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

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

Tuesday, when he walked through the factory gates in the morning with his fellow strikers, they still kept alive some sense of triumph. "We accomplished our mission to go back," he says. But he and other union members were shocked by the dilapidated conditions they say they found inside the plant: a horrid smell instead of the sweet aroma of baked goods, broken lockers, dirty toilets.

"The place looks like it was vandalized," he says. Still, when he joined the others in signing his name on the factory rolls, "it was like a celebration," he says, and Fillippou started screaming exuberantly, "We're back! We're back!"

Byrnwood even offered Tuesday to renegotiate the union contract, a signal that makes Fillippou see the plant-closing announcement as just another negotiating tactic by executives designed to scare workers into submitting to low wages. Ultimately, Fillippou believes, "If they find the right buyer, they're going to sell it. They're there to make money, and the only reason they bought it is to resell it." (The company's statement hinted that it might also start another plant elsewhere to "assure a continuing supply of high-quality Stella D'oro products to its retail partners and distributors.")

Since 1964 this union local, fighting to save decent jobs, has represented workers at the company, which was founded as an Italian family business in the 1930s. Fillippou has worked there for 14 years, and a majority of the workers are women who have worked there for years, even decades. They made upscale cookies, including Swiss fudge, breadsticks, biscotti and a much-loved S-shaped breakfast treat, and, Fillippou says, "We're very proud of it, and we do it with heart. They came out excellent."

But after the scabs came in August, and the pre-strike inventory started to decline, the quality and range of products also began to slide, union activists say.

Indeed, one day last fall, a handful of workers took a break from picketing to take a look at the new Stella D'Oro products at a supermarket near the factory. They picked up boxes of the legendary S-shaped treat, and when they saw how misshapen, even burned, many of the cookies were, a few of the women began to cry. "Oh my God!" one 27-year veteran packer cried out as she handled the box and felt how thin the breakfast cookies were. "What have they done?"

Fillippou says, "We used to do quality control and reject those that didn't qualify. We know that quality control doesn't exist now." (A company spokesman declined to comment on the quality or range of products being made.)

George Kahssay, a 22-year foreman, observes, "They're making such shit, they're boycotting themselves." The union has called for a boycott of Stella D'Oro products, but Kahssay and others report that they encounter people who see them with their strike T-shirts on and tell them how bad the company's baked goods have become.

With private-equity firms in charge, labor advocates say, quality almost inevitably suffers -- whether it's in cookies or the wretched patient care offered by nursing homes owned by funds like the Carlyle Group.

"What happens to cookies happens to patients," observes Peter Rossman, a private-equity expert with the global International Union of Food, Farm and Hotel Workers (IUF). "You've got a recipe for human disasters."

Joyce Alston told AlterNet her view of Byrnwood's underlying anti-union strategy: "This has all been about maximizing profit," regardless of the harm it can cause workers -- or customers.

Yet the company, as is often the case, blamed the union for the decision to close. "By refusing to compromise and insisting on maintaining a high labor-cost structure, the union leadership has ensured that the jobs that they were trying to protect would eventually disappear from the Bronx forever," the company's statement said.

Alston says, "It's ridiculous to say that for us to go all the way through this fight, we would not care about our jobs and would not try to work something out." The sticking point in negotiations before the strike was the company's refusal to provide financial evidence to support its demand for drastic concessions. Indeed, the company's attorney insisted the union's accountant could just take hand notes from one audit report and couldn't make any copies of the document to study.

The strike has attracted the attention of local political leaders and the international labor movement, although it has drawn only sporadic news coverage.

Unfortunately, despite the judge's order requiring reinstatement of the striking workers, back pay and bargaining in good faith, the company can delay facing any enforcement for as long as 10 years because of the NLRB's elaborate, time-consuming appeals process.

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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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