From the Globe:
The agreement authorizes Arthur T. to manage the business and stabilize operations at its 71 stores, where employee walkouts and customer boycotts had brought business to a virtual standstill for eight weeks. However, until the deal closes, he will continue to work with the chief executives hired to replace him, Felicia Thornton and James Gooch.
Artie T. now has to figure out how to screw his cousins before the deal closes or hits a snag while having a couple of pairs of eyes watching his every move.
It’s the difference between a teenager having his parents go away for weekend or not.
Wait. Bad analogy. More like a bank employee planning an inside heist on a day the boss is away only to learn the night before he’s changed plans. Can’t rob the place with the boss there.
That is what Artie has been fighting so hard for the past two weeks and he didn’t get it.
Once they come back to work they’re not going out again so Artie T. better be able to close this deal.
It ain’t over til the fat lady in aisle 14 sings.
mannygoldstein says
The larger point here is that workers pulled together, yelled a collective “#%^* you”, and got what they wanted. This is the first time in decades that something like this has happened.
Hopefully, like Lexington and Concord, this will mark the beginning of a war that ushers in a new zeitgeist, a return to the days of respect for working Americans, an end to the Predator Class doing whatever they want to whomever they want.
regularjoe says
How do you think Artie T will come up with the 1.5 billion? No more raises, bonuses, 4% at the register discounts etc. The prices will slowly rise and the wages will have to stagnate. The main reason for the past beneficence of Artie T was his hatred of the George Demoulas branch of the family tree. Now it’s time to get back the 1.5 billion. The law of unintended consequences will soon be at wok for all to see.
kirth says
The persons responsible for the sadness are Arthur S. and his fellow coupon-clippers. They are the ones who precipitated this whole mess by demanding that AT not pay bonuses to the employees, but pay them instead, then kicked him out when he resisted. Whatever the final outcome, they will wear the black hats in our memories.
jwarren says
There is an assumption that he has the $1.5B cash and of course wants it all back. He could make it a cost of business, use traditional borrowing and affect the bottom line. Or, the company could reorganize, go public with about 49% of it. He might keep the company privately held and offer shares to employees. If he owns 100% of the company today, I can see him relinquishing a minority share. Employee owned companies, not such a bad thing.
eb3-fka-ernie-boch-iii says
Mortgaged all the property so the banks now own that and he got five hundred million from a private equity/venture capitalist fund.
The banks and the venture capitalist will now replace the Arthur S. faction on the board.
Artie T. will self-destruct because he has no idea how to play fair with other people’s money. And these new guys are much different than his cousins. They make their livings keeping CEO’s in-line and they have no emotions.
kregan67 says
Where those workers helped destroy tens of millions of dollars of business and brand equity that *will* have to be made up somewhere and somehow.
I too am glad they got this outcome, but I don’t think we know yet the true calculus of what it may cost those same workers and shoppers in the future. I don’t think anyone does.
But we do know that Artie T now has investment partners and those financiers are going to want to see a return on their backing eventually.
I’ve been sick of this story for weeks, but the fact is it has a long,long tail and is ages from being over.
eb3-fka-ernie-boch-iii says
n/t
mannygoldstein says
And I don’t think vendors or lenders will “ding” them as long as ATD is firmly in control.
gmoke says
Market Basket may find that it has built brand equity through this ordeal. The worker and customer solidarity in the face of a probable vulture capital action is unprecedented and been noted nationally. If ATD is able to provide the lower prices and the worker benefits that historically Market Basket has provided, the brand will come back stronger than before. Surely the workers are going to be coming back to work stoked with what they now consider to be a victory. That means something.
