McDonald's

Last edited by lenazun on December 15, 2009 - 4:08pm
Company Snapshot: 

Headquartered in Oak Brook, Illinois, McDonald's operated 32,000 fast-food restaurants in 2008, serving 47 million customers daily in 118 countries, with total revenues of $25 billion, and 400,000 employees. It primarily sells hamburgers, cheeseburgers, chicken products, fries, breakfast items, soft drinks, milkshakes, and desserts. Recently, marketing to concern over health, it added salads, wraps, and fruit.

Number of employees worldwide: 
465,000
Chief executive officer: 
Jim Skinner
Global Fortune 500 rank: 
388
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Corporate accountability
Accountability overview: 

McDonald's achieved a score of 85 on the Human Rights Campaign 2005 Corporate Equality Index which rates large corporations on policies that affect their gay, lesbian, bisexual and transgender employees, consumers and investors. The HRC Corporate Equality Index rates companies on a scale of 0 percent to 100 percent on factors. Human Rights Campaign, 09/18/2006

McDonald's donated $2 million to the Scripps Research Institute of La Jolla, California, raising doubts about the self-proclaimed independent research body’s ability to remain neutral. With the help of funding from McDonald’s, Scripps plans to release a study on the medical issue of child obesity. A press release issued by the Institute was headlined, "The Scripps Research Institute, McDonald's Align to Fight Childhood Obesity and Type 2 Diabetes," and describes McDonald's as "serving a variety of wholesome foods made from quality ingredients to millions of customers every day." It also states, "The relationship unites Scripps ... world-renowned scientists...with McDonald's 50-year legacy of supporting programs that promote children's health and wellness." According to the Institute's philanthropy guidelines, the $2 million from McDonald's has secured the company a seat on the Scripps' "Council of 100" and the benefit of "private sessions specifically designed for them with....[r]esearch scientists." The collaboration was deemed a “publicity stunt” by bloggers at CarbWire, a diet industry website. Reuters, 09/13/2006

In 2006, CEO James A. Skinner earned $12.7 million in total compensation including stock option grants from McDonald's. AFL-CIO, 04/05/2006

According to the Social Investment Research Analyst Network (SIRAN), ten years after the Federal Glass Ceiling Commission recommended disclosure of diversity data as a way to remove barriers and promote women and minority advancement, most US companies still fail to fully disclose EEO data to the public. McDonald's is listed as one of the companies that does not provide full public disclosure. The company provides full disclosure only upon request. Social Investment Research Analyst Network (SIRAN), 12/07/2005

In 2005 McDonald's was ordered to pay $490,000 in damages to a former McDonald's restaurant manager for forcing him out of his position when the company discovered he was HIV positive. Russell Rich had accrued 21 years of employment with McDonald's when, in 1997, he learned he was infected with HIV. The company pressured him to quit and he was subsequently left without health insurance and nearly died. Rich was awarded $5 million in a 2001 ruling on the case, but the decision was overturned owing to mistakes made by the previous judge. Associated Press, 07/07/2005

In early 2003, BanTransFats.com sued McDonald's for inadequately informing the public of delays in its plans to reduce the use of trans fatty acids (TFAs) in its products. Joseph effectively argues that McDonald's failed to make clear to customers that the type of oil used to fry its foods (which contains TFAs) had not been changed. The company agreed to settle the case by donating $7 million to the American Heart Association and spending an additional $1.5 million to make its trans fat reduction plan public. BanTransFats.com, 02/11/2005

