First item on the list? Debt interest payments.
"Market Basket uprising’s success hard to replicate" by Callum Borchers | Globe Staff August 29, 2014
As celebration gave way to reflection the day after protesting Market Basket employees won the return of their leader, Arthur T. Demoulas, it remained unclear if the miracle of Tewksbury was truly a breakthrough moment for middle-class workers or a one-time phenomenon.
I'm betting on the latter.
Ultimately what looked like a kamikaze mission ended in success, yet so much had to break the Market Basket workers’ way that it is hard to draw a formula for replicating the movement at workplaces across the country.
For starters, they were aided by an uncommonly devoted customer base that threw in with the cause by honoring a boycott that helped paralyze the chain’s 71 stores. Employees of far more recognizable companies, such as Burger King and Walmart, have experienced nothing like the solidarity of Market Basket shoppers in their own labor actions.
Related: Burger King in talks to buy Tim Hortons
Burger King may move to Canada
Wolverine Loose at Walmart
He broke through the picket line.
That may be owed in part to the central role a supermarket plays in its community, and a dynamic where the customers and workers are also friends and neighbors, which allowed people who weren’t Market Basket employees to feel as if the fight was theirs, too.
The traditional management vs. worker relationship also was turned on its head in a way that is unlikely to be seen again. Yes, Market Basket was a house divided, but the schism was in the Demoulas family. One faction of management was exiled, and the one that replaced it seemed at times ill-equipped in the face of an inspired — and novel — job action.
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It’s hard to imagine executives at other major corporations being so indecisive — or patient — and abandoning the traditional script that calls for mass firing of dissenters.
The hammer did come close to falling, though. Anxious at the deteriorating finances of the company, the Market Basket board of directors was considering a plan to shutter 61 of the chain’s 71 stores and lay off most of its 25,000 employees if the negotiations between the warring Demoulas camps carried on much longer....
In fact, many business and labor specialists predicted the standoff would end badly for the workers. After all, this was a non-unionized band of cashiers, deli slicers and shelf stockers clashing with a grocery empire with $4.6 billion in annual revenue. And their demand was particularly unsavory for Market Basket’s majority shareholders: They wanted the other side of the family, led by Arthur S. Demoulas, to cede control to their bitter rival.
“It was an unprecedented situation, and it defies everything we thought we knew about how businesses are run and who has the power,” said Daniel Korschun, a fellow at the Center for Corporate Reputation Management at Drexel University. “Many scholars, myself included, are eating crow right now.”
Yet the protest movement exacted a toll on the very employees and customers who led it. Some high-ranking workers were fired; part-timers saw their hours reduced, then cut altogether, forcing many to seek other jobs to make ends meet. Low-income shoppers who depend on Market Basket’s bargain prices turned to food pantries.
Even now, the hardships may not be over.
David Lewin, professor of management at the University of California Los Angeles, said those who lobbied to bring back Arthur T. should take a moment to savor the victory, then brace for a new reality. The version of Market Basket Demoulas and his loyalists reclaimed has significantly more debt and, for now at least, fewer customers than the one from which he was forced out two months ago.
For example, how would those debt repayments affect the company’s policy of generous quarterly bonuses and robust profit-sharing payments that workers have enjoyed for decades? Employees love Arthur T. because they believe he puts them before shareholders. But now he has a third party to answer to — lenders to whom he owes at least $1 billion.
And thus the Market Basket model has been destroyed.
Looks to me like workers were damned if they did, damned if they did not.
“If it turns out he’s overpaid for the company, those chickens could come home to roost pretty quickly,” Lewin said.
I'm $ure they will.
Chris Pollara, founder of Boston digital marketing firm Convertiv, marveled at the way Market Basket workers used social media to rally people behind a cause as seemingly mundane as where to buy milk, bread, and eggs. His clients — never mind other activists — crave the sort of traction achieved by these tech novices.
But it’s not as simple as copying their techniques, which were not groundbreaking.
“This is why people get frustrated by social media,” Pollara said. “You can put money behind a campaign, but if people don’t connect with it, it doesn’t go anywhere.”
A sign of sock-puppet software for social media spy collection platforms that my agenda-pushing paper promotes.
Beyond the challenge of carrying Market Basket’s momentum, there is a basic question for those who would try: Are you willing to pay the price of success? Amid all the praise for Market Basket employees’ highly effective campaign, it’s important to recognize the cost and for others to weigh whether a similar battle would be worth fighting, said Maura Greene, a Boston employment attorney who followed the conflict closely.
