Private Equity to Rockford Workers: Because We're Swine, You Walk the Line

Kerry Candaele, a producer for Brave New Films, is currently interviewing workers laid off as a result of private equity takeovers for BNF's second short documentary in its "War on Greed" series at www.warongreed.org.

Rockford, Illinois, as a city, is a bit player in our national drama. The city did, for a few years in the mid 1940s, host The Peaches, a perennial champion of the All American Girls Professional Baseball League, the team on which Madonna and Tom Hanks went through their antics in A League of Their Own (remember "There's no crying in baseball")? But in general America's kleig lights are focused elsewhere, on celebrity cities and celebrities themselves, where our journalists tag along after the money and the mayhem.

But Rockford deserves a second look this holiday season, as 137 men and women walk a picket line in sub-zero weather, locked out by the Accuride/Gunite Corporation recently sold by the private equity firm Kolhberg Kravis Roberts & Co. (KKR), whose CEO, Henry Kravis, is the subject of Brave New Films' new War On Greed video series.

In our brave new world of high finance, private equity firms have maintained, until recently, an aura of celebrity themselves, claiming the high ground of free-market orthodoxy in their breathless claims -- like a good Victorian parent to the spindly adopted orphan -- about taking undervalued and underperforming companies, building them up and selling them off in a win-win-win trifecta for workers, investment partners, and the U.S. economy as a whole. Some of the workers in the Accuride/Gunite brake drum foundry in Rockford, however, would beg to differ with KKR, Mr. Kravis, and the whole private equity model. In fact, they are calling Henry out.

David Buchanan and Rick Kardell, both active members of the United Auto Workers (UAW) with long family connections to the foundry, stood around a metal drum filled with firewood outside the Gunite front gate on Rockford's east side where I visited with them this week. Gloved hands outstretched in iconic fashion over the flames, snow on the ground on all sides, David and Rick spoke with bitterness about the realities of KKR's buy out of Accuride/Gunite in 2005. "KKR came in with an aggressive new management that changed the whole nature of the workplace," Kardel points out. "For years we felt like a family, a unit, I mean it was a two way street. We would give when we had to, and they would give when they had to, but that's gone completely. It's not there anymore. There's no relationship between the union and the company, and they're trying to get rid of that even more. They're trying to take the voice out of the workplace right now for us. But that has been since KKR has come in and done this."

Things have changed at the Rockford foundry. The new Accuride/Gunite is home to numerous OSHA violations (including a collapsed floor that left workers hanging in the air, waiting to be rescued by the local fire department), and a drain on investment in this profitable company. Buchanan, a man with charisma to burn whose family has given over 50 years to the company, sums up the KKR culture with a story that is the sine qua non of their efficient, lean and mean management style.

Wrapped in several layers and wearing one of those floppy-ear hats that make him look 200 pounds to the wrong side of healthy living, David's words vaporize as they leave his mouth: "One of the employees' brothers had a heart attack and the employee left work and went to see his brother. Well, his brother died. He ended up dying. When the guy came back to work management disciplined this man for the day that he left when his brother had the heart attack. They said the reason why you're being written up is because your brother didn't die that day. HE DIDN'T DIE THAT DAY! This is what kind of company that we're dealing with. This was a model employee. This was somebody who didn't miss work, worked 60, 70 hours a week, was there all the time. He was a good employee, and he had no write-ups prior to that. And they disciplined him for missing that day because his brother did not die on that day. Sad."

For those who prefer their stories less Bob Cratchity and more of a Scroogist counting-of-the-pennies, one internal study shows that KKR, which sold Accuride/Gunite in May, 2007 for less money than the purchase price, still made a profit in fees worth millions and the writing off of "carried interest," a tax loophole that even Warren Buffet thinks should be eliminated. KKR, by one estimate, extracted over $191 million and over $16 million in fees.