In May 2003 , 24 groups were awarded $10 million in a settlement with McDonald's after the company apologized for not giving the public "complete" information about the use of animal fates to cook french fries. The court case was brought by vegetarians who claimed they were fooled into thinking the fries were free from animal products. In 1990, McDonald's announced that it would cook its fries in vegetable oil only. However, in 2001 it was discovered that in North America the fries are first cooked at plants using beef fat, and then frozen before being shipped to outlets for further frying. The company acknowledged that it may have confused customers over its practices. McDonald's was forced to state that in India, where Hindus and some Sikhs do not eat cows, its fries did not contain any beef. McDonald's offered 60% of the settlement to vegetarian groups, 20% to Hindu and Sikh groups, 10% to children's nutrition and hunger-relief efforts and 10% to promoting understanding of Kosher practices. BBC News, 05/20/2003

In 2003, McDonald's shareholders requested that the board of directors issue a report to shareholders by October 2003, reviewing McDonald’s animal welfare standards with the view to adopting and enforcing consistent animal welfare standards internationally. Focusing on the disparity between McDonald's US and UK policies governing animal welfare and other international operations, the shareholders noted: "Our company has not made known any global program. McDonalds.com makes no reference to improved conditions in the raising of any animals (other than laying hens), transportation of any animals, use of experts, any programs or evaluation methods, performance objectives,or any process, programs, plans, or progress outside the U.S." PETA, 05/01/2003

Labor: 

China
According to the All-China Federation of Trade Unions, McDonald's violated China's labor laws by underpaying part-time workers. Minimum wage is $.97/hour for part-time workers, but McDonald's pays only $.52/hour.'' China Radio International, 04/11/2007

More than 1,000 workers rioted in protest of the poor working conditions at the Merton factory in Guangdong province. According to China Labor Watch (CLW) dozens were injured. In its investigation at the Merton Company, CLW found that Merton factory failed to uphold international labor standards. Violations of worker rights included:

  • Salaries fell below the legal minimum, ranging between 600 and 800 yuan (or US$75.60 and US$100.80) a month;
  • Routine workdays of 11 hours, 6 days a week;
  • Monthly overtime hours of 70 per month with the threat of salary deductions if employees refused overtime. Chinese law limits the legal maximum overtime to 36/hr/month;
  • Denial of overtime pay;
  • Denial of paid national holidays, vacation, and sick leave;
  • Failure by Merton to provide adequate medical insurance or pension funds.

Li Qiang, CLW’s executive director, remarked, “Chinese workers live at the bottom of the society. They have no means to voice their needs or to protect their lawful rights. ...Tragedies such as the Merton riot were a result of the misguided social policy that overemphasizes economic growth and neglects labor rights.” Merton manufactures for companies including McDonald’s, Disney, Time Warner, and Mattel. China Labor Watch, 07/27/2006

US'
McDonald's has been criticized for rejecting a fair wage campaign launched by the Coalition of Immokalee Workers (CIW), a group of South Florida farm workers advocating a living wage for agricultural laborers. In March 2005, CIW won a campaign against Taco Bell after which the company agreed to pay one penny more per pound for tomatoes, with the increase to go directly to farm workers. CIW was hoping to reach a similar agreement with McDonald's, however the company denied CIW and instead signed on to a voluntary certification program called the Socially Accountable Farm Employer (SAFE). Critics of SAFE claim that the organization has no real credibility. SAFE is controlled by board members of only two organizations and fails to address farm workers' working conditions and wage concerns. Participants in the SAFE certification program are only required to follow current US laws regarding farm labor, which offer workers few protections. Some farm laborers in Immokalee earn a meager $8,000 per year. See related Progress Noted. AlterNet, 12/20/2005

China
A 2005 report by China Labor Watch “The Toy Industry in China: Undermining Workers’ Rights and Rule of Law,” highlights violations of worker rights in toy plants in Dongguan City, Guangdong Province. The report specifically highlights the Hong Kong-based Kai Long manufacturing, which exports toys for Hasbro, Mattel, McDonald’s, and KFC. Violations of international labor laws and those of China include:

  • Routine 14.5 hour workdays with only one day off a month;
  • Wages at 59 percent of the local minimum wage standard in Dongguan City;
  • No overtime compensation;
  • Workers deprived of 43 percent of their legal wage, earning .0125 to .025 cents per toy they produce;
  • Inadequate and unsanitary working conditions and dorm rooms;
  • No insurance for regular workers;
  • No independent trade unions.