I’ll be going back to the Union Square store Friday and see what I can see.
johnk says
but Arthur S. was playing checkers while Arthur T. was playing chess. It’s an old saying but in this case it fits perfectly. Arthur T. positioned his offer as the only one they could accept. Maybe with legal ramifications if it wasn’t taken. At the end of the day Arthur S. even with 50.5% didn’t have control, and that’s crazy. What a dimwit, he had no other way out. And lets all understand Arthur S. was selling this thing from the onset and trying to screw Arthur T and employees didn’t matter to him.
jconway says
For the workers, the customers, and the state. Glad to see this impasse closed and I appreciate the leadership of Gov. Patrick and Gov. Hassan in arbitrating the final deal. And the cherry on top? Ernie can finally stop bitchin’ about this!
justice4all22 says
Market Basket lost tens of millions of dollars in this latest board scuffle because the Artie S. side was peeved over the losses they incurred on investments in Fannie & Freddie in the 2008 crash, where they lost $46 million, along with how many other firms that believe their investments to be sound? If you’re going to pretend to be in the know, try to be reasonably well read. You keep going over the old issues that were already resolved by judicial fiat. The latest board battle was over the investment losses and then to recoup, the board wanted to go after employee benefits. When Artie S took over the board – he failed miserably to plan….so clearly he’s decided to use you as some sort of PR guy. Oye – still not planning well, is he?
eb3-fka-ernie-boch-iii says
He got every dime plus a premium from Artie who had to leverage everything he and his sisters could come up with. No discount for the mess he caused. In return they agreed not sue him for all the damages he’s caused the company.
This is far from over. In the future when Artie T. comes crashing down Arthur S. and his side will be reading about on a beach in the Mediterranean counting the 2 and half billion they they got from Artie T’ and his sisters’ savings.
Anyone who doesn’t think Arthur S. won is a fool.
centralmassdad says
But one thing we do know is that you will be able to say that you were right, having changed your prediction, as well as your definition of “win” so often that you will hit it somewhere.
At least dipshits like Dike Morris get paid to spew bullshit like that.
justice4all22 says
Arthur S. lost. You know why? He took a very sound business and proved to the world he couldn’t run it. In fact, he proved for six long weeks that the board member (the sister-in-law) was right all along when she denied him her vote all those years and kept him from taking control- he’s incompetent and couldn’t be trusted to do the right thing by and for the business. She only flipped because she wanted to cash out. And did you know that Artie S. attempted to put his shares in trust, in order to compete with Market Basket – because the sister-in-law sided with Artie T? Oh sure, he can console himself with his money but it sure doesn’t make him a winner. It makes him a rich loser. He lost his old man’s business to the dreaded other side. BTW – you do know what Arthur T. was 16 years old when Uncle George died, right – and Arthur T’s father, Mike, was the one who started the systematic screwing of George’s side of the family. You act like Arthur T was the guy who started the whole thing…but he was only 16 when George died.
ryepower12 says
This continues the ongoing trend of EB3 being very, very loudly wrong on just about everything. Arthur T was never, ever, ever getting Market Basket back. Whoops. The prosecution would never get a conviction in the probation case. Oops. And let’s not forget about what has essentially amounted to his ‘free Whitey Bulger’ campaign that has stretched years. Eek.
The Bobby Valentine of pseudonyminous ‘insider’ analysis.
Ernie – you may want to lay low on these predictions that border on pronouncements.
Actually, scratch that. They’re good for a chuckle.
eb3-fka-ernie-boch-iii says
The banks do and he’s still a thief. It’s amazing what you people will overlook in the name of Communism.
ryepower12 says
You’ve been wrong on this so many times, always moving the goal posts further along.
You’ll have to pardon us at this point for thinking you’re not an authoritative person on this subject.
Christopher says
…could spin getting his company back as giving in, and Arthur S. getting a ton of money as a win. Of course he got money; that’s generally what happens when you sell something.
bob-gardner says
about how Pravda would report on a two horse race where an American horse beat a Soviet one.
“The Soviet horse finished a strong second: the American horse finished next to last.”
kirth says
From July 18:
And yet, it did happen.
July 24, after numerous falsehoods in his post on that day were pointed out, this is his reasoned response:
From August 3rd:
Hysteria does seem to characterize a lot of fakernie’s thoughts on the MB situation.
Also from the same post:
But they did win by doing that
August 5th:
. I guess their atomic bomb was a dud.
Later the same day:
It goes on and on. Somehow, none of fakernie’s predictions came to pass. None.
