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Varchild2008 (83.83)

Circuit City (IS) Unionized



November 10, 2008 – Comments (2)

That article above is a must read for the commenter who said "Circuit City isn't unionized."

AFL-CIO had at least indirect influence with Circuit City and union style gatherings/picketing did take place in stores in 2007.

Here's another link:

Look below.. Links don't work but the provide a showing of AFL-CIO Unionized Protests at various Circuit City stores regarding Worker Pay.

2 Comments – Post Your Own

#1) On November 10, 2008 at 10:58 PM, devoish (71.21) wrote:

 Look below.. Links don't work but the provide a showing of AFL-CIO Unionized Protests at various Circuit City stores regarding Worker Pay.

The AFL-CIO will protest/picket anywhere they believe labor law violations have taken place. In this case the firing of 3400 $18.00/hour long time employees to be replaced by brand new minimum wage employees. If you are making the case that the AFL-CIO was able to destroy Circuit City by putting CC's name on their "Unfair/do not Patronize" list, you should have said that.

Instead what you posted was:

What's the difference between BEST BUY and CIRCUIT CITY?

Easy... 1 is a leader in the consumer electronics retail sector... And the other is a failure.

But, why is that?

Best Buy =  Not Unionized

Circuit City = Unionized.

You can do this pretty much with any sector of the economy.  You select the leader and one of the losers and go to your search engine and see which one is unionized and which one is not.

In perhaps all cases the LOSERS are the companys that have a union.

Then you read my replys and posted this in response.


You don't apparently know even the HALF of what I have read on AFL-CIO's Circuit City campaign over the years

I do know that you posted that Circuit Ccity was unionized and I discovered that you are incorrect in that assertion. I supplied you substantial evidence that you were incorrect and now you have again misinformed this community in your title. 

Perhaps the lesson to be taken from the half you have learned is that unions did not cause CC's failure. Perhaps it was the failure to retain qualified and experienced employees as suggested in this article:

While the company's strategy will pare labor costs, many retail observers said it could backfire if its seasoned, high-volume sales staff is replaced by less-experienced and lower-performing workers.

“You can hire a bunch of cheap, inexperienced people but that has to show up as diminished service and probably lower sales,” Bernstein said. “What you have here is a particularly nasty approach to say to shareholders that 'we are lean and mean.'

I will repost the infiormation I supplied you earler:

From the same AFL-CIO website you linked to is this article using the phrase:   

Without the protection of a union and a collective bargaining contract, the 3,400 workers have few options to fight back.

Which clearly states that Circuit city was not unionized. As does the information from Circuit Citys 10K which I already posted to your first blog on this subject.

From Circuit Citys most recent 10K:

At February 29, 2008, the domestic segment had 42,974 hourly and salaried Associates. None of these Associates is subject to a collective bargaining agreement. The company employs additional personnel during peak selling seasons. The company has an hourly pay structure for the domestic segment’s non-management sales force

I did find some union employees outside the USA

International segment retail stores are typically staffed by 5 to 20 Associates, including full-time and part-time commissioned sales Associates and a store manager. At February 29, 2008, the international segment had 2,911 hourly and salaried Associates. Approximately 95 of these Associates, who are engaged in warehousing and distribution operations, are represented by a union. The terms of a three-year collective bargaining agreement ending in April 2009 were ratified with these employees. The company considers its relationship with the union-represented employees to be good.

So 45,790 employees were non-union. 95 employees were union.

The company ended its pension plans in 2005. Costs of the earlier pensions are described in the 10k here:

The rate of return assumption is reviewed annually and adjusted as appropriate. For fiscal 2008, fiscal 2007 and fiscal 2006, our expected rate of return on plan assets was 8.25 percent. The weighted average discount rate used to determine net pension expense was 5.75 percent in 2008, 5.65 percent in 2007 and 5.75 percent in 2006. Net pension expense for our pension plans was $0.1 million in fiscal 2008, $2.4 million in fiscal 2007 and $1.7 million in fiscal 2006. These expenses are included in cost of sales, buying and warehousing and selling, general and administrative expenses on the consolidated statements of operations.

As I said: "Something else, other than unions, probably went wrong here".


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#2) On November 11, 2008 at 8:45 AM, devoish (71.21) wrote:

A little trip down memory lane, in order to commiserate with the 3400 non-union workers Circuit City laid off for having been their too long and gotten too many raises and were getting paid less than $1000/week.


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