Nov 27, 2006
Solo Cup workers in the Plate Department at its Owings Mills, Maryland factory just heard from their manager about an article in Forbes magazine. He wrote, “... the article does not paint a pretty picture of Solo Cup company’s current financial position.... If we all want a secure place to work in the future, then every employee needs to do their part by producing a product as efficiently as possible with as little waste as possible.”
He then points out that this one department spends $481,920 per year on paper and is less efficient than a plant in another city doing the same work. In other words, the boss is threatening the workers that if they do not become more “efficient,” their jobs will go to another factory.
Forbes, a business magazine, just reported that Solo Cup company is in trouble. Its credit rating was lowered; it took a 300-million-dollar write off, causing it to show a loss; a dozen accounting errors have been found; and debt has reached more than a BILLION dollars.
Solo Cup is the largest provider of paper products in the country. In 2004, it was second in size, behind Sweetheart Cup. Solo bought the larger company.
How could the smaller company buy the larger company? It took on an investment partner and got banks to give it 650 million dollars in loans.
Sweetheart, at the time of the merger, also had more than 400 million dollars in debt, coming from its long history of buying and merging. For example, in 1989 Sweetheart Holdings bought the former Maryland Cup Company using 300 million dollars in loans; in 1993 another management group bought the company using another 300 million dollars obtained by selling bonds.
The result of all this borrowing is a billion-dollar debt and interest payments in the past year alone of 72 million dollars to the banks.
Part of the wealth produced by the workers’ labor goes to pay off these debts. It also goes to pay the multi-million-dollar fees of bankers, lawyers and accountants.
In addition, the family that owned Solo, the Hulsemans, have paid themselves many millions more. The company was run by two Hulsemans earning more than a million dollars a year each, plus a number of sons and daughters and cousins who also got hundreds of thousands of dollars every year in “consulting fees.” One Hulseman paid a small fortune in 1971 so his wife could appear in a TV special.
Every bit of the money used for such extravagance comes from what the work force does. Yet the management tells the workers there is no money for wage increases; they have wiped out guaranteed pensions; they charge each worker more for health care and retirees get nothing for health insurance.
What lying, threatening nonsense management spouts at workers! Workers are not the ones who ran up billions in debt. We should not have to give up one concession, not one single penny, to pay for their ridiculous deals.
Let the people who benefitted from these loans pay them off!