Pixar should have cast him in the role of Mr. Incredible, because he’s worked hard to earn that title. I say we give it to him, and I will henceforth refer to him with it. Ladies and Gentlemen, I present MISTER INCREDIBLE!
Christopher says
n/t
centralmassdad says
EBII Old Job
jconway says
‘I saw ole Artie T down at the Silver Fox on the Parkway in Everett, boy what a shithole that place was, I can still remember dating this broad from Saugus who never cooked meatballs the way ma made em, I knew we weren’t gonna last, but she would always come into Everett back when I was freebasing in the Gremlin with, wait where was I? Oh yeah, dat Artie T steps outta da urnul when I was getting my fantasy on, remember the old Fawcett poster?, anyway he steps out and shakes all over my leg! On my friggin leg I tells ya! So you can’t say I have it out for that Greek bastard, since he clearly has it out for me’
-EB3 at some point
I wonder if he is a transplant from California who lives in Wellesley and just gets his writing style from this monologue
SomervilleTom says
It really is instructive to learn about and remember what happened to the workers at KB Toys. I’m quite sure that when the Bain “investment” was first announced, it was a promoted as a “great day” for KB Toys.
The real estate remains the prize — and we should all keep our eyes on the prize.
This isn’t NEARLY over. There WILL be outside funding. It is likely that the real-estate will end up being the collateral used to obtain the funding that allows the buy-out.
Here’s what I expect to unfold over the next few months or years:
1. The grocery business is sold to some entity like Hannafords
2. The real-estate is sold at a substantial profit (which is the juice that makes the deal work)
3. All sides of the DeMoulas family make a boatload of money
4. The so-far unnamed third-party investors make a boatload of money
5. The workers end up working for an employer no better or worse than Hannafords.
This is NOT a happy ending to some fairy-tale. It is the first stage of a business transaction, and — as in any casino — the house ALWAYS wins.
centralmassdad says
Though I think that if they guy were so hot to liquidate, he would have done so long ago.
ryepower12 says
Isn’t that true of just about any financing deal? why are we supposed to get up in arms if it could possibly be true now? How would it be different than in almost any other big financing situation?
It’s really simple: if Market Basket gets back to normal and starts bringing in money again, it will pay off it’s loans. If it doesn’t, the company goes under. Without fully operating stores, the real estate isn’t doing a whole lot of good anyway.
SomervilleTom says
It doesn’t sound like you’re paying attention to how hedge funds and investors who like them use leveraged buyouts.
Making the company “successful” takes time and entails risk. That is NOT how these guys play the game.
The real-estate has the same value with or without operating stores. The best time to SELL those operating stores is sooner rather than later, to cover the risk that things get worse (see Sears). So the new owners SELL the stores, retaining the real estate.
The real estate is then sold, for as good a price as possible, ensuring that the loan used for the acquisition is paid off (at substantial interest, usually).
Whatever is left over is divided up and sold.
At the end of the day, the company is liquidated, the investors and the DeMoulas shareholders have made a very tidy profit, and the workers are either working for somebody else or on the street.
The point here is that all this good-guy/bad-guy hero/villain stuff is just make-believe.
It’s ALL dollars and cents. Nothing more, nothing less.
ryepower12 says
KB Toys was a real issue, but this isn’t that — and it does things a disservice to try to conflate it.
Market Basket may well fail, but if it does it won’t be because of a Mitt Romney situation. It will be because the costumer base doesn’t return. Plenty of risks, but different than KB Toys, with much different intentions, too.
jconway says
The Bain side was the Arthur S side, it just lost. Go celebrate by visiting that linoleum tiled wonderland with sawdust on the floor.
SomervilleTom says
The “Bain side” is the still-unnamed outside investor. BOTH sides of the DeMoulas family will benefit.
mannygoldstein says
They’d be rightly worried that the employees will raise hell again. People pay be bucks for certainty.