Most people are not.
“If you’re a worker, you look at this and say, ‘Maybe we have more power than we realize,’ ” said Greene. “On the other hand, you see how the protest cost some Market Basket workers paychecks, so you have to use that power carefully.”
Something you don't have to worry about as much when you are government or corporations.
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"Market Basket employees begin rebuilding" by Casey Ross | Globe Staff August 28, 2014
Arthur T. Demoulas and thousands of exhilarated Market Basket employees streamed into warehouses, offices, and stores across New England Thursday to begin the task of rebuilding a company struggling with barren shelves, strained vendor relationships, and a mountain of new debt.
Demoulas will need to borrow at least $1 billion to buy Market Basket from his relatives, but company executives immediately sought to reassure customers that the supermarket chain’s cornerstone philosophy of low food prices would not change.
“I see that business model staying in place,” said David McLean, operations manager for Market Basket. “Arthur has always said, ‘Our job is to look out for the customers’ best interests, even when they’re not looking.’ ”
A supermarket industry analyst said that approach could be a challenge. “Being strapped with a lot of debt could make it tough to be the same old Market Basket, with good compensation and low prices,” David Livingston of DJL Research in Milwaukee said.
Artie S. won. Got a huge payoff and handed back a dying business.
Demoulas returned to work a day after a $1.64 billion agreement to purchase the Market Basket shares of rival family members, back in charge of the company whose board fired him in June and triggered an employee walkout that paralyzed the business.
“By working together — and only together — we will succeed,” Demoulas said during a brief speech at the company’s headquarters in Tewksbury.
Demoulas spoke to an enthusiastic gathering of hundreds of employees from a podium fixed on a pickup truck at about 8:30 a.m. Some employees in the crowd wore the kinds of T-shirts that became familiar at picket scenes over the past month, proclaiming “I support Artie T.” and “Market Basket Strong.”
Company employees faced an enormous challenge to restart the supermarket business after weeks of pickets and protests by sympathetic customers. McLean said he and other top managers were working to get stores fully restocked within seven days; Demoulas did not conduct interviews Thursday.
Vendors were being encouraged to ship directly to stores, to speed the resupply effort. Warehouses were prepared to operate around the clock to help process orders and deliver more food into stores. McLean said a premium was being placed on restocking empty produce shelves, meat racks, and seafood cases.
While many Market Basket employees returned full of adrenaline Thursday, they also faced plenty of problems that festered during their protest.
“We can’t log in to our computers,” said Kayla Trott, an employee in the company’s accounts payable department. For an hour after she arrived, Trott said, employees were sorting through paperwork — invoices, e-mail printouts, purchase orders — that was “scattered all over the office,” often on the wrong employees’ desks.
They left you a mess, huh?
Amid many displays of hard work and unity among returning workers, there were also moments of discord between employees who walked off the job in unity with Arthur T. and those who worked through the dispute.
“People do what they do for their own reasons,” said Ann Rogers, an employee in the accounts payable department. Still, she said, the employees who stayed on the job “weren’t a part of this whole process” to bring Arthur T. and other managers back to the company.
McLean said he and other top executives have urged employees to put down vengeful instincts and focus on the days of work ahead. “Emotions can get the better of people, and it’s hard to keep that in check,” he said. “People need to understand that we’re here for a purpose, and that’s to serve customers.”
Then the strike was a complete failure. It divided the workforce.
Related: For Market Basket workers, ‘it’s time’
The six-week standoff at Market Basket affected 25,000 employees who work for the company in Massachusetts, New Hampshire, and Maine. The potential effects of a protracted walkout — or the possibility of even more dire developments — led the governors of Massachusetts and New Hampshire to offer their assistance in resolving the dispute.
“There are [a] lot of people who work at Market Basket and who were at risk of losing their jobs because of the disruption in the company, and much of that disruption seemed avoidable and resolvable, and it was,” Governor Deval Patrick said in a conference call Thursday. “We got to a good place, and, more to the point, they got to a good place.”
Patrick said the dispute between the factions of the Demoulas family had been “more complicated than I anticipated.”
He almost invoked martial law.
The authority of Arthur T. Demoulas to run the business in the months between an agreement and a completed transaction — while two chief executives who had replaced him remained on the job — became a crucial issue to a settlement, Patrick said.
