Could a Wal-Mart Bailout Be Next?

Let’s put forth the assumption that Wal-Mart is not showing growth like it is right now. Never mind the thought that when we see holiday shopping numbers they often will show numbers without Wal-Mart because Wal-Mart is doing so well.

We know they have more revenue than Saudi Arabia or more revenue than Apple, Google, Target and Microsoft combined. source

Let’s assume for a moment that Wal-Mart Executives were on Capital Hill asking for a $34 Billion Dollar “loan” with the statement that “they needed an immediate infusion of government cash to last until New Year's, and both said they could drag the entire industry down if they fail.” source

What would happen if Wal-Mart decided to ask for a “bailout” or a “loan?” Do you think that anyone would even entertain the thought?

Think about it this way.

According to MarketLineInfo here are some quick stats:

Let’s look at those numbers a different way

Wow... Wal-Mart employs almost 4 times as many people but earns less than one quarter the revenue per employee.

Okay, I know, you are going to say that of course an automaker will need to make more per employee... cars are more expensive than the Nintendo Wii or a Furby.

So, let's put some perspective on this.

Xerox manufacturers and sells printers and copiers. You can get an office copier for the price of a small car. You can spend $100,000 or more on a production level device. Not to mention all the toner you then have to use. Their revenue for the same period was $17,228 Million with 57,400 employees.

Xerox has $300,139 revenue / employee.

Still not convinced they are over bloated?

Let's look at Honda Motor Company. For the same period, they had a revenue of $94,000 Million with 167,231 employees.

Honda Motor Company has $562,096 revenue / employee.

Seems to me that the Big 3 Automakers are a bit over burdened.

So, let's get back to our Wal-Mart question.

They, as a single company, have a much larger economic footprint. They employ more people (people who choose to work there regardless of what claims may be against Wal-Mart in fair treatment of employees) than all three automakers combined. Communities love Wal-Mart, so much so they are willing to give them tax subsidies (which some could argue is a pre-emptive bailout) even though there is an opposition movement.

If Wal-Mart failed, 2.1 million employees would be out of a job. That would make the job cuts in November 2008 look like a walk in the park. Even minimum wage workers fall into the “work force.”

But, I bet that if Wal-Mart approached congress with as ridiculous an idea as asking for $34 Billion, they would be laughed at.

“Let them fail!” would be the banner cry.

As a side note, automakers have received subsidies from governments before and it still didn’t save them. Here is just one example.

Any guess where I stand on the whole automaker “loan” issue?