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(Daily Kos)   Seventy-year-old grocer retires after 46 years in the business. Does he sell his stores to the highest bidder? Nope, he's transferring ownership to nearly 400 employees via stock purchase   (dailykos.com) divider line 72
    More: Hero, highest bidder, Siegels, front end, Star Tribune, Jeff Lueken  
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2983 clicks; posted to Business » on 25 Nov 2012 at 11:23 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-11-25 08:28:01 PM
This is what we need more of in our society.
 
2012-11-25 08:37:29 PM
Nice.
 
2012-11-25 08:53:47 PM
This is the second owner whom I've heard of doing this lately. Bob's Red Mill was the other one. Awesome!
 
2012-11-25 09:05:47 PM
Why does he hate America?
 
2012-11-25 09:26:24 PM

GreenAdder: Why does he hate America?


he clearly hates conservatives and the gop
hasnt he heard of vulture capitalism ???
 
2012-11-25 09:27:26 PM
Socialist. Value to society is always valued in $$$$. It's how we keep score. This guy fails as an American.
 
2012-11-25 09:42:31 PM

Three Crooked Squirrels: Socialist. Value to society is always valued in $$$$. It's how we keep score. This guy fails as an American.


kinda wins as a human though...
 
2012-11-25 10:07:10 PM
Split evenly? Management team staying in place? It's nice and all, but this could end badly.
 
2012-11-25 10:11:16 PM

Darth_Lukecash: This is what we need more of in our society.


Thank you for this post, and that other thing! I had trouble emailing you for some reason.

And thank you, subby, for posting an article that actually improved my mood! I'm not strictly anti-capital; I'm strictly anti-greed when it's unnecessary. We all have to be somewhat greedy in order to house, clothe, and feed ourselves, but there is a point where that greed crosses over into douchezilla territory. That is a nebulous point for sure - and I'm not here to put a number on it. But c'mon man, treating your workers like sh*t just to eek out a little more certainly qualifies that person as a jerk.
 
2012-11-25 10:14:53 PM
Business schools across the country are burning this guy in effigy.
 
2012-11-25 10:43:03 PM
So basically this is only good for the employees if they decide to sell their share of the stores to the highest bidder?
 
2012-11-25 11:05:03 PM

serial_crusher: So basically this is only good for the employees if they decide to sell their share of the stores to the highest bidder?


encrypted-tbn2.gstatic.com

...of course, Debbie was usually right, but close enough
 
2012-11-25 11:05:10 PM

serial_crusher: So basically this is only good for the employees if they decide to sell their share of the stores to the highest bidder?


As I understand it, the only way to cash out is to leave and sell your shares to the remaining employees, who are obliged to buy them.
 
2012-11-25 11:12:24 PM

serial_crusher: So basically this is only good for the employees if they decide to sell their share of the stores to the highest bidder?


If only shares allowed people to make some money in some way, or something.
 
2012-11-25 11:36:59 PM

serial_crusher: So basically this is only good for the employees if they decide to sell their share of the stores to the highest bidder?


i0.kym-cdn.com

F*cking dividends. How do they work? 
 
2012-11-25 11:38:56 PM
What is he doing? True Capitalist Job Creators need to keep their servants employees in their place with low wages while reaping in the profits/cashing out to Bain Capital or other similar firms to allow them to milk the business for all its worth. It is utterly socialist to be believe that bettering your lessers is good for the economy. Isn't it common knowledge that the only net gain for the economy in the USA is in the purchase of luxury goods like yachts, private aircraft and expensive jewelry made in foreign countries?
 
2012-11-25 11:47:32 PM
I wish the new owners good luck. I suspect in a year or three the stores go bankrupt due to the collective management though.
 
2012-11-25 11:49:30 PM
The sooner we pull our heads out of this morass the better. I'm sick of the Repubs fellating the Rich and screwing over the rest. Thank God Romney lost.
 
2012-11-25 11:50:38 PM
Sweet!
 
2012-11-25 11:55:29 PM

dickfreckle: Darth_Lukecash: This is what we need more of in our society.

Thank you for this post, and that other thing! I had trouble emailing you for some reason.

And thank you, subby, for posting an article that actually improved my mood! I'm not strictly anti-capital; I'm strictly anti-greed when it's unnecessary. We all have to be somewhat greedy in order to house, clothe, and feed ourselves, but there is a point where that greed crosses over into douchezilla territory. That is a nebulous point for sure - and I'm not here to put a number on it. But c'mon man, treating your workers like sh*t just to eek out a little more certainly qualifies that person as a jerk.


Welcome. Too bad the owner of a local grocery store chain I worked at back in the early '90s didn't do the same thing.
 
2012-11-25 11:57:46 PM

puffy999: serial_crusher: So basically this is only good for the employees if they decide to sell their share of the stores to the highest bidder?

If only shares allowed people to make some money in some way, or something.


Yeah, but with a bunch of high school dropouts running the show, how long do you think that company will be profitable?
 
2012-11-26 12:01:10 AM
maybe lueken's will sell liquor now.
 
