Friday, April 11, 2008

Karma 1, Walmart 0

First off, all apologize for a lack of an update on Pa.-5. Unfortunately, life got in the way of volunteer journalism. We’ll (okay, I’ll) get something up in time for the election, though. On to today’s issue…

If you have a few hundred bucks lying around and have always wanted a glimpse into the corporate culture of the Worst Person In The World (four days in a row), today is your lucky day. First a quick preface:

There are certain rules for dealing with a video camera.

Rule One: When in doubt always assume that the camera is rolling.
Rule Two: Don’t do anything stupid/embarrassing/illegal while the camera is rolling.
Rule Three: If you intend to violate rules one and two, make sure you have the only copies of that tape.

Wednesday, the Wall Street Journal reported that the home of low cost managed to violate all three of these rules and now they are getting their just desserts. (Of course, we all know that Walmart is not exactly averse to breaking the rules, but this is another example of challenging Karma and losing.)

Here’s the deal. A small video production company called Flagler Productions of Lenexa, Kansas (founded by Wild Bill Hickok incidentally) was under contract with Walmart to videotape shareholder and manager meetings and to produce demotivational videos for the company. The Walmart contract of $10 million per year accounted for approximately 90 percent of Flagler’s business.

For the better part of 30 years, Walmart management managed to repeatedly violate rule number two. Some of the antics caught on tape at the meetings could put the company in some very actionable and definitely embarrassing positions. These meetings had everything from anti-union strategizing to admitting a dearth of female managers to cross-dressing corporate execs. The tapes were kept well away from public view for a long time until….

…Walmart went and violated rule number three in 2006. The corporate giant decided to abruptly cancel its relationship with Flagler Productions, forcing massive layoffs in Kansas. None of the news sites offers so much as a lame reason for Walmart’s action other than some new managers wanted to hire a different company. Unfortunately, Walmart neglected to – wait for it – sign a formal contract spelling out ownership of the tapes.

Splendid job.

There is some question about the actual legal ownership of the tapes, but there is no question at all about physical possession of them. Flagler’s got them and they want everyone to see them. The company did initially offered the tapes (with .pdf) to Walmart for $150 million and subsequently lowered by the offer by another $5 million. Walmart countered with an embarrassing $500,000. That is .0033 percent of Flager’s offer if you are keeping score at home. It should go without saying that Walmart can probably afford to pony up a little more. Maybe they were hoping to use the settlement they got out of a disabled woman to buy the tapes.

Insult to injury anyone?

So now it is fire sale days at Flagler: 15,000 tapes in all. There are plenty of plaintiffs, union organizers, and media types who would love to check them out. For the incredibly low price of $250, you too can check out an hour’s worth of footage. For a few dollars more, they will burn a DVD for you.

Always Low Prices, indeed.

That rate probably won’t come close to covering the amount that Flagler tried to extort from charge Walmart in exchange for the tapes. On the other hand, revenge is a dish best served cold. It should be fun to watch the fallout from this as some of these videos come out.


1 comment:

Anonymous said...

sounds like just deserts to me