Private-equity companies are under attack by union groups such as Services Employees International Union (SEIU) due to worries that the weakening economy will motivate private equity companies to encourage portfolio companies to cut jobs and benefits. The
Washington Post ran a great
piece outlining this.
Rather than strikes and marches, these protesters are using less-conventional tactics:
- Protesters presented a satire in front of Henry Kravis's Long Island home in which they asked passerbys to give the buyout master a cut on his property taxes.
- At a recent conference in NYC given by Carlyle co-founder, David M. Rubenstein, protesters sneaked in sporting a banner reading "Why does he pay taxes at a lower rate than the hotel's doorman?"
- In addition to shaming, the unions are also pointing to links between Middle Eastern oil money and private equity.
Buyout firms respond by highlighting to the fact they have been responsible managers of their portfolio companies in the past and that unions themselves have actually invested pension fund money in private equity firms. The goal of these unions is for private equity firms to take steps to ensure that employees in their portfolio firms are treated fairly with benefits and job security. Since the movement was initiated, any potential legislation for the benefit of the unions goals has been withdrawn.
The battle of the haves and the proles continues......
Jon Ogg is a producer and editor of the Special Situation newsletter and the "10 Stocks Under $10" weekly newsletter for 247Wallst.com.
