Monitoring the economic pulse of the Triad
Where Winston-Salem fits in the Herbalife model
As long as unflattering attention — a high-profile hedge fund investor characterizes the company as a Ponzi scheme and the Securities and Exchange Commission has opened an inquiry — doesn’t cause Herbalife to implode, the company’s plans to establish a manufacturing facility in the shell of the old Dell plant have to be counted as a positive for Winston-Salem.
The incentives granted by the city of Winston-Salem and Forsyth County come with clawback provisions if the company doesn’t meet performance standards for employees hired and dollars invested.
After all, the 493 new employees in Winston-Salem will be making and shipping a product — a sure thing. They’ll have a guaranteed paycheck in return for their labor hours.
That’s not a given for the distributors who sell products for Herbalife, Greensboro-based Market America, Amway, Avon and other multi-level marketing companies.
A Jan. 10 investigative report by CNBC.com describes how Nicole Lopez, an Herbalife distributor in Utah, lost $10,000 trying to sell the company’s weight-loss shakes and nutritional supplements, including a $1,000 investment in leads that didn’t pan out.
Lopez told CNBC.com: “If you’re an honest person and you want to do an honest business, there’s no way you can succeed.”
The report said Herbalife has reimbursed her and called her situation a result of “bad mentoring.”