Henry Kravis made over $50,000 an hour (that is not a typo), every hour of every day last year. David Buchanan makes roughly $22 an hour in each inelegant forty-hour week.

Indeed, there is no crying in baseball, but there ought to be a howl of outrage -- in Congress, in the business press, in the country at large -- at the worst of the private equity aces who have now no doubt flown south "to winter" in St. Kitts or shoosh about in the Dolomites, while the comrades at Gunite bide their time on the line and, for the moment, bite the bullet.

I'm trying not to be mawkish here, as there is both good cheer and a bit of despair on the line in Rockford, as there have been since the first picket line took shape in front of an ancient pyramid or a half-dug ditch during the Shang Dynasty. But I'd take this sweet and sour mélange any day over the gaudy Upper East Side bliss on Park Avenue where Henry Kravis maintains his twenty-six-room townhouse mansion. For our benefit, these contrasting and contemporary images can focus the mind.

These facts pose the ultimate questions -- and they call Henry Kravis to the conversation -- about what it is we are here to do on this earth. Are we here to make billions, refine the art of the deal, to hold to the contract of mutual indifference that seems to be an increasing feature of American life? Or do we act in accordance with virtues that have more to do with thick solidarities between people who, even though unknown to one another and a thousand miles away, need to care and to connect? These questions should answer themselves, and easily; but, seemingly, they do not.

Comments

[maryyooch]

it's happening everywhere. our company was recently bought out and over 50 people lost their jobs. what, no union? we are all screwed. and the layoffs keep on coming and coming and coming...........

[ICantBeBothered]

"Henry Kravis made over $50,000 an hour (that is not a typo), every hour of every day last year."

By my calculations that's $438,000,000.

And that isn't enough?

God help us.

[oldpotsmuggler]

My father was a union man, as was his father. Railroads in the first instance, and rocket motors later. If the logistics were not impossible, I would even have been in favor of some sort of a marijuana industry association. In my 60 years, I’ve never wavered from my conviction that unions have been an unmitigated force for good, even when I’ve seen them be their own worst enemy.

Working men and women the world over need to collectivize their efforts towards promoting their general welfare. Clearly, the only institution on the planet easily and quickly adaptable to promoting such a course of action is organized labor. Capital (big business) cannot be trusted to honestly and generously value labor, and government is far too fragmented for the foreseeable future to get any organizing done.

To my ears, this planet is crying out for true leadership. Any kind, any time, anywhere. I’ve seen enough to know that there is an “international” component to labor unions. I wish it was headed by the equal of the union giants of old, and committed to act as one to do for the welfare of all of our working brothers and sisters what Americans need to know daily gratitude for. We are what unions played the majority role in creating, and who we are will be diminished by exactly the extent to which we do not aspire to spread good fortune everywhere.

[Desiderata]

Where have all the unions gone?
Long time passing.
Where have all the good jobs gone?
Long time ago.
Where have all the workers gone?
All been laid-off__everyone.

When will they ever return?
When will they ever return?

[PadrePio]

This post is why I am voting Democrat forever. I know the Democrat's are not perfect but when compared to the Repug's they are a shining force in America. Guess that tells you where America is at the dawn of the 21st century

[Scott1960]

I live in Rockford. Thus company tried to get the city to approve building a trailer park on their property so they could have people work there without crossing the picket lines. Pure class.

[sparkandy]

Let the revolution begin! The plutocrats are the ones who promote separatism based on race, sexual preference, culture, age, etc. As long as they can keep workiing people convinced that "other" is bad, they've got us in their power. As soon as working people wake up and realize we're all in this together, we'll take the power back. There's an old Peter, Paul and Mary song that goes in part,

Because all men are brothers
Wherever they may be
One union shall unite us
Forever brave and free

That needs to be the rallying cry of the workers. We need to forget the silly crap like what color someone is, what they eat, read, watch on TV,how they raise their kids,where they go to church, and unite under a single banner as WORKERS!