Wal-Mart closes down unionized store

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April 30, 2005

The American discount chain, Wal-Mart, closed the doors at one of its two unionized outlets in North America Friday. The closure eliminated 190 jobs in the small town of Jonquière, Quebec. Wal-Mart Canada spokesman Kevin Groh said the store shut at noon Friday rather than the planned date of May 6 because it no longer had any merchandise.

Michael J. Fraser, the union's national director in Canada, said: "Wal-Mart is trying to send a message to the rest of their employees that if they join a union the same thing could happen to them." The union will be filing unfair labor practice charges against Wal-Mart in Quebec.

The United Food and Commercial Workers union has organizing drives in at least 25 Canadian stores. In August 2004, workers at the Jonquiere store received union certification, and tried to negotiate a contract, which would have been the first for Walmart in North America. Now St. Hyacinthe, Quebec has the only remaining unionized Wal-Mart in North America; employees of that store have no contract.

The consulting firm AT Kearny has stated that above all, low labor costs is a big source of cost advantage for Wal-Mart. Wal-Mart's employees might begin at as little as $8 an hour which is 20-30% less than unionized workers at rival discount stores.

In his first interview since the store's closing, Walmart CEO H. Lee Scott, Jr. defended his decision, saying to the Washington Post, "You can't take a store that is a struggling store anyway and add a bunch of people and a bunch of work rules that cause you to even be in worse shape."

The major sticking point according to Scott was the number of full-time employes. Scott said that it was the union who walked away from negotiations; however, Fraser said that Walmart walked away from the talks, shutting down the store to avoid submitting to arbitration.