Tell Friendly's to stuff their Fribbles up Sun Capital's behind!Mae Pelissier is 82-years-old. For 28 years she worked for the Friendly Ice Cream Corporation in Northampton, MA, and dragged herself to the store at six a.m. to make sure it was ready for morning customers. Until this month she got a small benefits package for her labors: a pension of $72 a month, a $6,000 life insurance policy, and a little bit of supplemental health insurance. Now it’s gone, as is the fate of 6,000 other former employees.
Friendly’s went into Chapter 11 and didn’t make its way out. It sought a buyer and only one appeared. Its name alone tells you that it isn’t interested in making fribbles: Sun Capital Partners Inc. What companies like Sun do is buy troubled assets, put companies on a short leash, and if that doesn’t work, sell everything that isn’t nailed down, bring in the wreckers, and move the real estate. They pare to the bones costs associated with wages and benefits. One of the first things Sun did with Friendly’s was instruct it to tell its retirees that Sun would not assume the company’s pension plans. So forget the fribbles-–it’s time to shake down Mae Pelissier.
Back in the 19th century companies routinely stiffed workers of their wages, especially in the construction industry. A favored dodge was to defer wages on a construction site, and then declare bankruptcy as the project neared completion. A “new” firm suddenly appeared–often the old one with a new name and a new board of directors. This pseudo white knight bought the bankrupt project (at bargain basement prices), set up shop, and operated with money in its treasury that should have gone for wages. Workers fought like hell to get what were called “mechanics lien laws” passed to curtail this vicious practice. Now, when a firm goes belly up, paying back wages is part of the liquidation process (as any firm taking over the company understands).
Move the clock forward and we see a new dodge centered on pension plans. Spare me all claims that “times change.” Pensions are a classic quid pro quo; workers agree to scale back wage and immediate benefit demands in the name of deferring reward until a later time. It’s simply unconscionable that firms like Sun can cancel these plans so cavalierly. (This, by the way, is also the profile of many of the firms with which Mitt--I’m Way Above the 1%--Romney has been associated.) Let me be clear: no laws are being broken, but the morality of this is on par with selling heroin in the schoolyard.
The United States needs to extend mechanics lien laws to cover pensions. What kind of society or company can strip Mae Pelissier of such a piddling pension? Friendly’s, of course, washed it hands of this. It had no other buyer, it claims. Here’s my retort: If a firm such as Sun won’t honor pensions and no other buyer that will emerges, the government should seize the bankrupt firm, sell all its assets (including property) at a public auction, and all revenues should go into a state-run escrow account that maintains benefits. Continue paying these until the funds run out; if retirees run out before the funds do, government gets to keep them.
We can’t hold out breath waiting for the Millionaire Congress to pass such a law, but we can register our personal protest. Boycott Friendly’s. Do your part not to leave any bones for Sun Capital to pick.
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