The top engineer of Walmart’s strategy to pursue left-wing priorities such as “sustainability” and backing Obamacare, as though those are what genuinely reflect “corporate responsibility,” is leaving.
Leslie Dach joined the Bentonville, Ark. retail behemoth seven years ago as vice president of corporate affairs. He previously worked for environmentally extreme groups and was “active as a senior strategist in Democrat politics,” according to his World Resources Institute bio. He worked in the Clinton administration, served as a senior adviser for Sen. John Kerry’s 2004 presidential campaign, and has been a top strategist for at least two Democratic conventions. He helped design the 2004 Boston convention and managed the Democrat response to the Republican convention that year, and is credited with managing the program at the convention in Los Angeles four years earlier.
Those credentials might not have seemed an appropriate fit for the supersized merchant with the anti-union conservative reputation, but much of the public – and some of the media – have had mistaken perceptions about Walmart for years now.
“Over the past year I’ve seen firsthand Walmart’s transformation on sustainability and health care and its record on economic opportunity and job creation,” Dach said when he was hired in July 2006. “The changes are real and substantial steps for the business. I look forward to working with Walmart and its senior management to continue on its path of change.”
It seems now, as he plans to leave this summer and is conducting a series of exit interviews with the media, that Dach might be saying “mission accomplished.” For example in a radio spot for American Public Media’s Marketplace, rather than emphasize successes that might reflect profitability and growth, instead Dach touted the company’s social-minded measures.
“We, as a company, can make a difference on issues like sustainability, on healthy foods” Dach said last week. “We can hire veterans. We can bring manufacturing back to the U.S. And we set out systematically to think of the places we can make a big difference and go get it done.”
Among the specific examples he cited with pride was Walmart’s vast expansion of the use of solar energy.
“…It’s helped us save money,” Dach said. “We announced that even though we are America’s largest solar generator today, we’re going to increase that over six-fold in the next several years. And through that and through energy efficiency, we can save over a billion dollars, we believe, in our energy bills. And we can return that in lower prices to our customer, which makes our relationship with them even stronger.”
Obviously Dach wasn’t telling the whole truth about Walmart’s solar initiatives, which Marketplace interviewer Jeremy Hobson suggested in a follow-up.
“But if I were to go to my bosses at American Public Media and say, ‘Let’s make sure we’re all working out of solar-powered offices,’ they might think that’s a great idea, but they might not want to spend the money on it,” he posited. “Did you face any pushback?”
Dach answered, “Well, it takes us to do the math and the analysis. But the great thing about these things is a lot of them, you can be a much better company, and you can save money. But people also see the results. They see the customer likes it; they see that our employees like it; and they see it helps us in the communities in terms of our relationships with our customers and with elected officials. So it pays back.”
Unfortunately that’s as far as Hobson pushed Dach on the issue. If he had gone further, the obvious question would have been “so how does Walmart save (or make) money on solar energy when it costs almost everybody else a fortune because it’s so expensive?”
The undelivered truth is because the whole renewable energy industry is a rigged wealth transfer from most electricity customers and taxpayers to those invested in wind and solar schemes. Walmart, like other crony capitalist corporations that include General Electric and Duke Energy, enjoy significant tax breaks, heavy subsidies, accelerated depreciation, and in many states mandates that force utilities to generate a minimum percentage of their power from renewable sources.
For example Duke has spent the last few years buying up wind and solar projects, and not because the massive coal-, nuclear-, and natural gas-generator needs renewables to meet demand. As CEO Jim Rogers has explained in the past, he has pursued the almost-useless intermittent power sources because they bring a 17 to 22 percent return on equity for his company. Those healthy profits are reaped thanks to government grants (like the stimulus), state incentives, and depreciation laws that allow companies to shield more income from taxation.
And then there are schemes like what Apple is engaged in with its massive data center in North Carolina, where it has built two massive solar farms and a fuel cell facility (very expensive electricity) so they can try to pass the energy-sucking competer servers as “green.” In reality Apple, as a customer of Duke Energy, sells the costly solar- and fuel cell-generated power to the grid and recovers those high costs, and then receives electricity for its facility for extremely cheap thanks to Duke’s nuclear and fossil fuel power sources.
So when Dach talks about “doing the math and analysis,” “saving money,” and pleasing “elected officials” so Walmart’s solar scheme “pays back,” he is telling an incomplete story. The only way it pays is if it’s rigged like it is for all the other crony corporations. Walmart’s Web site explains that they support renewable energy developers (also heavily subsidized) through long-term purchase power agreements, which assures the generation at an affordable price into the future. And with state mandates, utilities are forced to buy a certain percentage of renewable power, so when they deal with Walmart they get a nice big electricity-eating customer that also can help them meet state requirements for renewables. Now if Walmart could just get government to force the public to buy its merchandise!
For proof of where Walmart’s concerns lie, you need to look no further than its lobbying reports. Like other major corporations the retailer bends the ears of government officials on nearly every policy issue. Walmart is well known for its attention to efficiency in its inventory and delivery chains to keep its prices low, which is illustrated by its lobbying interest in issues such as lower-cost transportation and fuel taxes and fees, health care costs, and labor costs. The price for energy is not going to be the exception, where an altruistic Walmart says, “we’re going to pay more for solar for the good of the world.” Instead they found a way to make it look like the company is both “green” in power usage and lean in energy costs, but the only way that can work is if the system is rigged in their favor at others’ expense.
Not surprisingly, since Dach’s arrival from the Democratic Party ranks, Walmart’s lobbying expenditures skyrocketed. According to records compiled by the Center for Responsive Politics, the company’s annual spending jumped from $2.48 million in 2006 to $6.59 million in 2008, and has remained about the $6 million mark in each year since. Manipulating government regulations has its price.
As for Dach’s claim that Walmart’s behavior and priorities have been good for business, that’s debatable. The company’s stock price has climbed, but other factors have reflected poorly. Same-store sales have declined for long periods in the past and have languished again recently.
And last month, for the sixth year in a row, Walmart was rated worst (or tied for it) among department and discount stores in the American Customer Satisfaction Index. According to Bloomberg News the retailer has added 455 stores over the last five years, but has shed about 20,000 employees over the same time period. The results are increasing complaints about barren shelves and poor customer service.
Shoppers are “so sick of this,” said Zeynep Ton, a retail researcher and associate professor of operations management at the MIT Sloan School of Management. “They’re mad about the way they were treated or how much time they wasted looking for items that aren’t there.”
I guess the shoppers that were surveyed for the Customer Service Index weren’t aware of all the great things Walmart is doing on renewable energy, sustainability and organic food. Sales and shopper satisfaction may be in the tank, but Leslie Dach will leave Walmart this summer thinking he succeeded because he built a nanny-state “we know what’s good for you” culture that Democratic strategists espouse so often.
Paul Chesser is an associate fellow for the National Legal and Policy Center and publishes CarolinaPlottHound.com, an aggregator of North Carolina news.