Published on: April 8, 2022
Got this note from MNB reader Tom Murphy:
I have been on both sides of the union discussion. As a programmer at a utility, I was forced to join the IBEW (International Brotherhood of Electrical Workers). This group had everything from janitors, secretaries, operations staff to electrical and software engineers. None of these groups had the same problems or demands…so this was a useless mess. I also was on executive teams dealing with everything from the Longshoremen to the various unions under the AFL-CIO.
I have several perspectives:
First and foremost, I truly believe that if your company is unionized, you deserved it…at least at some point but maybe not now.
Second, both sides, management and union leadership, are generally driven by greed…for money and power. So, the relationship likely has no long-term benefit. In fact, there are numerous instances where the battles for money/power led to the destruction of entire industries (think US automotive industry) and thus Detroit.
Finally, to your point…smaller may be better and more flexible. Large unions tend to have a history of corruption and graft and leadership’s objectives are often driven by differing needs than the union membership. After all, union leaders are the executives of their “corporations”. Maybe the smaller approach can result in better working relationships.
I am not a fan of unions, but realize that the real world will govern this…frequently on a cyclical basis. In any case, the next decade will be interesting!
Reacting to yesterday's piece about the amenities being created for employees at Walmart's new Arkansas headquarters, one MNB reader wrote:
This further amplifies the divide between home office and the stores. If Walmart cut jobs a the office, how many of those folks would take a job at a store?? We know that answer.
We had a piece yesterday about community college culinary programs are ramping up their cooking schools, creating a pipeline of trained cooks and chefs available to be hired by restaurants and supermarkets.
One MNB reader wrote:
This probably the single greatest example of what a community college can do. I learned about it and stayed there during my foodservice days. In the middle of a cornfield is this beautiful hotel and restaurant that is entirely staffed by students from the local community college. Not exactly on point for the topic about hiring chefs, but it is certainly the kind of thing that retailers could sponsor and use to develop talent.
MNB yesterday took note of a Wall Street Journal report that the US Securities and Exchange Commission (SEC) is investigating how Amazon "has disclosed certain details of its business practices, including how it uses third-party-seller data for its private-label business." The question, the Journal writes, is how Amazon "handled disclosures of its employees’ use of data from sellers on its e-commerce platform … The SEC’s enforcement division has asked for emails and communications from several senior Amazon executives, according to one of the people."
The argument here consistently has been that there is nothing inherently wrong with a retailer looking at sales numbers and determining, based on volume and potential profitability, what branded products ought to be knocked off as a private label offering. It is, in fact, what virtually every retailer does … if Amazon is prevented from doing so (and, admittedly, it almost certainly is faster, better and more precise in its analysis and implementation), then those same regulations need to be extended to Walmart, Kroger, Albertsons, CVS, Walgreens, etc…
That said, if Amazon is obfuscating the facts of the case and systemically being less than transparent with lawmakers and regulators, then it will end up paying the price. The case can be made for a certain kind of behavior up to a certain point, and Amazon needs to tell its story. But it cannot hide the chapters it finds to be inconvenient.
MNB reader Phil Herr responded:
Kevin, while I mostly agree with your positions, I have been stewing over the issue of private label products. You point out that the practice is widespread and consequently Amazon should not be castigated for their practice of using sales data from national brands to determine which to “knock off”. Sorry, I just don’t agree with the practice.
Corporations such as P&G, Kelloggs, Coca-Cola and others spend enormous resources on R&D and establishing brands, only to find retailers ripping them off.
You have been quick to point out how Instacart and other third party agents are effectively parasitic. So my question is, how is the practice of “ripping off” national brands any different?
Interesting point. You're right - the "we've always done business this way" argument really shouldn't be employed here.
I do think it is important to keep in mind that both suppliers and retailers have long agreed that private label items allow retailers to offer lower prices to bargain-hunting shoppers … and that in many cases, the CPG brands actually are making the private label products being sold next to their own SKUs.
When I object to Instacart's "parasitic" behavior, it has more to do with retailers giving up their customer data, which is one of their most important assets. It's not really the same thing.
Finally, MNB fave Glen Terbeek had a two word response to my mentioning that the Major Leaguer Baseball season started yesterday:
Agreed. Unless they're playing the Mets … who, by the way, beat the Washington Nationals 5-1 yesterday, and currently (and trust me, temporarily) stand alone atop the National League East standings.