{"id":986517,"date":"2023-02-08T15:39:56","date_gmt":"2023-02-08T15:39:56","guid":{"rendered":"https:\/\/jacobin.com\/2023\/02\/jersey-factory-workers-pensions-private-equity-kkr\/"},"modified":"2023-02-08T15:39:56","modified_gmt":"2023-02-08T15:39:56","slug":"at-a-new-jersey-factory-workers-are-up-against-a-pension-backed-private-equity-giant","status":"publish","type":"post","link":"https:\/\/radiofree.asia\/2023\/02\/08\/at-a-new-jersey-factory-workers-are-up-against-a-pension-backed-private-equity-giant\/","title":{"rendered":"At a New Jersey Factory, Workers Are Up Against a Pension-Backed Private Equity Giant"},"content":{"rendered":"\n \n\n\n\n

Workers at a soft drink maker owned by private equity megafirm KKR say the company is stalling in contract negotiations and denying workers more than six weekends off per year. Ironically, KKR\u2019s union busting is funded in part by union pension investments.<\/h3>\n\n\n
\n \n
\n Workers claim that under private equity megafirm KKR\u2019s control, soft drink bottler Refresco has been dragging its feet on negotiating a first contract with the union and pushing for draconian provisions. (James Marshall \/ Getty Images)\n <\/figcaption> \n<\/figure>\n\n\n\n\n \n

At the outset of the COVID-19 pandemic in 2020, Refresco \u2014 a transnational corporation that produces and bottles soft drinks for major brands such as Tropicana and Gatorade \u2014 had a single response to its staff about the public health crisis unfolding at its Wharton, New Jeresy, plant an hour outside of New York City: show up to work.<\/p>\n

According to the workers at the plant and their union, employees exposed to the virus were denied time off, the factory remained open despite a broader economic shutdown, on top of the twelve-hour shifts the company required. (Workers say the company used the pandemic to justify longer shifts, while Refresco claims the new policy went into place prior to the emergence of COVID-19). Outraged, the predominantly immigrant workforce formed a union, winning their first election in June 2021 in what was one of the largest blue-collar union victories during the pandemic.<\/p>\n

One year later, New York\u2013based private equity megafirm Kohlberg Kravis Roberts & Co, also known as KKR & Co, became a majority owner of the company. Now workers claim that under KKR\u2019s control, Refresco has been dragging its feet on negotiating a first contract with the union and pushing for draconian provisions such as only allowing workers to take weekends off once every eight weeks. KKR\u2019s business model, meanwhile, depends on the pension funds of unionized teachers, firefighters, social workers, and bus drivers.<\/p>\n

The plight of Refresco\u2019s nearly 250 workers exemplifies one of the biggest problems facing American labor today: union workers are, often unknowingly, funding the war on themselves by financing union-busting activities through their pension funds.<\/p>\n

Public pensions have nearly\u00a0$5 trillion<\/a>\u00a0in assets, with more than\u00a0$1.2 trillion<\/a>\u00a0of that in risky high-fee, low-transparency \u201calternative investments,\u201d like private equity, hedge funds, and private real estate.<\/p>\n

\u201cPension funds have repeatedly financed the interests of anti-union firms, even sometimes with the unknowing support of union trustees,\u201d said Jay Youngdahl, a pension lawyer and former fellow at the Safra Center for Ethics at Harvard, \u201cIt\u2019s time to put a stop to it. Refresco is just one of the latest examples, and certainly jarring due to KKR\u2019s attempts at \u2018ESG\u2019 rebranding.\u201d<\/p>\n

Indeed, KKR\u00a0states on its website<\/a>:<\/p>\n

We believe that thoughtful management of environmental, social and governance (ESG) issues is smart business and see it as an essential part of long-term success in a rapidly changing world. KKR is committed to investing responsibly by integrating material ESG considerations into our investment policy.<\/p><\/blockquote>\n

In April of last year, KKR helped launch and aggressively\u00a0marketed<\/a>\u00a0Ownership Works, an organization exploring shared ownership by employees. A few months later, KKR\u00a0launched<\/a>\u00a0two ESG funds to market to investors like pension funds. Contrasting these efforts with the company\u2019s resistance to a fair contract at Refresco, Anastasia Christman, a senior policy analyst at the National Employment Law Project, called KKR\u2019s approach a \u201cnod to worker democracy and giving workers democracy, while actually opposing worker democracy.\u201d<\/p>\n

