Wal-Mart signs deal to unionize China workers

By Kimberly Morrison

The Morning News - Arkansas

July 29, 2008

Wal-Mart Stores Inc. on Friday reached collective bargaining agreements with China's official union that includes pay increases for the retailer's workers there, the parties said.

The All China Federation of Trade Unions, the country's only legal union, which is also government-run, last week negotiated an agreement with Wal-Mart in Shenyang in the northeastern province of Liaoning to raise worker's wages by 8 percent this year and by the same amount again in 2009.

Wal-Mart said it had negotiated similar pay increases for union workers in Shenzhen, in the southern Guangdong province, and in Quanzhou, in southeastern Fujian province.

A Wal-Mart spokeswoman told Agence France-Presse that the retailer was in talks with unions in other Chinese cities.

The agreements follow two years after the Chinese union launched a high-profile campaign to organize Wal-Mart workers.

Wal-Mart employs more than 83,000 workers at its China stores.

"We support these efforts because of the valuable, mutually-beneficial partnership the government-run union offers and because of their commitment to assisting business in our growth and development in China," said Kevin Garden, a Wal-Mart spokesman.

Wal-Mart directly exports about $9 billion from China annually and estimates export volume by third party suppliers is also around $9 billion, according to the company's Web site.

Wal-Mart first came to China in 1996 and now has 105 stores in 55 cities operating as Supercenters, Sam's Club and Neighborhood markets. It operates 101 additional stores under the Trust-Mart banner.

Workers in other countries including Brazil and Argentina have also successfully organized, but the retailer doesn't have a great track record with cutting deals with unions.

Wal-Mart abandoned its Germany operations in 2006 amid speculation that the unionized workers there diminished the retailer's profits.

Butchers at a Wal-Mart store in Texas successfully organized a union in 2000 and Wal-Mart immediately announced plans to phase out meat-cutting operations. Wal-Mart also closed a store in Jonquiere, Quebec in 2005 just six months after workers unionized.

"In America their attitude has been that they would rather cut off their right arm than unionize," said David Nassar, director of union-funded Wal-Mart Watch. "We of course think it's great that workers in China have more of a say than they did before, but we are disappointed that Wal-Mart and (CEO) Lee Scott don't think that American workers deserve the same respect."

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