Wal-Mart's Chicago push and minority contracting

Wal-Mart's Chicago push and minority contracting

The mega-retailer Wal-Mart is making a big push into Chicago and other urban areas where it has a miniscule or nonexistent presence, and as part of ramping up its operations here, the company recently promised to roll out a new, nationwide minority-supplier program. But minority contracting, at least with regards to construction work, has proven a thorny issue for Wal-Mart in the city so far.

The news about the supplier effort broke in late June, during an event sponsored by the Metropolitan Planning Council. Before a sympathetic crowd drawn largely from the city's business community, Vice President and Chief Administrative Officer Tom Mars said Wal-Mart plans a "very ambitious ... program addressing professional services" and minority companies.

Mars related that he had met with prominent African-American leaders Melody Hobson and Robert Blackwell about minority suppliers and Wal-Mart; he said a previous structure between his company and minority contractors "wasn't very helpful." Now, he promised, "We've got the right plan."

There are few specifics about the new contracting effort, however--a company spokesman wrote in an email that further details were unavailable at this time.

In recent years, much of the criticism from organized labor and some community organizations in Chicago about Wal-Mart's expansion into the city has focused on the wages and benefits the company offers its employees. Minority contracting--already a simmering issue within the City of Chicago--could prove another point of contention, if not a legislative and political battle, when ground starts breaking at stores around Chicago.

Crain's Chicago Business published an investigation in April and found that the general contractor Wal-Mart hired to build the city's Austin store is bankrupt. Margaret Garner's firm was contracted for the West Side job. She's black, but as the investigation pointed out, much of the work on the project was done by firms not owned by minorities.

At least "17 of the 19 subcontractors that filed liens against the project were not minority- or woman-owned," the publication found. And two other nonminority companies carried out much of the actual general contracting duties in Austin. Wal-Mart said 57 percent of the contracts went to minority- and women-owned companies; the company is now requiring general contractors to track online how much work is completed by female- and minority-owned firms.

Will this new effort, which is relatively vague at the moment, result in more minority business with Wal-Mart? Critics and supporters alike will be watching the firm closely to answer that question.

Photo from Flickr user James Moore.

© Community Renewal Society 2011

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