{"id":185719,"date":"2014-08-28T20:16:00","date_gmt":"2014-08-29T01:16:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2014\/08\/28\/for-once-labor-beats-the-asset-strippers-in-management\/"},"modified":"2014-08-28T20:16:00","modified_gmt":"2014-08-29T01:16:00","slug":"for-once-labor-beats-the-asset-strippers-in-management","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2014\/08\/28\/for-once-labor-beats-the-asset-strippers-in-management\/","title":{"rendered":"For Once, Labor Beats the Asset Strippers in Management"},"content":{"rendered":"

Arthur T. Demoulas will be buying out the other side of the family for the Market Basket grocery chain<\/a>:<\/p>\n

After the intervention of two governors and an enormous public outcry, the chaos that has paralyzed the Market Basket supermarket chain ended Wednesday night with a deal between the two warring factions of the Demoulas family, the company said in a statement.<\/span>

<\/span>The deal approved by the chain\u2019s board essentially meets the sole demand of the workers who have been staging huge public rallies for six weeks: that Arthur T. Demoulas, who was president until June, be reinstated to lead the company.<\/span>

<\/span>His cousin, Arthur S. Demoulas, and his allies agreed to sell their 50.5 percent stake in the company to Arthur T. Demoulas and his allies, who own 49.5 percent, according to the statement.<\/span>

<\/span>As part of the deal, Arthur T. Demoulas will return immediately \u201cwith day-to-day operational authority,\u201d according to the statement. But he will not technically become chief executive until the deal is finalized over the next several months.<\/span>

<\/span>The current co-chief executives, Felicia Thornton and James Gooch, who were installed by Arthur S. Demoulas, will \u201cremain in place\u201d until the deal closes, the announcement said.<\/span>

<\/span>It was the firing of Arthur T. Demoulas and the installation of Ms. Thornton and Mr. Gooch that touched off protests by employees in mid-July. The deal includes a set of penalties and incentives intended to get Arthur T. Demoulas to finalize the transaction by the end of February.<\/span>

<\/span>The settlement would end one of the strangest labor actions in American business history, one that disrupted a low-price grocery chain that attracted two million shoppers in Massachusetts, New Hampshire and Maine. And perhaps most surprising, it ends with the sole demand of the workers, from top management to the lowliest clerks, being met.<\/span><\/p><\/blockquote>\n

Basically the good Arthur, Arthur T., was given the boot, and the evil Arthur, Arthur S., brought in some MBA types to do their magic<\/a>:<\/p>\n

After a long family feud, the majority stockholders fired their cousin, longtime CEO Arthur T DeMoulas. He had built the business on low prices, high wages, and ZERO company debt- All employees get profit sharing and a livable wage, and many have been with the company 20, 30, even 50 years.<\/span>

<\/span>Arthur T. was replaced with the former president of Radio Shack, with an evident goal of strip mining the wealth from the company–raising prices, cutting benefits, loading up with debt, and selling off real estate–in order to pay out higher stock dividends to the controlling shareholders.<\/span>

<\/span>The employees revolted. Top executives walked off the job and picketed in front of headquarters. Employees from managers to baggers are using their vacation time to protest outside stores. 68 out of 71 managers have pledged to quit unless Artie T is reinstated or allowed to purchase the remaining 51% of the family-owned company. Deliveries have stopped and twitter is full of photos of completely bare shelves. The board has responded with termination letters and threats. <\/span><\/p><\/blockquote>\n

In case you think that this was a fever dream, it should be noted that, at the start of this conflict,”The board voted to distribute $250 million to family shareholders, an action opposed by Arthur T.<\/a>” <\/p>\n

The 50.5% stake was purchased for $1.6 giving a market value of $3.2 billion (probably less; it appears that Arthur T. probably overpayed a bit.), and they wanted to make a payout of nearly 10% of the value of the company to shareholders.<\/p>\n

You know how it works:<\/p>\n