Private Equity Fund Would Rather Shut Down a Plant Than Pay Its Workers a Fair Wage

By Art Levine, AlterNet. Posted July 10, 2009.

Every morning at 6 a.m, starting in August 2008, a group of striking workers came to stand outside the Stella D'Oro cookie and biscuit factory in the Bronx, N.Y. They were fighting for what they saw as their right to a fair contract, and the middle-class way of life they spent decades building with their loyal work.

For many workers facing trouble paying their mortgages, sending their kids to college or even going out for a meal, remaining on strike was not easy.

Elizabeth Francisco told the Bronx Times Reporter during a recent rainy day on the picket line: "It's hard. When my daughter asks, 'Mommy, I want to eat dinner outside,' I have no money. Out here [on the picket line], I'm depressed."

It was especially rough when some of the 50 or so low-paid replacement workers, or "scabs," came out for their lunch break and literally waved their paychecks in the faces of these strikers who have been subsisting on little more than unemployment benefits and a $105-a-week union stipend.

Stella D'Oro workers returned to work Tuesday morning. The day before, Byrnwood Partners, the private equity firm that owns the plant, had decided to shut it down in October rather than maintain wage levels. As part of that proposal, the workers accepted an offer from the company to return to work at their original pay until the plant closes.

Meanwhile, despite the odds, union leaders vow to fight the plant closing; they are reaching out to the state's political leaders and seeking a buyer for the plant. On Tuesday, the Bronx Borough President Ruben Diaz Jr. denounced the closing and said his office would try to find another buyer.

"Stella D'Oro has been a Bronx institution for decades, providing thousands of jobs to Bronxites over the decades," he said. My office will do everything it can to prevent this hastily made decision and keep Stella D'Oro, and the much-needed jobs it provides, in Kingsbridge [in the Bronx]."

Last week, a National Labor Relations Board administrative judge ordered the workers reinstated and the company to bargain in good faith with the union; the judge found that the company sabotaged negotiations by refusing to provide verifiable financial information to support its demand for concessions.

"The private-equity predators at Byrnwood Partners thought they could refuse to bargain with us, deny us information, break the law, tear up our contract, force a strike and break the union," Joyce Alston, president of Local 50 of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, said last week. This week, Alston says of the closing, "They're doing it out of spite: if they can't get you one way, they'll try another."

Indeed, the union plans to file a complaint to the NLRB that Byrnwood’s plans to close the plant were retaliation against the union.

Before the plant shutdown, 30-year employee Eddie Marrero, a foreman who oversaw the oven operations, had explained to AlterNet, "We're now fighting for jobs, fighting for respect and we're trying to make a point: Capitalists can't come here and destroy decent-paying jobs."

But on Monday, Byrnwood Partners did just that by giving the legally required notice of at least 60 days or more to shut down the plant under the Worker Adjustment and Retraining Act (WARN Act). A company statement proclaimed Monday, "Since the strike began almost a year ago, the company has been actively evaluating strategic alternatives to its high cost of production in the Bronx facility."

Both the union and the NLRB judge challenged the company's failure to prove that it was losing money at the plant and condemned the firm for bargaining in bad faith.

Even so, given the peril facing the plant's workers, Joyce Alston says, "We're taking them seriously, and we're going to try everything we can to keep the plant open and find another buyer." She told AlterNet Monday, "It's our view that they're using the WARN Act to circumvent the judge's order."

For months, with chants of "No contract, no cookies," union workers have been protesting the unyielding offer by Byrnwood to slash wages by as much as $5 an hour over five years, end all sick days and most paid holidays and drastically cut benefits, including their pensions.

When the judge's decision against Byrnwood was announced last week, there was jubilation mixed with caution on the picket line. When lead mechanic and shop steward Mike Fillippou got the news on his cell phone from a New York Post reporter, at first he didn't quite believe it, and then he quietly went around the corner to print out the NLRB decision for himself at a local store.

As he returned to tell the news to his fellow strikers, they erupted with cheers, hugs and not a few tears. "It was a big victory not just for us, but for the whole labor movement," he says.

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Art Levine is a contributing editor of the Washington Monthly and writes on labor and political issues for In These Times and the Huffington Post.

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