Now managers and other employees face many challenges to restarting Market Basket’s operations. Those efforts include repairing a broken distribution network, creating new vendor contracts, catching up on unpaid bills, and getting fresh produce, seafood, and meat into stores from suppliers across the country.
“It’s almost like opening a new store,” said Livingston, the industry analyst. “Now multiply that by 71.”
Fortunately for Market Basket, some alert contractors got a head start on their work.
Steve Theriault, owner of a Las Cruces, N.M., trucking company, left Dallas on Tuesday afternoon with 40,000 pounds of potatoes when a food broker tipped him that the company’s stalemate was ending. He and his son, Chris, took turns behind the wheel on the 1,790-mile journey to Andover, arriving at 7 a.m. Thursday.
“When my son brought in the paperwork, they were high-fiving him and cheering,” said Theriault, owner of Frenchville Connection Inc. “We were the first delivery.”
At Market Basket’s headquarters, McLean and other employees got to work at midnight Wednesday night, 45 minutes after the announcement of the sale and Arthur T.’s reinstatement. McLean said managers quickly began enacting store-restocking plans they had drafted in anticipation of a deal.
Andy Lien, a director of the perishable warehouse in Andover, called in about 30 employees to return to work early Thursday to count inventory, check dates on all of the products, and receive shipments from vendors. His entire crew of 110 workers planned to return Friday, beginning at 3 a.m. to load trucks.
Lien expects to send off between 80 and 90 full trucks throughout the day Friday. He said he is waiting to send trucks until he has enough food to fill them. The warehouse will remain open during the weekend as workers split 12-hour shifts until the stores are reasonably well-supplied.
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Maybe we could talk about it over a meal at Friendly's:
"Arthur T. Demoulas prevails, but with lessons to learn | August 29, 2014
Arthur T. Demoulas’s return to the helm of Market Basket is a victory for the family-owned grocery chain’s employees, who walked off the job after Arthur T.’s cousins ousted him in June
and refused to come back without him. It’s also a victory for a
farsighted business model, in which maximizing the immediate returns for
owners is a lesser goal than preserving a company’s long-term
sustainability.
Yet Arthur T.’s $1.5 billion buyout of the rival Arthur S. Demoulas
faction doesn’t mean that everything can go back to exactly the way it
was. The deal leaves the company with a loan obligation it previously
didn’t have, not to mention a $550 million investment from a private
equity firm that will want to see some payoff. Especially under these
new pressures, Arthur T. must preserve the values that made Market
Basket special. But if he hopes to prevent a repeat of this saga in the
future, he must also professionalize the governance of this all too
unusual chain.
During their remarkable six-week revolt, thousands of employees showed
that they understood the nature of the company’s business far better
than the group of heirs who had gained control of it.
Under Arthur T.’s stewardship, the company paid its shareholders
smaller dividends so that workers could receive better pay and consumers
could enjoy lower prices. That approach paid off in the form of high
sales volumes and low employee turnover. When the Arthur S. faction
pushed him out and seemed to lay the groundwork for a more traditional corporate culture, employees recognized the threat to the chain’s very essence and responded accordingly.
Yet the chain was subject to such an abrupt shift because it’s an
overgrown family business, with all the idiosyncrasies and baroque
grudges that often come with family businesses. Arthur T.’s much-vaunted personal touch with employees didn’t extend to the Arthur S. side of the family, whose members felt cut out of the company’s affairs. They wanted, out of pure self-interest, to extract greater payments from it, but they also had some legitimate questions. (Why, exactly, does a supermarket chain own a golf course?) Arthur T. dismissed such concerns, declaring that “there’s only one boss in this company.”
But it only took a change in one heir’s allegiance for Arthur T. to be
replaced with corporate executives from two major national retail
chains. Keeping Arthur T.’s allies and private equity investors together
over time will require, at the least, greater diplomacy.
With the support of employees, Arthur T. successfully maneuvered his
way back into control. But the victorious faction of the Demoulas family
must seek to cement its values into Market Basket’s long-term business
plan — and not simply rely on the personal appeal of Arthur T. to carry
this unique enterprise indefinitely into the future.
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Just crossed the Globe off my list.
Also see: Moving on Market Basket
I will be moving on more than that come the new month.
NEXT DAY UPDATE: Market Basket stores looking more flush
