American Capital isn’t so sweet towards workers’ rights

I love labor candy heartAmong the American Rights at Work staff, I am notorious for my sweet tooth. I can plow through a movie-sized box of Mike & Ikes in a matter of minutes. When someone brings cupcakes to the office, I’m the first in line with a napkin…even if it’s 8:30 in the morning. I actually need to budget how many 99 cent bags of CVS jelly beans I can buy per week.

But when I learned about the sticky situation at the New England Confectionery Company (NECCO), the makers of tasty sweets such as Clark Bars and Valentine’s Day candy hearts, I lost my appetite.

American Capital, the company that purchased NECCO in 2007, has invested only $100,000 in equity in NECCO Holdings. In the meantime, its investment strategy of leveraged buyouts has burdened the company with close to $10 million in debt.

If all this technical jargon is as confusing to you as it is to me, feel free to read up on leveraged buyouts here.

Members of the Bakery, Confectionery, Tobacco Workers and Grain Millers union (BCTGM) are understandably concerned. They believe that a debt level that high threatens NECCO’s financial stability and long-term viability, putting hundreds of jobs on the line.

Yesterday, members of the union rallied outside of the American Capital shareholder meeting to protest the company’s investment strategy. Inside, BCTGM Secretary-Treasurer David Durkee delivered a letter from AFL-CIO President Richard Trumka. In the letter, President Trumka asked American Capital Chairman Malon Wilkus to find a way to invest in the company’s businesses that will not gamble with good union jobs.

I strongly urge you to develop a new approach to financing American Capital’s portfolio companies that will strengthen, not weaken our country’s economy. Highly leveraged capital structures that strain companies financially are especially counterproductive in these uncertain economic times.

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This entry was posted on Thursday, September 16th, 2010 at 1:38 pm and is filed under General, Jobs. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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