Report: Private equity greed threatens Safeway workers’ retirement
Cerberus Capital Management, the private equity firm that owns Albertsons-Safeway, is trying to make workers in the Washington, D.C. and Baltimore areas pay the price for their high, unsustainable debt load and corporate greed, according to a new report by the Private Equity Stakeholder Project and UFCW Local 400. In its current bargaining with members of United Food & Commercial Workers (UFCW) Locals 400 and 27, Cerberus is refusing to honor Safeway’s previous commitment to secure pension benefits.
... Among the report’s findings:
- Albertsons-Safeway has paid Cerberus and other owners almost $350 million in fees and dividends between 2013 and the end of 2018.
- In June 2017, Albertsons-Safeway paid out a $250 million dividend to Cerberus and other owners, financing the dividend in part by selling the real estate under its stores to a third party and then leasing it back.
- During this same period, Cerberus was charging “advisory” and “transactions” fees to Albertsons-Safeway, which cost the company at least $95 million for the period of 2013 to 2018.
... “If Cerberus can find a way to pay dividends to its shareholders and make Albertsons-Safeway come up with exorbitant management fees, it surely possesses the resources to keep the company’s promises to current and future retirees,” [UFCW Local 400 President Mark P.] Federici said. “It’s not a matter of money — it’s a matter of priorities, values and morals.”... The role of private equity in undermining the living standards and destroying the financial security of workers all across the country has come under growing scrutiny from lawmakers, the media, and the public.