Several stories over the past two days have outlined the oncoming fight between Wal-Mart and the Obama administration over labor reforms, primarily over the Employee Free Choice Act (EFCA) - but also health care reform and a slew of other potential legislation.

This is no suprise for anyone. Wal-Mart isn’t stupid, it read the writing on the wall and has been preparing for a democratic win and a push for labor reform for a while. It’s been donating more money to politicians (including democrats) to curry favor, as well as funding major anti-EFCA initiatives (not to mention explicitly telling its employees to vote for John McCain.)

Other big business - retailers especially - will be play major roles in the fight, but no American Business’s model is more threatened by labor reform right now than Wal-Mart - which looks to be ground zero in the upcoming battle with the new administration.

A labor attorney quoted in Reuters sums it well:

“You’ll see an all-out battle at Wal-Mart” by labor, said attorney Richard Hankins, who leads the labor and employment practice at the law firm of Kilpatrick Stockton.

Jonathan Birchall at FT tells about the Obama administration could hit Wal-Mart on health care as well:

On healthcare, Mr Obama’s platform included setting a minimum contribution level for businesses to their employees’ healthcare plans - an approach that has been opposed at state level by big non-unionised retailers, including Wal-Mart...The retailer, with more than 1.3m staff, has said it wants to work on healthcare reform with a new administration.

And if Wal-Mart hadn’t already made it clear enough how much it refuses to change or pay its workers a dime more, check out the gall on Lee Scott - quoted by the Associated Press at the recent analysts’ meeting:

“It’ll be generations in the impact it [EFCA] has on this country. And it won’t be positive. I guarantee you that. It will not be positive. But for Wal-Mart, in the short term, and in the longer term on a relative basis with our peers, we’re going to run this business,” Scott said. He continued, ”We like driving the car and we’re not going to give the steering wheel to anybody but us.”

Will the next four years see better wages and benefits for Wal-Mart’s 1.4 million employees? Will it loosen Wal-Mart’s grip on the steering wheel? We look forward to finding out - and blogging about it. 

Lee Scott and Eduardo Castro-Wright have spent the past two days in New York City, detailing Wal-Mart’s business plan to financial analysts. There’s a lot to run down here, but the big (and good) news: less new Wal-Marts. The company is continuing to cut down on capital expenditures and build less stores, focusing instead on remodeling and driving up sales at its current stores.

AP:

As a result, capital expenditures will come in at $5.8 billion to $6.4 billion for fiscal 2009 and $6.3 billion to $6.8 billion in fiscal 2010. That’s down from the $9.1 billion the company had in capital expenditures in its last fiscal year.

The Wall Street Journal tells us what that means in terms of store numbers.

Mr. Castro-Wright also said the discount retailer plans to open 142 to 157 new U.S. stores in the fiscal year ending January 2010, down from an earlier projection of 165.

150 stores is still a heck of a lot, but any decrease is a good thing. Remember that growth in 2008 had dropped from 2007, and that only several years ago Wal-Mart was opening 300+ new stores a year.

Some other tidbits from the analyst meeting below the jump-

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BloggingStock’s Brian White doesn’t always share our viewpoint on Wal-Mart, but this week’s “Wal-Mart Weekly” column is particularly interesting. It focuses entirely on the closing of the Tire & Lube Express in Gatineau, Quebec.

It’s a good column, and not just because it gets in a few zings at Wal-Mart. It’s one of the first pieces we’ve seen that begins to take a real look at Wal-Mart’s repeated decisions to close stores rather than deal with unions and union contracts, and asks important questions from a business perspective. Is this a good policy for Wal-Mart as a company? Is the repeated antagonism of workers who unionize going to hurt Wal-Mart’s growth potential in countries like Canada and China - where unions are more powerful and prevalent? And more fundamentally - is Wal-Mart’s bare-bones-wage model really a sustainable and profitable business plan in an economy where living costs are skyrocketing?

If you’ve got time, read the whole thing: 

The Wal-Mart Weekly: Is closing up a unionized shop the best strategy? [BloggingStocks]

This week, Wal-Mart Stores Inc. (NYSE: WMT) closed the first shop in North America that had been completely unionized. Does this signal anything to other Wal-Mart locations that form a collective bargaining organization? Sure: form one and the retailer would rather see the operation shut down entirely instead of having employees with any kind of power.

That may sound harsh, but it has to be the feeling around a Wal-Mart tire and lube shop in Gatineau, Quebec, which was literally closed due to its unionization last week. What better a way to leave consumers in the lurch than to close up shop on something that brings in revenue even if its employees decide to stray from Wal-Mart’s “non-union” stance in its retail locations.
Was the closing really the best answer?

With the Gatineau location in Canada the first official Wal-Mart location with an actual union contract in place, Wal-Mart’s response could be seen as severe. Was the global retailer trying to get a message out to any other Wal-Mart location in North America—“unionize and we will shut your doors?” If so, that’s no way to run a business, right? Is Wal-Mart so afraid of unions in its stores that it would rather shut them down (or pieces of them) instead of continuing to operate?

Lisette Wallingford, a frustrated customer of the Gatineau shop, expressed her disappointment: “They told me to come back today because my tires were coming in ... I think I’ll go to Canadian Tire because I can count on them.” There’s all we need to know: a frustrated customer. Wal-Mart was at least kind enough to direct customers late last week to other Gatineau-area Wal-Mart locations, with no mentioning that the closed location was due to unionization. Nice.

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This video from the Financial Times takes a look at Wal-Mart’s new small-format Marketside stores, and their close competitor Tesco’s Fresh & Easy. The analysis of the two stores is interesting: Marketside looks more polished, whereas Fresh & Easy focuses on house-brand bargains. But the most interesting - and perhaps saddest - part of the video is hearing customers’ explanations of why they like the new small format stores:

“It’s kinda like a small grocery store,” one man says. “I kinda like the idea of the local markets instead of great big stores you’ve got eight million people in.”

That is, customers are attracted to these markets because they’re like the local grocery stores Wal-Mart so frequently puts out of business. After years of flocking to Supercenters, these consumers have realized the value of shopping close to home, though still seem unwilling to support real locally-owned businesses. Marketside has all the appeal of a local store with none of the benefits: money spent there doesn’t stay in the community and its owners have no incentive to treat employees well. Wal-Mart seems to be capitalizing on the very holes its own business model has left in the retail landscape.

Big box stores go small [Financial Times]