Wal-Mart's reshuffle plan in China falters

(Xinhua)
Updated: 2009-04-21 10:12

CHANGCHUN -- US retail giant Wal-Mart Stores Inc. halted a plan to reshuffle its mid-level executives in China after local trade unions stepped in, a law official with the Changchun municipal federation of trade unions said Monday.

"Three mid-level executives came to my office this morning and told me the plan was shelved and they have resumed their work," said Yang Fengzhi, director of the law department of the northeastern city's federation of trade unions.

Mou Mingming, a public relations manager of Wal-Mart, told Xinhua Monday that the company had been communicating with the local trade unions and further explained the plan to the employees in detail.

Wal-Mart, the world's largest retailer, on April 10 offered three options to the executives. These included transfers to outlets in other cities, demotions or leaving the company.

Wal-Mart's reshuffle plan in China falters

The Wal-Mart logo is displayed on the exterior of a Wal-Mart store in China in this undated file photo.

The options were offered to 54 managers and officers working under the managers, according to Yang Zhongtian, an officer on the list in Wal-Mart's Linhejie chain store in Changchun, capital city of northeastern Jilin Province. Wal-Mart employed about 1,500 workers in the city.

"The company actually wants us to leave," said Yang Zhongtian, "because few will find the first two options unacceptable." He said the plan might put at least 2,100 mid-level executives like himself out of work.

Mou declined to say how many employees were affected.

"Wal-Mart is a company that is still growing, and we expect experienced executives to work in new stores to guarantee quality service," she said, when after a Xinhua reporter asked whether the decision had any connection to the global downturn.

Yang, 35 and a father of a 9-year-old boy, said he was shocked by the move. He has worked at Wal-Mart for five years and his family depends largely on his monthly salary of 2,000 yuan ($292.6).

"I simply can't believe it," he said. Earlier in March, Wal-Mart was among the multinational firms that announced it had expansion or hiring plans in China this year.

If Yang left the company, he would only get about 13,000 yuan as compensation, he said.

He led another 11 colleagues to the city's municipal federation of trade unions last Monday for assistance.

"We invited the general managers of four chain stores in the city to our office immediately and expected them to negotiate with the executives on equal terms," said Yang Fengzhi. "We don't think it's right for the company to announce such a decision without consulting the employees," she said. The organization wanted the managers to consider halting the plan.

She also contacted her counterparts in Dalian in northeastern Liaoning Province and Shenzhen in southern Guangdong Province. The trade unions in these cities were also communicating with local Wal-Mart officials.

The trade union of Wal-Mart played a positive role in helping settle the issue, said a spokesman of the Federation of Trade Unions in Shenzhen, the headquarters of Wal-Mart in China.

"The Shenzhen federation will hold a meeting Tuesday to give information about the issue to all the chairman of Wal-Mart trade union branches. We hope the trade unions can do a good job in keeping stability and development of the enterprise," he said.

On July 29, 2006, workers of Wal-Mart's Jinjiang Store in Quanzhou City, Fujian Province, held their first membership meeting after the trade union was set up. It marked the establishment of the first union in the world's largest supermarket chain in China.

But the restructuring issue was the first time the local trade unions were involved in Wal-Mart's affairs, according to Yang Fengzhi.

Wal-Mart runs 121 supercenters, three Sam's Club outlets, two Neighborhood Markets and 101 Trust-Mart chain stores in China, employing more than 70,000 associates, according to the latest statistics on the company's website.

Yang Zhongtian told Xinhua Monday that he and his colleagues involved in the issue were back at work. The general manager of his chain store phoned him personally Sunday, saying he could either leave the company with compensation or come back to work as usual, with his position and salary unchanged.

"But I fear I can't work as usual," he said, adding that he was worried he might still lose his job.