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Wal-Mart Plans to Close Unionized Store in Quebec

Wal-Mart Plans to Close Unionized Store in Quebec (Update3)

Feb. 9 (Bloomberg) -- Wal-Mart Stores Inc. plans to close its first
unionized store in North America and fire 190 workers after it failed to
reach a contract with workers in Jonquiere, Quebec.

Wal-Mart, the world's largest retailer, objected to some of the United Food
& Commercial Workers' demands, such as increasing staffing, because costs
would rise, spokesman Andrew Pelletier said in an interview.

The Jonquiere store an another in St. Hyacinthe, Quebec, were the first
Wal-Mart stores to unionize in North America. Keeping expenses low has
enabled Wal-Mart to trim prices and compete against rivals such as Target
Corp., said investors including David Abella.

``Wal-Mart, like a lot of other companies with a non- unionized workforce,
is scared to death of unions,'' said Abella, an analyst at Rochdale
Investment Management, whose $1.3 billion in assets include Wal-Mart shares.
``Even if they could manage that store with the union, that could lead to a
domino effect across Canada and the United States.''

Marie-Josee Lemieux and Louis Bolduc, spokespeople for the UFCW, didn't
immediately respond to voice mail messages seeking comment.

Union Drives

Shares of Wal-Mart declined 68 cents to $52.52 at 4:01 p.m. in New York
Stock Exchange composite trading. They have declined 8.4 percent in the past

The union is targeting Wal-Mart because it's concerned that the company's
expansion into food retailing will put pressure on Canadian rivals to reduce
wages. Workers at a third store, located in the Montreal suburb of Brossard,
have applied to the labor board for certification.

The union last month said it was in the process of organizing about a dozen
other Wal-Mart stores in Quebec and holding recruitment drives in at least
10 other stores in Canada.

Wal-Mart's sales at U.S. stores open at least a year have slowed as shoppers
curb spending because of higher energy and food prices. Same-store sales
rose 2.5 percent in January and 3 percent in December, compared with gains
at Minneapolis-based Target of 9.4 percent and 5.1 percent respectively.


Workers at the Jonquiere store received union certification in August after
a majority signed membership cards. Quebec's Labor Relations Commission last
month granted employees at a store in St. Hyacinthe permission to open
negotiations with Wal- Mart as part of the United Food & Commercial Workers.

The union demanded a minimum work week for full-time employees of 37 hours,
higher than the 28 hours the store guarantees, Pelletier said.

``We are of the view that some of the union's demands, particularly with
regards to scheduling and employee status sought to fundamentally change the
Jonquiere store's business model,'' Pelletier said. ``That creates new
financial pressure on the store, which has been struggling.''

A successful union drive among butchers at a Jacksonville, Texas, store in
2000 was scuttled when Wal-Mart switched to pre- packaged meat and
re-assigned the workers to other departments.

Wal-Mart has 256 Wal-Marts and six Sam's Clubs in Canada.

U.S. Campaign

The union has led efforts in U.S. cities including Chicago to oppose new
stores or require the company to abide by conditions, such as paying a
so-called ``living wage.'' The union has said Wal-Mart pays less than
competing supermarket chains and offers fewer health-care benefits.

Wal-Mart employees in California earn about 31 percent less than those who
work at large retailers, according to a 2004 study by the University of
California at Berkeley Center for Labor Research and Education. Wal-Mart
workers in the state receive about $9.70 an hour compared with $14.01 at
retail firms with 1,000 or more employees, the report said.

Wal-Mart last month ran full-page advertisements in more than 100 newspapers
to counter criticism that it pays workers less and offers fewer benefits
than competitors.

Jonathan Tasini
Economic Future Group