BRATTLEBORO — What sadness, anger, and shame I felt when I read about the demise of the Vermont Bread Co. and its parent company, Koffee Kup Bakery, in Burlington.
The company, in business since 1978, was based here, with beloved breads and English muffins sold up and down New England and the middle-Atlantic states.
And now it's gone. And so is the tax revenue. And so are the jobs of 247 Vermonters - 91 of them here in our town.
As I read on, and discovered the business had been bought by an investment firm, I did not add “surprise” to my list of emotions.
We've seen it all before, countless times. A longstanding business is sold, then sold again, to a series of “investment firms,” or “private equity firms” (or, if we strip away the euphemisms and name them accurately: “robber barons,” “parasites,” “vultures”).
We read all about how a once-thriving business, with scores of employees, was described as “underperforming,” and that “creditors are breathing down the company's neck.”
Here's how this process goes, in a nutshell: Corporations buy up businesses. They cut costs by “restructuring” (also known as “firing workers” or “reducing their hours and benefits”) but they expect the same performance from this skeleton crew. They sell off bits of the company's assets and submerge it in debt. Then, when this strip mining collapses the business, they shut it down and sell off the bones.
Meanwhile, it's an incredibly lucrative and poorly regulated business model, and the CEOs of these rackets are billionaires.
Blackstone Group, one of the largest of these private equity corporations, has a chief executive who made out like a bandit this past year. While you were furloughed and worried about your unemployment checks arriving before your past-due notices, he brought home $610.5 million - a raise of 20 percent from 2019.
Oh, and your pension probably funds all this - that's where the “equity” comes from.
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But back to Vermont Bread.
What can be done to save businesses from being sucked dry by corporations that know nothing about the goods and services the business offers?
(For example, Vermont Bread's executioner, American Industrial Acquisition Corporation, says on its website that its target sectors are “aerospace, defense, automotive/truck/rail, power generation, packaging materials, pharmaceuticals, medical devices, infrastructure, mining, distribution, automation, food and beverage.” Pardon me for thinking they slapped on “food and beverage” as an afterthought.)
One solution that seems to work well is the worker cooperative.
Picture a democratic workplace - and by that, I mean direct democracy, where every single worker in the company has an equal vote, from the person who keeps the bathrooms clean to the company's president.
In this workplace, everyone has the right and the opportunity to participate, see the finances, and make decisions on hiring and firing and everything else that goes into running that particular company. The people who know the company best - because they spend the majority of their waking hours there - determine the direction in which the business will go.
In these companies we see greater productivity and less waste, because the workers directly experience the relationship between how hard they work with how well the business is doing. And their paychecks reflect this effort.
We see those workers staying at their jobs, thus reducing the costs of having to frequently train new staff. If you had a say, wouldn't you stay?
We see less of a glaring chasm between the lowest-paid worker and the highest-paid worker, which remedies inequality.
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I'm not entertaining a utopian fantasy here. Worker co-ops exist all over the world.
Virginie Pérotin, professor of economics at Leeds University Business School (U.K.), recently issued a report, “What Do We Really Know About Workers' Cooperatives?” In it, Pérotin researched and analyzed two decades' worth of data on worker-owned cooperative businesses in Europe, the United States, and Latin America, and compared them with businesses structured differently.
Her findings: Worker co-ops are larger, more stable, more productive, more efficient, more profitable, and more fair in their wage distribution.
If you would like to read it, you can access it at bit.ly/612-coops. It's just over 20 pages long, and it is an accessible, engaging read.
Or, if you'd rather eat than read, you can simply pay a visit to King Arthur, the flour and baking company in Norwich. This thriving Vermont business, with the flour that most serious bakers insist on, is fully worker-owned and has been since 2004.
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While you ponder the things you love to bake (or that someone you love bakes for you), here's something else to think about: Where was the Brattleboro Development Credit Corporation in all of this? Didn't they know the company was in trouble?
The now-shuttered Vermont Bread Co. is on the BDCC's property.
Could the BDCC have saved them? In all fairness, I don't know. Perhaps they tried their best. I would love to read their response - and I hope they would tell us in plain English, not the jargon and foggy PR/corporate/bureaucratic-speak that the BDCC specializes in.
But here's what I do know: on the entire BDCC website, the only mention I could find of worker cooperatives is an expired link to a seminar, “Leveraging Employee Ownership as a Business Recovery Strategy,” presented by a co-director of the Vermont Employee Ownership Center.
That's nice. One single half-hour seminar nobody can access.
Here's my challenge to the BDCC and the entire community: Do what you can to support worker-owned co-operatives in a real and substantial way. It's a proven method for preserving jobs, decreasing inequity, and restoring dignity to workers and their families.
Don't let the next Vermont Bread crumble.