Bush and his administration have made a real concerted effort to reach out to Wal-Mart and try to understand what our experience is," said Allen, 47, the vice president.
Wal-Mart and Costco aren't the only companies in the same industry whose executives are on opposing sides in the election.
Google Inc. Chief Executive Eric Schmidt is backing Kerry, while Internet rival Yahoo! Inc. CEO Terry Semel endorsed Bush, 58. William Harrison, CEO of J.P. Morgan Chase & Co., is giving more money to Democrats than to Republicans, in contrast to peers at Goldman Sachs Group Inc., Morgan Stanley and Bear Stearns Cos., federal disclosures show.
What makes the Wal-Mart and Costco rivalry stand out is that their political donations are so partisan and both companies are likely to gain if their party wins in November.
IRS disclosure records show that Sinegal and Costco Chairman Jeffrey Brotman each gave $95,000 last December to the fund-raising arm of America Coming Together, a group organizing voters against Bush, and the Media Fund, which is running anti-Bush advertisements.
Wal-Mart's political action committee, the biggest company PAC, gave Republicans 81 percent of its $1.3 million in donations in the past two years, a higher proportion than any of the top 25 corporate PACs, says PoliticalMoneyLine, a non-partisan, Washington-based group.
Vice President Dick Cheney underlined Wal-Mart's ties to the White House on May 3 when he visited the retailer's headquarters -- his first talk with a company work force in the 40 months since he took office, according to the White House Web site.
"This is one of our nation's great companies," Cheney said.
Sixty-seven percent of Wal-Mart's stores are in the 30 states that voted for Bush and Cheney in 2000, according to a comparison of store-location figures in the Wal-Mart 2003 annual report and election results.
Costco's stores are mostly on either coast, with 208 of its 321 stores in the higher-wage, more union-friendly 20 states that voted for Democrat Al Gore in 2000.
Sinegal makes no apologies for Costco's policies, saying higher wages reduce employee turnover, which lowers training costs.
"I'm not a social engineer," he said in an interview. "Paying good wages is simply good business."
© 1998-2004 Seattle Post-Intelligencer
i am willing to bet that Cajungirl has a few choice words about returning previously worn underwear...
If I recall from a previous thread, you are a union man, no?
There is barely any difference between Costco and Sams. So why not shop at the one that uses its profits for causes you agree with? But enjoy shopping wherever you choose. I'm just helping you make an informed choice.
Then why do you shop at Costco?
Do you think other countries should have the same attitude towards American made goods? Or why not bring it closer to home? Buy only things made in Los Angeles. Of course you could see the silliness of that. Trade benefits everyone.
>>>>> Not since I found out that Wal-Mart accepts returns of used undergarments and bathing suits . . . which isn't so bad, until you find out said return items are resold. UGH.
I always wash everything I buy before I wear it. And what is important here is where the corporate profits end up. The more profits that Wal-Mart makes, the more that the President will benefit. I will support whatever they do to make a profit so long as it does not endanger the public health and welfare. This W-M practice may make you squeamish, but ultimately it is for the greater good.
This election could very easily come down to a few hundred votes again. Every penny counts.
You're really wasting my time...
I look at labels...
I buy groceries at Ralphs
It's been years since I was in Costco
When you purchase quality merchandise you don't have to keep buying the same cheap garbage you get at Walmart
I have clothing Made in USA that I purchased twenty years ago...I still have sneakers made in USA I purchased years ago
Now if you want to buy junk and support the Waltons while they rip off their employees who are on food stamps that you are paying for with your tax dollars then do so but quit bothering me about it...gezzzzzzzz
How could it possibly be easier?
And to think that Amy Richards was dissing one of her own.
Thanks for the heads up on Costco. It is now on my "do not shop there" (never have) and "tell everyone I know do not shop there" list.
Let Costco know how we feel.
https://www.costco.com/CustomerService/EmailUs.aspx?secure=1
Who is forced to take a job there?
I am always amazed at these urban legends that suddenly crop up of Wal Mart...usually from union thugs or gullible Freepers.
Wal Mart does NOT resell used underwear. They will resell an UNOPENED package of underwear. But, if one is unhappy with their panties or boxers and has worn them, they will refund your money and throw them away. And the same goes for swimsuits if the tag has been torn off.
Geez, Wal Mart bashers really should get a better story than this one.
Actually, FOX News Sunday did a 'movers & shakers' segment on Costco's CEO, who is the lowest paid, receiving under $500k annually. 'He said that's enough', and has turned down raises and bonus'.
interesting blast from the past.
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