By Michael Barbaro and Justin Gillis
Washington Post Staff Writers
Tuesday, September 6, 2005
At 8 a.m. on Wednesday, as New Orleans filled with water, Wal-Mart chief executive H. Lee Scott Jr. called an emergency meeting of his top lieutenants and warned them he did not want a "measured response" to the hurricane.
"I want us to respond in a way appropriate to our size and the impact we can have," he said, according to an executive who attended the meeting. At the time, Wal-Mart had pledged $2 million to the relief efforts. "Should it be $10 million?" Scott asked.
Over the next few days, Wal-Mart's response to Katrina -- an unrivaled $20 million in cash donations, 1,500 truckloads of free merchandise, food for 100,000 meals and the promise of a job for every one of its displaced workers -- has turned the chain into an unexpected lifeline for much of the Southeast and earned it near-universal praise at a time when the company is struggling to burnish its image.
While state and federal officials have come under harsh criticism for their handling of the storm's aftermath, Wal-Mart is being held up as a model for logistical efficiency and nimble disaster planning, which have allowed it to quickly deliver staples such as water, fuel and toilet paper to thousands of evacuees.
In Brookhaven, Miss., for example, where Wal-Mart operates a vast distribution center, the company had 45 trucks full of goods loaded and ready for delivery before Katrina made landfall. To keep operating near capacity, Wal-Mart secured a special line at a nearby gas station to ensure that its employees could make it to work.
Wal-Mart has much to gain though its conspicuous largesse -- it has hundreds of stores in Gulf Coast states and an image problem across the country -- but even those who have criticized the company in the past are impressed.
"Wal-Mart has raised the ante for every company in the country," said Adam Hanft, chief executive of Hanft Unlimited Inc., a New York branding and marketing firm. "This is going to change the face of corporate giving."
Wal-Mart, in turn, has been showered with praise. Scott, Wal-Mart's folksy chief executive and its chief defender against a chorus of critics, has appeared on "Larry King Live" to discuss the chain's response to the storm and was singled out by former presidents George H.W. Bush and Bill Clinton during a joint news conference yesterday in Houston.
Clinton, who is leading a hurricane relief fundraising effort with Bush, said he hoped Wal-Mart's plan to allow relocating employees to take jobs at Wal-Marts across the country "will give some guidance to our members of Congress."
The praise comes at a time when the chain faces a series of lawsuits over allegations of wage-and-hour-law violations and gender discrimination.
But the chain's huge scale is suddenly an advantage in providing disaster relief. The same sophisticated supply chain that has turned the company into a widely feared competitor is now viewed as exactly what the waterlogged Gulf Coast needs.
The Bentonville, Ark., company is rushing to set up mini-Wal-Marts in storm-ravaged areas, handing out clothing, diapers, baby wipes, toothbrushes and food. With police escorts, it delivered two truckloads of ice and water into New Orleans. It is shipping 150 Internet-ready computers to shelters caring for evacuees.
During a tearful interview on "Meet the Press" on Sunday, Aaron F. Broussard, president of Jefferson Parish in the New Orleans suburbs, told host Tim Russert that if "the American government would have responded like Wal-Mart has responded, we wouldn't be in this crisis."
Not everything has gone perfectly for Wal-Mart. Several of its New Orleans stores were looted, and 126 of its stores in the region have been closed at some point. About 20 remain that way. "We did not try to stop the looting or take merchandise out" of the stores, company spokeswoman Mona Williams said in an e-mail.
Scott, who said he began to grasp the severity of the storm as he watched TV at home in with his wife last week, said he now participates in two daily conference calls dedicated to the hurricane, one at 7:30 a.m., the other at 5 p.m.
The challenges that arise during these calls, he said during an interview, include such matters as how to supply police officers with clean underwear and how to pay Gulf Coast Wal-Mart employees suddenly scattered across the country. "We have an infrastructure that allows us to react," Scott said last night.
Asked what motivated the chain's relief efforts and how he thought critics would respond, Scott said: "We have never claimed to be flawless. But on the other hand, we have always demanded that we as a company do care. If anything, this week has shown we do care."
He said: "We can't do any more than our own part. We are not the federal government. There is a portion we can do, and we can do it darn well."
As Katrina's winds were still dying down last week, preparations at the Brookhaven distribution center ensured that goods desperately needed by ravaged sections of the Gulf Coast started appearing on Wal-Mart shelves.
At the nearby gas station that had set up a special line for Wal-Mart workers, the general manager of the distribution center, Brent Hinton, pumped gas for nearly seven hours to keep up employee morale.
Referring to his colleagues at the distribution center, Hinton said yesterday, "We have become relief workers."
Cliff Brumfield, executive vice president of the Brookhaven-Lincoln County Chamber of Commerce, said he was impressed with Wal-Mart's preparations.
"They were ready before FEMA was," he said.
Gillis reported from Brookhaven, Miss.