Safeway takeover about more than just the price of stock shares

In the flurry of press coverage about the proposed takeover of Safeway by a private equity firm much attention has been paid to the need to increase share price and none has been given to the effect such a change in ownership will have on the workers at the grocery chain.

It is my privilege to be president of the union that represents Safeway workers in the western part of Northern California. Our union is familiar with the odds-on favorite to take over Safeway, the private equity firm,  Cerberus.

Our members at Albertsons got a new boss in 2006, the same one apparently slated to take over Safeway. Due to the completely incompetent management of Idaho-based Albertsons, the chain was vulnerable to a takeover by Cerberus. For the next 10 years the new employer, modestly named after the mythological dogs that guard the gates of Hell, sold every piece of property
that wasn’t nailed down and then some.

The results in terms of store closures, reductions in hours and rundown stores were miserable for the workers and shopping public alike. Our members at Albertsons experienced no upside to this corporate takeover and had they not been represented by  the UFCW, the results would have been far more devastating.

Back in the 80’s the movie Wall Street came out. The outfits that took over companies and jettisoned properties and workers with equal zeal back then were called corporate raiders, green mailers, arbitragers and leveraged buyout specialists. Their motivation was pretty clear – racking up huge financial gains for themselves and their deep-pocketed investors. Why build something when you can destroy it and reap a quick buck?

Today we have The Wolf of Wall Street. Hollywood’s portrayal of the characters performing corporate takeovers has remained fairly consistent. Off the movie screen, however, corporate America has succeeded in recasting corporate raiders as job and wealth creators. No matter how this is recast or repackaged the bottom line is the hard-working men and women employed at takeover targets get the short end of the stick.

The name Cerberus comes from Greek mythology. This situation is reminiscent of a Greek tragedy where everyone knows what’s going to happen but can’t do anything about it. It would be best for the workers and shopping public if the greed and avarice of the Safeway and Cerberus negotiators led to the demise of this deal. If the takeover goes through the UFCW will do its best
to make sure that the Albertsons story doesn’t repeat itself at Safeway.

Ron Lind is the president of Local 5 of the United Food and Commercial Workers.

Photo: Cerberus, the private equity firm named after the Greek mythological dogs that guard the gates of hell, is trying to take over Safeway, the supermarket chain. Edublogs.org