In May, an inspection of Refresco by the federal Occupational Safety and Health Administration\u00a0led<\/a>\u00a0to nearly $50,000 in fines against the bottling company, with OSHA finding violations for noise and air quality issues.<\/p>\n\n \n\n \n \n \n

\u201cRespect, Dignity, and Equality in Working Conditions\u201d<\/h2>\n \n

For years, the top-down culture of overwork at Refresco\u2019s plant in Wharton, New Jersey, has led to injuries, said Carlos Morena, an Ecuadorian immigrant to the United States who has worked at Refresco for nine years. \u201cThey have shown repeatedly that they don\u2019t really care about the bodies and health of the workers,\u201d said Morena. \u201cThe accidents continue \u2014 we had a worker fall off a ladder just in the last few months.\u201d<\/p>\n

Such a culture was particularly evident in the early months of the pandemic in 2020, when workers became ill and found little respite from Refresco management.<\/p>\n

\u201cThere were many of our fellow workers who were sick with COVID at the beginning of the pandemic,\u201d said Morena. \u201cOne of us was in the hospital for two weeks.\u201d<\/p>\n

The connection between overwork and injury is strong. A 2018\u00a0literature review<\/a>\u00a0of occupational health studies concluded, \u201cWorkers working long hours had a higher chance of experiencing occupational health problems.\u201d<\/p>\n

At Refresco, the long hours can lead to swollen legs that have not been properly treated, according to union complaints filed with the Occupational Safety and Health Administration. Some Refresco workers frequently work as long as sixteen-hour shifts.<\/p>\n

In a statement provided to us, Refresco stated that it had \u201cexceeded government guidelines\u201d for COVID-19 risk management \u201cby providing our manufacturing employees with face masks in addition to other personal protection equipment before it became a recommendation or requirement,\u201d and that \u201cRefresco complies with all applicable labor laws.\u201d<\/p>\n

The conditions inspired workers to form a union.<\/p>\n

\u201cWe began to meet, and we realized that only with a union would we have more power against the bosses,\u201d said Morena. \u201cWe are workers who want respect, dignity, and equality in working conditions.\u201d<\/p>\n

Refresco employees chose to unionize in their first National Labor Relations Board (NLRB) election in June 2021. The following May, they won a second union election ordered by the NLRB after Refresco complained that the previous vote had started five minutes behind schedule due to an NLRB official being late.<\/p>\n

At the time of Refresco workers\u2019 push for unionization, the company\u00a0was<\/a>\u00a0owned<\/a> by a Paris-based private equity firm, PAI Partners, and the British Columbia public sector pension fund. But one month after the 2022 rerun election, KKR bought a majority stake in Refresco in a $7-billion deal.<\/p>\n

Now, a KKR fund \u2014 KKR Global Infrastructure Investors IV,\u00a0according<\/a>\u00a0to the Private Equity Stakeholder Project \u2014 owns Refresco.<\/p>\n\n \n \n \n

\u201cOne Consecutive Saturday and Sunday Off Every Eight Weeks\u201d<\/h2>\n \n

While bargaining continues between Refresco management and the small and militant United Electrical, Radio, and Machine Workers of America (UE) union, documents obtained by us reveal that KKR \u2014 in addition to generally slow-walking workers\u2019 path to a union contract \u2014 has refused to accede to any worker demands that would create greater consistency in employees\u2019 home life.<\/p>\n

KKR\u2019s current contract proposal guarantees workers just one day off every twelve days, even if they are working twelve-hour shifts. Moreover, KKR promises in the proposal to the union that \u201call regular full-time employees shall have at least one consecutive Saturday and Sunday off every eight (8) weeks.\u201d<\/p>\n

In other words, these workers \u2014 nearly all of whom make less than $20 an hour, with health insurance coverage that can cost more than $450 monthly \u2014 would have just six weekends per year.<\/p>\n

KKR founders and first cousins Henry Kravis and George Roberts are\u00a0each<\/a>\u00a0worth<\/a>\u00a0more than $9 billion, according to the Bloomberg Billionaires Index. KKR has $471 billion in assets under management, and controls a sprawling empire that includes companies as varied as Axel Springer, the Germany-based,\u00a0right-wing<\/a>\u00a0parent of\u00a0Politico<\/em>, and Brightspring, a\u00a0misconduct-riddled<\/a> group-home company for people with disabilities.<\/p>\n