Private equity might possibly buy something like this as a project, but they’d probably want a steep discount,
kirth says
Or saying similar things. My problem with the somervilletom version of coming events is that it’s predicated on an assumption that the MB workers and customers are all stupid, and that the workers went way out on a limb for nothing. I don’t believe either of those things are true, so I’m not buying your version.
SomervilleTom says
My version of the upcoming events is that the MB workers and customers are powerless, by design. That is NOT “stupid” — I try to avoid blaming victims.
In my perhaps overly-cynical view, the power-players here have long since incorporated the possible actions of both workers and customers into their strategy, and have adjusted that strategy to work whatever the workers and customers do. Such strategizing is what power-players DO, that’s why hedge-fund managers and VC firms succeed, that’s how the game is played.
You guys sound like baseball fans who are shocked to hear that a professional pitcher occasionally (or not so occasionally) moves a batter away from the plate with high inside heater, or throws a curve ball now and then.
judy-meredith says
C’mon this is America, people sell business back and forth all the time, but nobody has ever seen ordinary line workers mobilized into action like this.
SomervilleTom says
There are some examples here, and a more technical analysis here.
From this source comes an interesting list:
– Hertz
– Capmark
– Albertsons (an interestingly close example)
– Freescale Semiconductor
– Kinder Morgan
– Alliance Boots
– Hilton Hotels
– Clear Channel
– Alltel
– Harrah’s Entertainment
– First Data
– Hospital Corp. of America
– Equity Office Properties
– Energy Future Holdings
– RJR Nabisco
I grant you that the theater is impressive. It is irrelevant to the outcome.
kirth says
in support of a company executive? If not, then you’re not addressing judy-meredith’s point. Doesn’t look to me like any of them were job actions at all. the Albertson’s one is not, as you claim, “close.”
judy-meredith says
Is demeaning & disrespectful. You sound like management blaming a work stoppage on outside agitators or union thugs –‘woops!
Listen to the very moving interviews of the returning workers…they know what they did by sticking together.
kirth says
I was in a MB at lunchtime. Every single one of the workers had a big smile the whole time. They won, and they know it.
Christopher says
I only needed milk, which I often get at a convenience store, but wanted an excuse to shop at MB today. When I helped myself to a cart a staffer offered to wipe down the handle for me.
SomervilleTom says
Please don’t put anti-labor words in my mouth.
My very first comments on this subject were to the effect that the ONLY effective thing the workers can do is organize a union, and that if Arthur T genuinely cared about them, he would use his resources to fund and enable that.
Where on EARTH have I said anything negative about the work stoppage? My comments are about the OWNERS, about the media mythology being created, and about the unspoken reality that underlies this theater.
I have no problems with candid and frank exchanges of view, but really — please rethink your attack.
I’m sure the current round of interviews are very moving. My point is that about two years from now — UNLESS THE WORKERS ORGANIZE — there will almost certainly be painful interviews with tearful workers bemoaning the very real fact of their dismissal by Hannaford’s (or whoever the parent company ends up being).
The ONLY way for the workers to protect themselves is to ORGANIZE — NOW. I hope we can agree on that.
centralmassdad says
without the aid of a union. Why would sending dues to AFL-CIO have helped this situation?
Also, if the MB business plan now fails, as it well might, why would a union prevent layoffs?
As far as I can see, if these folks had unionized, the only difference would be that their money would be spent in the Wisconsin governor’s race.
SomervilleTom says
Sorry, I disagree with you about this. I reject your premise that an ad-hoc roll-your-own work-stoppage is the same as a union. To answer your question more specifically, the result of having a real union will be an enforceable contract that survives the sale of the company.
jconway says
CMD:
I totally agree that this was a great, organic, grassroots workers revolt and it did not require a union. This should give workers all across the country an inspiring look at how collective action can work on their behalf and it should give CEO’s an example of how important earning worker loyalty by treating your employees well can be to performance, growth, and stability. Unions are also recognizing that organizing these actions, even if they are not part of a membership drive, can lift the boat for all workers. A great story, one that shouldn’t be undercut by EB3 and Tom’s cynicism.