Li Qiang, the executive director of China’s Labor Watch commented: “Abusive conditions persist, threatening to undermine any gains made in workers’ standard of living and hindering the development of rule of law in China.” China Labor Watch, 09/01/2005

Vietnam
Vietnamese laborers staged a two-day strike to protest unfair work conditions and alleged labor violations at a the Keyhinge Toys Vietnam Co Ltd factory that makes toys found in McDonald's Happy Meals. The facility employs nearly 10,000 workers, all of whom walked out over complaints of mandatory 12-hour shifts without overtime pay, monetary penalties for using the toilet, and verbal abuse. McDonald's did not comment on specific allegations, however the company did respond to settle the situation. The Scotsman, 05/14/2005

UK
In August 2001 a McDonald's operating in Surrey, England was fined 12,000 pounds for overworking school-age employees late into the night on school days, often without rest breaks. One 15-year-old girl served burgers and fries for 16 hours during a Saturday. A McDonald's spokeswoman said the company usually only hired employees above school-leaving age, and deeply regretted the lapse. BBC News, 07/31/2001

North America
In a 2001 report by Human Rights Watch that analyzed the 23 complaints filed since 1994 when NAFTA was enacted, McDonald's was named as a violator of workers' rights in the U.S., Canada, and Mexico. Human Rights Watch, 04/16/2001

Environment and product safety: 

McDonald's scored 22 out of 100 in "The Climate Counts Company Scorecard Report." The report judged companies on their commitment to reversing climate change. The creation, manufacturing, and transportation of goods greatly contribute to pollution-linked to global warming. Climate Counts, 06/18/2007

The Amazon rain forest is home to nearly 10% of the world's mammals, 15% of the world's known land-based plant species, and about 220,000 people from more than 180 different indigenous nations. However, an estimated 1.2 million hectares of what was once rain forest have been destroyed, mostly illegally, to grow soybeans for animal feed. Greenpeace’s report, “Eating up the Amazon,” highlights the connections between rain forest destruction, rapid expansion of soy farming, and the chickens used to make McNuggets, distributed in McDonald’s European restaurants. McDonald’s purchases its chicken from Sun Valley Foods, a division of Cargill, the leading corporation in Amazon soy production. Greenpeace forests campaign coordinator, Gavin Edwards, stated: “Supermarkets and fast food giants, like McDonald's, must make sure their food is free from the links to the Amazon destruction, slavery and human rights abuses.” Greenpeace is currently finding alternatives to Amazon soy for animal feed in McDonald’s chicken products. Greenpeace USA, 04/06/2006

In August 2005 California Attorney General Bill Lockyer filed suit against nine producers of potato chips and french fries, alleging toxic contents. Lockyer is seeking a court order requiring the companies to warn consumers that some of the popular food products are made with acrylamide, a chemical identified by the state as a human carcinogen. Plaintiffs in the case include McDonald's, Burger King, KFC, Frito Lay, H.J. Heinz, Proctor & Gamble, and Wendy's. In April 2007, KFC agreed to display the warning and pay $341,000 in civil penalties. As of July 2007, McDonald's was still contesting the lawsuit.CorpWatch, 04/25/2007

In August 2002 McDonald's and the United Nations Children's Fund (UNICEF) came under fire for a partnership under which money will be donated to UNICEF through the sale of certain food items at specific locations of the fast-food chain. Critics say that UNICEF, as "the world's foremost advocate for children" should be dedicated to the well-being, including good health and nutrition, of children everywhere, while McDonald's "Big Macs and Happy Meals are popular, but ...high in fat, sugar and calories, and a cause of obesity and Type 2 diabetes."CorpWatch, 08/01/2002