A few months ago, Bob Moore, founder and owner of Bob's Red Mill, an extremely profitable grain company, decided to turn ownership of his multi-million dollar company over to his employees. Bob said he felt an obligation to those who have helped him build his business.
An extraordinary -- and unusual -- move for a CEO.
Most CEOs in this country -- and most corporations -- are driven by stock prices and answering to shareholders, not workers.
There's no clearer example in the food-manufacturing sector right now than Dr. Pepper Snapple Group and its CEO Larry Young. Larry is the poster child for corporate greed.
More than 300 full-time manufacturing workers at the Mott's applesauce plant in upstate New York have been attempting to bargain a new contract with Dr. Pepper Snapple, of which Mott's is a subsidiary.
"Bargain" is not what Larry Young and DPS had in mind. They simply demanded a long list of concessions: a pay cut followed by a wage freeze. A pension freeze for current workers and pension elimination for future workers. A decrease in employer contributions to the 401K. An increase in employee contributions and co-pays for health care.
Typically, when a company is looking for these kinds of concessions, it's because they are struggling financially.
Not so in this case. DPS just came off its most profitable year in the past five fiscal years: $5 billion in sales and $555 million in net profit in 2009. They expect net sales in 2010 to increase 3% to 5%, in part driven by growth in Mott's -- the Mott's line of apple products is the #1 brand of apple juice and applesauce in the United States.
Larry Young has complained to the press that the salaries of Mott's workers have gone up 10% over the past three years. He believes that labor is a "commodity," and with unemployment so high in the area his company can cut wages and pay less for the "commodity." DPS says they want to make a "correction" to the wages and benefits of the Mott's workers.
The fact is that Larry earned $6.5 million in total compensation last year -- he's doubled his salary since 2007. That's right, his salary has gone up more than 100% over the past three years while the company has earned record profits.
So let's just call this what it is: corporate greed.
This is a prime example of corporate America attempting to undermine wage and benefit standards at a time when workers can least afford it. It's about taking family-sustaining jobs in this country and reducing them to a shell of what they used to be. It's about making shareholders rich by making a buck off the backs of workers.
For a worker like Jim Mitchell, who has worked at the Mott's plant for 34 years, the $1.50 cut is a 9% cut in his overall wages. Combined with increased health care costs, he and his wife will not be able to meet their monthly bills.
Tim and Joann Budd have worked at the plant for 24 years. They have five kids, including a daughter with lupus; Tim gave her his kidney. The cuts will make it very difficult for the Budd's to provide for their family.
Larry Young probably doesn't worry about how he'll provide for his family. You don't have to when you're squeezing money out of the employees who helped build your business.
Wonder what the folks at Bob's Red Mill would think?