BOSTON – The turmoil that had shut down the Market Basket supermarket chain began to recede last week when the ousted company president, Arthur T. Demoulas, regained control of the company. Demoulas, who had been ousted by his cousin, Arthur S. Demoulas, is now back in the saddle at Market Basket, a chain of 71 New England grocery stores with 25,000 employees mainly in Massachusetts and New Hampshire. The company has huge real estate holdings that are also of major interest on Wall Street.
The drama that led to the shutdown began because of a bitter dispute between the billionaire owners of the chain. Two cousins, both named Arthur Demoulas, headed the opposed sides.
On one side was the “good boss,” Arthur T. Demoulas, CEO for over a decade. But the other side, led by his cousin, Arthur S. Demoulas, gained control last July of 50.5 percent of the company shares, after a prolonged family and legal dispute. The “bad” Arthur S. fired “the good” Arthur T., and brought in two Wall Street executives as co-CEOs.
A few weeks later, managers at both headquarters and in stores went into open rebellion, fearing, with reason, cuts in their salaries, health insurance and pensions. The “bad” Arthur T. and his people favored a model of doing business that made little pretense of the company caring about its employees, managers included.
Dairy, produce, deli and other department heads joined them, along with favored, full-time workers. With their supervisors out, many low-paid, part-time workers understandably followed.
The “good” Demoulas had, during his ten-year tenure, cultivated a reputation for the chain of low prices and good treatment of workers.
Although starting salaries are not high at Market Basket, the beginning wage of $12 an hour for a full-time clerk is higher than it is at a number of other supermarket chains. Full-time workers got health insurance and employer-subsidized retirement plans. Among the part-time workers, however, salaries and benefits were lower and turnover was much higher.
The company website is replete with stories by employees that “testify” to how great it is to work at Market Basket and how, when he visited the stores, Arthur T. showed real concern for their needs.
The “wonderful world” that was Market Basket was shattered on June 23rd, however, when the “bad” Arthur replaced the “good” one with two execs from Wall Street.
The new management fired the eight long-time store managers in order to squash what they saw as a coming rebellion against the pro-corporate changes they wanted to make. Workers went out on strike and picketed, warehouse workers stopped making deliveries and customers organized boycotts. The company cut remaining part-timers’ hours to zero – without formally laying the workers off, to avoid unemployment compensation charges. Within days, shelves were empty. Managers, workers and customers demanded the return of the “good” Arthur T.
Evidence does point to Arthur T.’s considerable managerial skills, which are reminiscent of Sam Walton’s in Walmart’s first years. As at Walmart, store managers and a favored layer of workers could do relatively well at Market Basket, albeit working merciless hours. As at Walmart, however, Market Basket’s bottom layers consist of low-paid, part-time workers, mainly women, youth and minorities.
Unseen in this pyramid of exploitation, but very much alive, are agricultural, industrial and transport workers in the U.S. and internationally. Market Basket’s owners and managers also benefited from the rising rents charged tenants in the chain’s vast properties.
And as at Walmart, unions have been successfully kept out of Market Basket. When unions offered help at rallies this summer, the striking managers turned down the offers.
The governors of Massachusetts and New Hampshire entered the fray, trying to organize the sale of Arthur S.’s majority to Arthur T, a $1.5 billion deal announced last Wednesday.
As of today the settlement appears to be holding. Arthur T. is using half a billion of his own cash, and going $1 billion into debt, to buy out his cousins’ 50.5 percent share and regain his position as CEO. Restocking of store shelves has begun.
While most of the media and lawmakers are trumpeting this as a huge victory for the workers many caution that it is too early to make that assessment. Servicing the debt, first of all, will be extremely expensive and will put pressure on even “good” managers to use models of business much less friendly to workers.
Then there is the not-small matter of the three fourths of the Market Basket workforce that is part-time. Many of them, after years of working for the company, earn unglamorous wages between $8 and $10 an hour and they have no health or retirement benefits. When you take into consideration the overall circumstances faced by the majority of the Market Basket workforce, then, the picture at the chain is much more like the picture at Walmart than it is like the portrait painted on the Market Basket website.
There are reports that in at least some cases managers asked these low-paid workers not to report to work during the recent turmoil and that the “good” managers, in effect, helped implement the policy of slashing of hours to zero in order to avoid unemployment costs for the company. Some of these part time workers on the picket lines said their mangers had paid them to carry signs.
Interestingly, while the full-time workers had their hours restored after the Arthur T. comeback last week, the majority, the part time workers, have not yet had their hours restored.
All of this proves, unions say, that, ultimately, the best protection for both the part-time and full-time workers at Market Basket would be union membership. Many New England supermarket workers, including those at Shop and Stop and Shaws, are unionized with the United Food and Commercial Workers.
“Market Basket workers have an unassailable right to engage in collective action in defense of their benefits and working conditions,” said the United Food and Commercial Workers in a statement. “These workers deserve a guarantee that livelihoods will not be jeopardized by a change in management.”
Moira Bulloch, a spokesperson for the UFCW, said that the union will continue to keep Market Basket workers informed about their rights and that the union has people ready to talk with Market Basket workers. She noted that union members from the other supermarkets in the area had joined the workers on the picket line.
Bulloch said the union is asking workers to think long-term when it comes to protecting their interests. “When he (Arthur T.) retires, Market Basket will be back on the auction block or parceled out amongst the heirs. The only way that workers can preserve their Market Basket and their jobs is to secure a union contract,” she said.
There are other important lessons coming out of this summer’s remarkable Market Basket saga. Not least are the contradictions amongst owners. Even in families, very little is sacred when it comes to capital. As in this case – where all the capital was held by one family – the individual family members were at each other’s throats.
There are tremendous contradictions, in turn, between Wall Street families and the ‘owners’ of franchises such as McDonald’s or smaller chains such as Market Basket. And there are tremendous contradictions, in turn, between franchise ‘owners’ and their store managers and assistant managers, who are often worked to death.
But most of all there are the contradictions between managers and all the workers below them who are denied independence and decent living conditions. Skilful labor organizing will use all of these contradictions, and enlist customers and neighbors, not just to unionize but to bring down the rotten system of private ownership and exploitation.
Photo: Market Basket supermarket employee restocks shelves, Aug. 28, in Chelsea, Mass. (AP Photo/Steven Senne)