KKR was made famous for their 1988 buyout of RJR Nabisco in 1989, which led to mass layoffs and significant press and governmental scrutiny, as well as an award-winning\u00a0film<\/a>.<\/p>\n

Unbeknownst to most, the KKR executives pushing back against Refresco employees owe part of their fortunes to the fees paid by the public pensions of unionized workers.<\/p>\n

Major investors in KKR Global Infrastructure Investors IV include the following major public pensions: the New York Common Retirement Fund ($500 million<\/a>\u00a0in investment commitments), the Alaska Permanent Fund ($250 million<\/a>), the New York City Employees Retirement System\u00a0($205 million)<\/a>, and the Minnesota State Board of Investment ($100 million<\/a>).<\/p>\n

KKR\u00a0pointed out<\/a>\u00a0in its most recent annual report that public pensions \u201chave historically been among the largest investors in alternative assets,\u201d such as private equity and hedge funds.<\/p>\n

KKR has long had a contentious relationship with organized labor \u2014 the secretary-treasurer of the AFL-CIO\u00a0excoriated<\/a>\u00a0the firm before Congress in 1989 for laying off\u00a0thousands<\/a>\u00a0of workers as part of its\u00a0controversial<\/a>\u00a0buyout of RJR Nabisco \u2014 and private equity as a whole has often\u00a0opposed<\/a>\u00a0unionization efforts and backed\u00a0anti-worker<\/a> candidates for elected office. But these facts<\/a>\u00a0are not common knowledge, even among the many union trustees that populate the pension funds\u2019 boards.<\/p>\n

Refresco workers have made efforts to leverage the public pension connection to KKR to help transform the working conditions at the New Jersey plant. Factory employees have\u00a0met<\/a> with the staff of New York City comptroller Brad Lander, who sits on the boards of the New York City retirement systems, and spoken with representatives of other pension funds invested in Refresco to let them know about the working conditions in the factory.<\/p>\n

A key target for workers is Democratic New York comptroller Tom DiNapoli. New York is nearly unique in that it gives this single elected official exclusive control over the $233-billion<\/a>\u00a0Common Retirement Fund, which combined has more than\u00a0$2 billion<\/a>\u00a0invested in various KKR funds.<\/p>\n

Ron Kim, a member of the New York State Assembly as well as a participant in the Common Retirement Fund, said that DiNapoli has \u201ctremendous\u201d leverage over KKR, which is frequently raising new investments from pension funds. Using his powers, DiNapoli could choose to deny KKR additional new funds or audit the KKR funds in which the pension is currently invested.<\/p>\n

\u201cLimited partners like the New York Common have tremendous power as general partners like KKR are seeking pension money,\u201d said Kim, who has\u00a0championed<\/a>\u00a0legislative efforts to expose the secretive underbelly of alternative investments like private equity and hedge funds. \u201cThis is New York, there are hundreds of billions of dollars of public employee retirement money. There\u2019s so much leverage. Why are we putting our public retiree money to fuel worker exploitation?\u201d<\/p>\n

DiNapoli did not respond to a request for comment, nor did KKR.<\/p>\n\n \n \n \n\n \n \n

You can subscribe to David Sirota\u2019s investigative journalism project, the\u00a0Lever<\/i>,\u00a0here<\/a>.<\/p>\n\n\n\n

This post was originally published on Jacobin<\/a>. <\/p>","protected":false},"excerpt":{"rendered":"

At the outset of the COVID-19 pandemic in 2020, Refresco \u2014 a transnational corporation that produces and bottles soft drinks for major brands such as Tropicana and Gatorade \u2014 had a single response to its staff about the public health crisis unfolding at its Wharton, New Jeresy, plant an hour outside of New York City: [\u2026]<\/p>\n","protected":false},"author":138,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"_links":{"self":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/986517"}],"collection":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/users\/138"}],"replies":[{"embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/comments?post=986517"}],"version-history":[{"count":1,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/986517\/revisions"}],"predecessor-version":[{"id":986519,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/986517\/revisions\/986519"}],"wp:attachment":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/media?parent=986517"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/categories?post=986517"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/tags?post=986517"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}