In its ongoing investigative series “Bottom Line Nation,” The New York Times explores the impact of “private equity firms, once known as corporate raiders, [who] are now huge, influential and everywhere in everyday American life.” In our area, no one is learning more about the impact of private equity than grocery workers.
After one giant, out-of-state private equity firm threw Safeway and Albertsons stores into a chaotic merger and another bankrupted Bellingham’s beloved Haggen chain (after getting millions for the land under the stores), Puget Sound grocery workers thought it might be safe to go to work. But now a third private equity shark is circling.
The Oregon private equity outfit Endeavour Capital has a stake in the Seattle-based Metropolitan Markets grocery chain, which is locally managed. Met Market’s employees are union members, with good pension plans and health benefits. But alongside Metropolitan Market, Endeavour owns New Seasons Market, an anti-union, Portland-based grocery chain with a terrible workplace safety record. Endeavour’s money-men sit on the boards of each chain, which was fine as long as the two stores were not competitors, but now New Seasons is surging into Seattle, competing for customers and new store sites such as the Capitol Hill light rail station.
This move pits Endeavour’s new, non-union grocery store against its own union grocery stores servicing the same market.
Endeavour Capital’s decision to back the entry of a new chain into the Seattle-area looks a lot like plain old union-busting. It is a classic, old-school tactic for private equity owners to expand a non-union subsidiary into territory served by its own unionized subsidiary in order to lay the basis for eliminating the union-represented operations, with their good health and retirement benefits.
Longtime Metropolitan Market cheese monger Ames Reinhold is nervous: “I need my health benefits and my pension. When I see my store’s big-money owners backing a non-union competitor, it makes me very worried.”
If Endeavour wants to grow its stake in Seattle grocery stores, Reinhold thinks it should back the union alternative.
Endeavour’s investment in the health field raises even darker possibilities. Endeavour also owns Zoom+, a “doc-in-a-box” chain of health clinics in Portland and Seattle, currently morphing into a health insurance company. Some have called Zoom+ “fast-food-style” health care.
A wide coalition of retirement activists and health-care advocates have staged a series of rallies in front of Seattle and Portland Zoom+ clinics protesting the for-profit chain’s refusal to accept patients covered by Medicare, Medicaid or Tricare. The rallies have grown as more groups realize that Zoom+’s cherry-picking of young and healthy patients burdens providers who believe that health care is a human right. As Country Doctor co-founder Linda McVeigh writes: “We know that when Zoom+ and other health care profiteers turn away older, poorer and sicker patients we will see those patients in our waiting rooms, increasing our need for support from increasingly stretched governmental and philanthropic sources.”
Last year, New Seasons grocery stores became Zoom+’s first client for employer-based health insurance coverage. Is Endeavour backing the New Seasons Market over Metropolitan Market in order to give Zoom+ more customers? It certainly appears so, with Endeavour senior manager (and bigtime Republican donor) Stephen Babson sitting on the boards of all three companies. Not so coincidentally, Zoom+ already has clinics in several of the Seattle neighborhoods where New Seasons proposes to build stores, such as Capitol Hill and Ballard. Like New Seasons, Zoom+ aims to grow fast, at the expense of health care providers that take the high road.
The New York Times observes: “Unlike other for-profit companies, which often have years of experience making a product or offering a service, private equity is primarily skilled in making money.”
Are playing one subsidiary off against another, union-busting and blocking health-care access for elders, poor people and veterans just moneymaking strategies for Endeavour Capital, Zoom+ and New Seasons Market? Maybe, but we can call them on it.
Send an e-mail to Endeavour’s Stephen Babson [email protected].