That said, we know the grocers union was already on the MB worker’s side, and had they already been unionized, union money would’ve been spent to cover their lost wages and insurance via a strike fund, and they would’ve gotten national support. The latter point is why money spent in Wisconsin is money well spent , since workers rights don’t exist in isolation, they need to be strengthened by solidarity with workers in other states to make a truly nationwide movement. And workers in Wisconsin or workers right here at Stop and Shop (which is unionized) would’ve stood shoulder to shoulder, if they weren’t already.
To Tom:
Tom makes some good points, I got into an argument with my fiancee about this last night (she has been following this a lot more closely than I thought-and sounded like Eb3 with all her knowledge of the drama!) She was playing devils advocate for Arthur S, saying we didn’t have a good idea of how he would’ve governed since Arthur T denied him a shot he always wanted. She found an article profiling him where his own ideals and commitments were mentioned, and she critiqued our coverage as one sided. That said, I responded that the CEOs he was bringing in would’ve wrecked the company. Tom seems to agree with me on that point.
Where he agrees with Ernie and my finacee is that this could all be undone by Arthur T if he has to, to pay off the loans or if revenue doesn’t come back due to the losses of the stoppage, and that liberals shouldn’t be rooting for one, historically unreliable person, to continue to be a benevolent dictator as he has been, but rather, we should be rooting for the workers to take ownership of the company either through a cooperative plan or via collective bargaining. Now that he has full control of the company, we will see what kind of man Arthur T is, and if he will continue to treat his workers ‘like family’, or if he will treat them like he treats his actual family.
centralmassdad says
I was under the impression that you thought that the endgame will be a shuttering of the company, and a liquidation of its assets, with large gains realized by the owners on the various real estate holdings.
A contract wouldn’t affect that.
A sale of the chain to a new owner, who would also be operating grocery stores would be different, though the contract can’t really prevent layoffs of staffing reductions.
Christopher says
…but I saw one sign at a MB rally which said, “Stronger than a union – we are FAMILY!”
jconway says
I’ve been a long proponent of cooperative economics_also known as ordoliberalism, christian democracy, or distributionism as a true ‘third way’ between laissez-faire and socialism. After reading ‘How Much is Enough” together, my fiancee has come on board with this idea as well (since reading someone else advocate it made a lot more sense than all the times I discussed it 😛 ).
These philosophies would argue that cooperative economics would supplant the needs for unions since labor is management under that system, the companies are democratically run, and the profits are shared either equally or in a far more progressive ratio than the gross discrepancies we see in neoliberalism. It would be run much like a family, and many of the proponents of this system would argue it is based on religious and ethical principles that are found first in the family.
And it has worked, Mondragon is a globally competitive company organized this way, and Publix is a Wal-Mart slaying low cost regional supermarket giant much as Market Basket is, that is entirely worker owned. Artie T’s ESOPs are quite generous and workers own around 15% of the company, now that Artie T has bought out his relatives, perhaps transitioning to this model would strengthen the bond between worker and CEO while also protecting the workers. Then that statement could be true, at the moment, it is still a top-down organization and collective bargaining, while non-essential from a wages and benefits standpoint, is entirely essential from a power standpoint. If Artie won’t share the power, and he clearly didn’t like sharing it with his own relatives, than unions are still needed to act as worker advocates.
SomervilleTom says
As the product of a dysfunctional family, I find such references unsettling at best.
It seems to me that the entire DeMoulas spectacle is Exhibit A in why companies are not families and should not be.
I can’t fire my parents or my children for incompetence, betrayal, or downright thievery. A loving parent doesn’t make every decision about every family member based on maximizing shareholder value or even long- or short-term profits.
Corporations are about MONEY. Families, at least functional families, are about love.
The two are VERY VERY different.
Christopher says
…the positive connotations of the word family were intended. They are about love, and people going to the ends of the earth and putting it all on the line for each other. That’s exactly what the sign meant and in case you hadn’t noticed ATD hasn’t run MB like a typical corporation.
ryepower12 says
Hanniford tried and failed at that.
Tom, please. You are not entitled to your own facts, no matter the density of the tin foil you have clinging to your head on this subject.