Associated Press On Paidcritics.com

From the Associated Press:

Activists say that, after a year’s worth of Web-based Wal-Mart bashing, they’re winning a public relations battle against the world’s largest retailer. The company says, though, that every week 127 million shoppers endorse the way it does business.

Experts declare there is no clear winner - and that the public will soon tune out the chatter.

“When you get to the point where you have escalating blog wars, it gets to be a little like political ad campaign season. I use my remote to mute every single one of those ads,” said Patricia Edwards, who helps manage retail funds for Wentworth, Hauser and Violich investment counselors.

Unions last year launched two political-style campaign groups to malign Wal-Mart over business practices they say treat workers poorly. Wal-Mart supporters have countered with their own attacks, questioning the union’s motives.

The brawl is escalating.

Paidcritics.com was started last week by Working Families for Wal-Mart, a group funded primarily by Wal-Mart, to reveal “the real motives of the union leaders behind the campaign against Wal-Mart”.

It described one of its leading critics, Andrew Grossman of union-backed Wal-Mart Watch, as “a political operative with a checkered past” in a section called “Paid Critic of the Week.” The site also lambasted Wayne Hanley, head of the Canadian chapter of the United Food and Commercial Workers union.

In response, union-funded WakeUpWalMart.com started its own Web site Tuesday, http://www.abunchofgreedyrightwingliarswhoworkforwalmart.com, which attacks the retailer’s public relations and lobbying figures.

“These great guys who love to stretch the truth (or what mom called liars) honed their special Wal-Mart skills on an array of right wing political campaigns,” the web site reads.

In a letter to Democratic members of Congress about Wal-Mart’s efforts, the group said the attacks were reminiscent of a campaign by a pro-Bush group, Swift Boat Veterans for Truth, that questioned Sen. John Kerry’s Vietnam War military record during the 2004 presidential race.

Reputation management expert Steven Silvers said paidcritics.com was “a name-calling, nastily aggressive little Web site” that marked an escalation in Wal-Mart’s battle with critics.

“The company’s latest move comes right out of the Swift Boat playbook. And it could become standard procedure for other corporations that find themselves in the center of public controversy,” Silvers, a 25-year veteran of reputation management at Denver-based GBSM, Inc., wrote in his blog Scatterbox.

Both sides claim to score points. Union groups decry what they call Wal-Mart’s low wages, poor health benefits and destruction of local economies. Wal-Mart says it creates jobs, provides low-cost insurance for employees and saves the average family $2,300 a year by keeping prices low.

“The jury is still out,” said Paul Argenti, professor of corporate communication and reputation management at the Tuck School of Business at Dartmouth University.

Both sides have been going at each other since two unions launched separate campaigns in spring 2005 to pressure Wal-Mart for change after failing for years to organize its stores. WakeUpWalMart.com is funded by the United Food and Commercial Workers and Wal-Mart Watch is backed by the Service Employees International Union.

Wal-Mart in response hired a team of about 35 consultants at Edelman, listed by Sourcewatch.org as the world’s largest independently owned public relations company, as well as lobbyists in Washington.

It has also launched a number of initiatives, including adding more affordable health care plans for employees as low as $11 a month, adopting ambitious environmental goals and boosting diversity among employees and its sea of suppliers.

“At this point I would certainly say that we are gaining ground,” Wal-Mart spokeswoman Sarah Clark said.

“From our standpoint, 127 million customers shop at our stores in the U.S. every week. We know many of them value the savings, the job opportunities and the charitable giving we provide their communities,” Clark said.

Argenti said Wal-Mart has gotten better at defending itself since last year. But he said the paidcritics.com site was an ill-advised political attack campaign that reacts to the critics rather than taking the initiative.

“It’s a really bad idea. What companies need to do is to rise above the argument and set your own agenda,” Argenti said.

Wal-Mart Watch said the new site raised questions about Wal-Mart’s public commitments. It pointed to a critical entry about Arizona’s Attorney General Terry Goddard that it said contradicted Wal-Mart’s public pledge to work with Goddard’s office.

Wal-Mart made that pledge after Goddard sued the retailer and another company this month for allegedly overcharging customers and failing to post prices. The paidcritics.com site says Goddard “must be getting a little nervous” ahead of elections and added that he “steals a few headlines by haranguing Wal-Mart”.

Wal-Mart’s Clark said Working Families for Wal-Mart, which made the Goddard comment, is a separate and independent group.

The group has a steering committee headed by former Atlanta mayor and civil rights leader Andrew Young, but the operations are run by a staff housed in Edelman offices.

At least one steering committee member, filmmaker Ron Galloway, had doubts about the strategy. He said he preferred to focus on the facts of Wal-Mart’s case.

“I still think that it is a sub-optimal strategy to personalize all this. I think the facts are in Wal-Mart’s favor and that’s just not part of the battle I’m interested in joining,” Galloway said.

Posted by Laura Jack on Wednesday, July 19, 2006

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