Wal-Mart picks longtime executive as CEO


Karen Gariel, center, takes part in a protest for better wages outside Wal-Mart in Los Angeles Nov. 7. (Lucy Nicholson/Reuters)

Wal-Mart named company veteran Doug McMillon chief executive Monday, changing top leadership as it faces new scrutiny for its treatment of employees and increasing pressure to boost sales.

McMillon, 47, will replace chief executive and President Mike Duke, 63, on Feb. 1, the company announced. Duke will remain with the company as chairman.

McMillon, whose first job with Wal-Mart was as a summer worker nearly three decades ago, most recently served as the head of Wal-Mart International, a fast-growing part of the company with 823,000 employees in 26 countries.

He will take the helm of Wal-Mart at a challenging moment for the world’s largest retailer. The company is struggling to grow same-store sales in the United States. It also has been the target of repeated job actions by workers and outside organizers, putting it at the center of the growing movement to pressure employers to raise the pay of low-wage workers.

Workers and their backers are planning protests at 1,500 Wal-Mart stores — including those in the Washington area — when the company hosts its annual Black Friday sales event, which marks the official start of the holiday shopping season the day after Thanksgiving.

They hope to use the Black Friday protests to draw attention to the plight of Wal-Mart workers, who they say are underpaid, given less than full-time hours and receive few benefits.

Last year, hundreds of Wal-Mart workers walked off the job in 46 states on Black Friday, according to OUR Wal-Mart, a group advocating for Wal-Mart workers. The giant retailer has been hit with new job actions in recent weeks, including walkouts in Miami and Tampa, according to protest organizers.

The protesters used the retailer’s change at the top to renew their call for higher pay and better benefits. “We sincerely hope that Mr. McMillon will answer the country’s calls for Wal-Mart to publicly commit to paying $25,000 a year, providing full-time work and ending its illegal retaliation against its own employees,” Tiffany Beroid, a Wal-Mart worker, said in a statement released by protest organizers.

Last week, the National Labor Relations Board’s general counsel found that Wal-Mart unlawfully threatened to retaliate against employees if they engaged in Black Friday strikes. The retailer also disciplined workers who did strike, the NLRB’s general counsel said. The findings will become NLRB complaints against Wal-Mart unless the retailer settles with employees.

Wal-Mart faced further embarrassment recently when it was reported that needy employees at a company store in Ohio are receiving Thanksgiving food donations from their fellow workers.

Those issues surfaced as the company faces investigations by the Justice Department and the Securities and Exchange Commission into potential bribery of foreign officials by Wal-Mart. The investigations grew out of reports in the New York Times detailing alleged bribery in Mexico. McMillon was running Wal-Mart’s U.S.-based Sam’s Club warehouse stores during the years that the newspaper identified the potential bribery.

Still, there is no evidence that Wal-Mart changed chief executives because of these problems. “It is nothing surprising that after five years Mr. Duke is retiring. He was basically an interim CEO,” said Walter Loeb, a retail analyst. “Mr. McMillon is young, and he likely has new ideas for growth.”

In appointing McMillon, the Wal-Mart board went with a longtime company man who has proven himself in other jobs, particularly in the international arena, where sales are growing nicely. A native of Arkansas, McMillon has been with Wal-Mart full time since 1990 and has experience throughout the company.

Any radical change in labor relations — or in the company’s strategy of driving down supplier prices, holding down labor costs and passing the savings onto customers and shareholders — seems unlikely.

“The leadership change comes at a time of strength and growth at Wal-Mart,” Rob Walton, chairman of Wal-Mart’s board and a member of the company’s founding family, said in a statement. “The company has the right strategy to serve the changing customer around the world, and Doug has been actively involved in this process.”

Michael A. Fletcher is a national economics correspondent, writing about unemployment, state and municipal debt, the evolving job market and the auto industry.
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