2012-11-26 12:01:41 AM

Mr. Eugenides: I wish the new owners good luck. I suspect in a year or three the stores go bankrupt due to the collective management though.


Um, yup.
 
2012-11-26 12:05:51 AM

serial_crusher: Yeah, but with a bunch of high school dropouts running the show, how long do you think that company will be profitable?


Grocery store margins are razor thin too.

At least as an employee you're guaranteed a profit.

Bemidgi is a small town though (big enough for a large customer pool - small enough to keep the big boys out) and this guy probably was the main player there, so I'd imagine his profits were fairly respectable.
 
2012-11-26 12:13:50 AM
There are many successful co-op and/or employee-owned businesses, some of them grocery stores.

I'm sure it's not easy, but it is demonstrably capable of being done well.
 
2012-11-26 12:18:45 AM

Sherman Potter: Mr. Eugenides: I wish the new owners good luck. I suspect in a year or three the stores go bankrupt due to the collective management though.

Um, yup.


"Does Employee Ownership Enhance Firm Survival?" (PDF)

Short answer: yes, dramatically.

If you think that daily management and corporate strategy will be turned over to stock clerks, you are a fool.
 
2012-11-26 12:26:25 AM

TomD9938: serial_crusher: Yeah, but with a bunch of high school dropouts running the show, how long do you think that company will be profitable?

Grocery store margins are razor thin too.

At least as an employee you're guaranteed a profit.

Bemidgi is a small town though (big enough for a large customer pool - small enough to keep the big boys out) and this guy probably was the main player there, so I'd imagine his profits were fairly respectable.


America's 100 Largest Majority Employee-Owned Companies

Five of the top 10 are supermarket chains.
 
2012-11-26 12:37:19 AM
The nice people that read for the audio version of the Economist pronounce it "Bem-gee", and the cake eater suburb of Minneapolis as "Edd-in-ah".

/csb
//Yes, I listen to the Economist during my commute...
 
2012-11-26 12:38:23 AM

hubiestubert: F*cking dividends. How do they work?


Its a grocery store. Not exactly the highest return rate.

/if structured correctly - this will survive just fine
 
2012-11-26 12:47:17 AM

BarkingUnicorn: Five of the top 10 are supermarket chains.


Fantastic.
 
2012-11-26 01:43:33 AM

TomD9938: serial_crusher: Yeah, but with a bunch of high school dropouts running the show, how long do you think that company will be profitable?

Grocery store margins are razor thin too.

At least as an employee you're guaranteed a profit.

Bemidgi is a small town though (big enough for a large customer pool - small enough to keep the big boys out) and this guy probably was the main player there, so I'd imagine his profits were fairly respectable.


Yeah about that...

WinCo Foods pulls close to 10% profit. Albertsons aka SuperValu barely eeks out 2-3%. Why? WinCo is employee owned. It works. They're also anti-union so they have that going for them.
 
2012-11-26 01:55:22 AM

Smeggy Smurf: TomD9938: serial_crusher: Yeah, but with a bunch of high school dropouts running the show, how long do you think that company will be profitable?

Grocery store margins are razor thin too.

At least as an employee you're guaranteed a profit.

Bemidgi is a small town though (big enough for a large customer pool - small enough to keep the big boys out) and this guy probably was the main player there, so I'd imagine his profits were fairly respectable.

Yeah about that...

WinCo Foods pulls close to 10% profit. Albertsons aka SuperValu barely eeks out 2-3%. Why? WinCo is employee owned. It works. They're also anti-union so they have that going for them.


Why would you need a union in an employee owned company? The labor is the management there.
 
2012-11-26 02:18:38 AM

DarkLancelot: Smeggy Smurf: TomD9938: serial_crusher: Yeah, but with a bunch of high school dropouts running the show, how long do you think that company will be profitable?

Grocery store margins are razor thin too.

At least as an employee you're guaranteed a profit.

Bemidgi is a small town though (big enough for a large customer pool - small enough to keep the big boys out) and this guy probably was the main player there, so I'd imagine his profits were fairly respectable.

Yeah about that...

WinCo Foods pulls close to 10% profit. Albertsons aka SuperValu barely eeks out 2-3%. Why? WinCo is employee owned. It works. They're also anti-union so they have that going for them.

Why would you need a union in an employee owned company? The labor is the management there.


The labor is the ownership, not the management. Employees have little to no decision making about what goes on there. At best if they stick around for their 20ish years then they get a chunk of money when they leave. It's little more then a dressed up retirement plan that relies on the company staying in business.
 
2012-11-26 02:32:53 AM

dickfreckle: Darth_Lukecash: This is what we need more of in our society.

Thank you for this post, and that other thing! I had trouble emailing you for some reason.

And thank you, subby, for posting an article that actually improved my mood! I'm not strictly anti-capital; I'm strictly anti-greed when it's unnecessary. We all have to be somewhat greedy in order to house, clothe, and feed ourselves, but there is a point where that greed crosses over into douchezilla territory. That is a nebulous point for sure - and I'm not here to put a number on it. But c'mon man, treating your workers like sh*t just to eek out a little more certainly qualifies that person as a jerk.


