Main Street

Stella D’oro and Private Equity

In May, I wrote about the struggle between union workers in the Bronx and a private equity firm that had bought out the Stella D’oro biscuit brand.

This week, Tula Connell brings us an update—and it’s not good news.

Workers returned Tuesday to the job at Stella D’oro Biscuit Co. in the Bronx after a judge ordered the company reinstate the 136 employees who had remained strong throughout a brutal 11-month strike. But before they could even walk through the doors, they were greeted with the anti-union response by the company’s private equity firm owners, the 21st century’s mutation of the robber barons: Brynwood Partners announced it would shut down operations in October. (“Private equity firms” is the euphemism those leveraged buyout corporations adopted after leveraged buyout got a bad name in the 1980s.)

Tula has lots of gruesome details, but I think this one takes the cake:

“Last year, they told us upfront, because we’re a hedge fund, our investors expect a higher rate of return, and your members should expect a wage cut,” Nikolaidis says.

In other words: Yes, we bought this company with a name for quality and a long history of profitability. But our only interest is in squeezing it dry, no matter what we have to do to achieve that.

It’s sickening. And it’s the economy we live in. And that’s why it’s important to fight for something better.