Hoffa Sends Warning About 'Fast-Buck Artists' That Hurt Workers, Companies

WASHINGTON, July 4 /PRNewswire-USNewswire/ -- Teamsters General President Jim Hoffa today sent an urgent warning to workers and their unions at French frozen-food manufacturer Picard Surgeles about a potential takeover by private equity firm Clayton, Dubilier & Rice (CD&R).

(Logo: http://photos.prnewswire.com/prnh/20100127/IBTLOGO )

(Logo: http://www.newscom.com/cgi-bin/prnh/20100127/IBTLOGO )

CD&R, a leading U.S. private equity firm, is currently considering a bid for Picard Surgeles, a market-leading retailer and manufacturer of frozen food in France. Several other companies have also expressed interest in purchasing Picard Surgeles from its current owner, London-based BC Partners. Three unions currently represent workers of Picard Surgeles in France: CGT, CFDT and FO.

In a letter addressed to heads of CGT, CFDT and FO, Hoffa discussed the disturbing aftermath of CD&R-led takeovers of two Teamster-represented companies, Hertz and U.S. Foodservice. CD&R's participation in a group of private equity firms that purchased Hertz, a car rental company, in 2006 was labeled the work of "fast-buck artists" by BusinessWeek after the firms used Hertz assets to pay themselves a $1 billion special dividend and eliminated 1,500 jobs. Regarding U.S. Foodservice, Hoffa said that the takeover has led to "facility closures, layoffs and loss of market share."

"CD&R is now leading U.S. Foodservice down a contentious and destructive path," Hoffa said in the letter. "Under CD&R leadership, U.S. Foodservice continues to disregard the rights of its employees, undermining long-term growth through continued mismanagement, assets sales and cost-cutting.

"I sincerely hope that your unions can avoid a similar leveraged buyout by any firm interested more in extracting and turning deals than continuing to build upon the strong legacy of Picard Surgeles. In our experience, a CD&R takeover can truly hurt workers, their families and entire communities."

U.S. Foodservice is the nation's second-largest foodservice distributor with 25,000 employees and annual revenues of $20 billion. CD&R, along with Kohlberg, Kravis and Roberts (KKR), purchased the company using $2.1 billion in equity, and $5 billion of debt taken from U.S. Foodservice's own assets. In the years following the buyout, USF has closed nine distribution centers and shed more than 3,000 jobs. Labor relations soured leading to numerous violations of U.S. labor law, including almost 200 violations of federal labor law in the State of Arizona.

Hoffa offered to work with CGT, CFDT and FO to avoid any leveraged buy out for Picard Surgeles.

Founded in 1903, the International Brotherhood of Teamsters represents more than 1.4 million hardworking men and women in the United States, Canada and Puerto Rico.

SOURCE International Brotherhood of Teamsters