No problem. I like reasonable voices, no matter what part of the country they come from ;-)
 
2012-11-26 03:50:03 AM

Mr. Eugenides: I wish the new owners good luck. I suspect in a year or three the stores go bankrupt due to the collective management though.


And the new owners will find their shares valueless.
 
2012-11-26 04:11:34 AM

Darth_Lukecash: No problem. I like reasonable voices, no matter what part of the country they come from ;-)


"Reasonable?" lol

Then again this is Fark, so maybe I am, like when a fat person looks great standing to an even fatter person.
 
2012-11-26 04:12:47 AM
Sigh, yes, I accidentally the thing. Common this time of night.
 
2012-11-26 06:52:19 AM

serial_crusher: Yeah, but with a bunch of high school dropouts running the show, how long do you think that company will be profitable?



Most grocery stores kinda run themselves. They have ~5 managers who are full-time employees of the store, + a general manager, a bookkeeper and a receiver. Sure, a Super Stop & Shop out here might have 25-40 more employees part time or so, but in general, the store runs itself.
 
2012-11-26 06:58:01 AM

Darth_Lukecash: This is what we need more of in our society.


communism?
 
2012-11-26 07:16:10 AM
My FIL sold his company to a few of his employees. Worked out well enough for everyone and he now works for them part time working with customers rather than running the business.
 
2012-11-26 07:16:17 AM
Sounds like a good town to put in a Neighborhood Market or two.
 
2012-11-26 07:26:22 AM

Sherman Potter: Mr. Eugenides: I wish the new owners good luck. I suspect in a year or three the stores go bankrupt due to the collective management though.

Um, yup.


You do realize that ownership != management, right?
 
2012-11-26 08:13:03 AM
cache.reelz.com

Lueken's employees will get shares at no cost to them based on length of service and salary. When someone leaves or retires, the current employees are obligated to repurchases his or her shares. The shares' value will grow with the company.

"Look, you'll move from stock boy to manager to sole owner in no time. There can only be one!"
 
2012-11-26 08:32:29 AM
How does that obligation for the other employees to purchase your shares play out? Does that include new employees, or is it only people who are employees today?
If half of the company walks out tomorrow, does the other half have to somehow pony up 50% of the value of the company to cash them out? That would probably make a sizable dent in your check to check lifestyle.
 
2012-11-26 08:46:08 AM
This is a very nice thing to do, and kudos to him for that.

That does not mean we should make everyone do it.
 
2012-11-26 09:08:09 AM
one of the fundamental components of distributism and solidarity.
 
2012-11-26 09:21:59 AM
Owner still makes a nice profit. The Owner still gets paid his ridiculous sum by the company which purchases the stock for the employees. Then after a few years, the ESOP program turns around and sells the business to the higher bidder anyway thereby paying back the company for the money paid to original owner and giving some to the employees. Do not be fooled: the owner still got his. He just lets the employees have it a couple of years to get a little themselves before doing what he would have done in the first place: selling to the highest bidder. (Wife's company went through this and watched it firsthand.)

- Appreciated the profits we got, though.
-- Very kind boss who cared for his employees.
 
2012-11-26 10:22:13 AM
It figures that this happened in Minnesota. I've lived in 15 different states throughout the US, and although I was born and raised nowhere near Minnesota, it is the state I enjoyed the most. Not because of the scenery, pretty though it is, it's still too flat for my tastes. Not because of the weather, although I like a challenge. No, it's the people. They flat out do not have a chip on their shoulder. They're warm, welcoming and intelligent.

I lived there for eight years, and made dozens of friends. I had to move to Arizona to take care of my mother, and in the five years I've lived here, I've made one friend, and he was so racist I dropped him. I live in a town that has NO blacks, but they cause ALL the problems here. Go figure. I know that there are good people in Arizona, but I have yet to meet any (except on FARK).

Thank you Minnesota. Y'all are unpretentious, and would never claim to be the best state in the Union, but you're pretty darned good.
 
2012-11-26 10:48:36 AM

serial_crusher: So basically this is only good for the employees if they decide to sell their share of the stores to the highest bidder?


I take it you've never owned voting shares of stock. That's where the true value is for the employees.
 
2012-11-26 10:56:54 AM

AdolfClamwacker:


The labor is the ownership, not the management. Employees have little to no decision making about what goes on there. At best if they stick around for their 20ish years then they get a chunk of money when they leave. It's little more then a dressed up retirement plan that relies on the company staying in business.


It can be set up that way. But in the UK's largest retail chain, employees control one-third of the board's seats. Link 

"John Lewis Partnership owns the biggest department store chain in England, the Waitrose supermarket chain, and other brands. With $13.7 billion in 2011 revenues and 81,000 employees, it would rank in the Fortune 200. With revenues up about 7.4 percent annually over the past decade, it grew faster than Macy's. It stayed profitable throughout the Great Recession. Perhaps most importantly, and unlike many big retailers, it succeeds while providing fair compensation (including pensions) and giving employees control over the business."
 
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