Forgive my cynicism. But Save Mart betrayal bodes ill for Foster Farms workers
In this space in late March, I urged the new private equity owner of Save Mart Supermarkets to live up to its promise of continuing the legacy of Modesto goodwill nurtured for decades by the Piccinini family, the company’s former owners.
Less than a month later, Save Mart’s most loyal worker bees — retirees — were notified that their supplemental health benefits were being canceled. Talk about having a rug pulled out from under you.
So Foster Farms, which recently announced a similar ownership change, shouldn’t be surprised if some of us aren’t jumping up and down at promises made by a holding company to keep the poultry giant’s good thing going.
We hope the promises are true. But we’ve been down this family-sells-out-to-conglomerate path already this year, and weren’t thrilled with the outcome.
The similarities are not lost on us.
- Both companies were started by local families committed to high quality and to community.
- Both invested in Modesto. Bob Piccinini, who died in 2015, sponsored the now-defunct Modesto Relays, a world-class track meet, and once owned the Modesto A’s, a forerunner of the Modesto Nuts. The Fosters put $3 million into the Gallo Arts Center in Modesto, helped build Livingston’s Max Foster Sports Complex and gave generously to local food banks.
- Both ended long runs of family ownership in the first half of 2022 — Piccinini’s successors, after 70 years, and the Fosters, after 83. Both sold to investors making big promises to keep a good corporate neighbor attitude.
“It’s still a family of stores,” Save Mart’s new executive chairman said in late March, when Los Angeles-based Kingswood Capital Management took over. “Maybe it’s not family-owned, but it’s still a family of stores. and our 14,000 associates are part of that family.”
The new Foster Farms CEO said, “In this new era, we will maintain and further that (Foster family) legacy.”
Here’s hoping.
But not necessarily believing. Once bitten, you know.
Kathy Baker, who had worked 40 years for Save Mart, told Bee reporter Marijke Rowland this about losing the benefit: “Bob (Piccinini) was very good to us. In turn, we were extremely good to him. So that this would happen to us now makes me very sad and upset. This was something that was guaranteed to us.”
Mark Johnson, another Save Mart retiree, said, “You think they’re going to take care of you, but they don’t. It’s really kind of devastating for me.”
A few days ago, The Bee’s John Holland did a good job relaying comforting words from Atlas Holdings, which assured Foster Farms workers they would keep their jobs. Well, yeah — that’s the absolute minimum we expected. New partners said, “We have a long history of partnering with proud family-owned companies to honor their past.”
But nightmare stories abound from such takeovers. Private equity companies, holding companies and hedge funds are not known for loyalty or compassion toward employees or customers. Quite the opposite, in fact.
The Fosters did not allow distractions to detract from their focus. Atlas, based in Connecticut, owns 24 companies in 300 locations around the world producing metals, wood, packaging, car parts, power generation, construction services and supply chain management, and only one other food producer. It’s not even close to the same thing.
Squeezing the rank and file
We’re not worried about company executives, who tend to land on their feet. We’re concerned for line workers and others in Foster Farms factories in Stanislaus, Merced and Fresno counties.
We’re worried because new bosses of old companies are all about increasing profits, which usually means squeezing somewhere. Lower-level employees and retirees are the obvious target, as Save Mart’s new owners wasted no time proving.
The Piccininis may never have monkeyed with benefits of retirees who helped build the family business with their sweat, tears and careers. The Los Angeles private equity firm taking over was bound by no such sentimentality. To boost your own profit, it’s infinitely easier to hurt someone you don’t know.
So yes, there is room to be concerned for 12,000 Foster Farms workers, some of whom have given their adult working lives to build a family-owned company that no longer is.
