As UFCW Local 400 members prepare for contract negotiations with Safeway, the union says one factor looms as perhaps the greatest obstacle they face: the toxic impact of private equity. “Private equity is the ultimate example of our rigged economy,” says Local 400 President Mark Federici. “They’ve gamed the system so no matter what happens to the corporations they acquire, it’s ‘heads they win, tails you lose.’” In 2013, Cerberus Capital Management, a private equity firm, bought Albertsons through a leveraged buy-out and then in 2015, when Albertson’s bought Safeway, Cerberus borrowed almost $8 billion dollars to finance the transaction. “As a result,” says Local 400, “the entire Albertsons empire is under the control of Cerberus and owes $12.5 billion dollars to bond-holders. Meeting this enormous debt burden has thus become the priority for Cerberus, rather than investing in Safeway’s stores and workers.” But even that’s not the whole story, because Cerberus is also paying itself millions in management fees. Federici said that success at the bargaining table depends on both inside and outside strategies, finding investor-related pressure points while empowering members to mobilize at the same time.
Read more about this on Local 400’s website.
photo: Steve Feinberg, billionaire co-founder and CEO of Cerberus Capital Management