Friday, June 11, 2010

Sale of the Corner Building...**SIGH**

There is no-one who wants Weaver Street Market Co-operative to overcome its financial problems and succeed more than me. But we do our co-op and ourselves no favors by burying our heads in the sand, and then pretending that this represents “returning the co-op to a sustainable financial position.” []

It is not negative or pessimistic to warn of false dawns, and to propose alternative remedies as a realistic path to financial security []. Indeed, the truly ‘negative’ reaction is the one where we quietly accept the nonsense we are fed, thus allowing our treasured co-op to sink further into the mire.

Do we attack every newspaper report that relays to us the gathering horror in the Gulf of Mexico? Of course we don’t. We use it to inform our debate and the action we take to advocate for the best possible solution to the tragedy that engulfs our southern coast.

Almost every single worker with The Weave joined the co-op intending for it to be more than just a job. That was the whole point. So we are, all of us, already geared to going that extra mile to ensure that we succeed. We are a ready and willing target for the odd hardship, here and there, if it helps to save what for us is not just a paycheck – but a way of life.

But what truly pisses us off is when our corporate office and our Board present the latest stop-gap measure (this time the sale of the infamous Corner Building) as a brave new dawn. Only then to slam us with yet more intrusive and ill-thought-out productivity demands or senseless cost-savings – most of which serve only to make our workplace more difficult, more dangerous and less fulfilling.

We all now know what is the root problem with our straitened circumstances, and what needs to be done to bring real resolution to the situation. []

We over-expanded right at the beginning of the severest recession in a century. We over-borrowed, to the tune of $10 million (on an annual turnover of $25 million), and we are now saddled with scrambling to find $1 million a year in annual bank interest charges.

Every single demand that is made of us workers to increase sales, or cut staff, or do with less, or work harder comes down to that one primary imperative, forced upon us by a corporate office and Board of Directors who refuse to face reality – the overwhelming need to find $1 million a year to stop the banks taking over. []

Anyone who has to balance a check book or an online bank statement knows what needs to be done. It is not to keep on devising new short-cuts, new stop-gaps, and new half-measures.

We all know that the real long-term solution is to get rid of that annual $1 million bank interest charge. And that means getting rid of the $10 million in debt. And that requires completely re-structuring that debt and the expanded co-op, in a way that saves as many of the benefits of expansion as possible – but gets rid of the annual $1 million bank interest demand.

I called for just such a co-op wide review at the Annual Meeting in 2008. The attending owners backed that call. The Board ignored the suggestion at its following Board meeting.

Why are the Board, the corporate office and the General Manager so reluctant to face financial reality and reduce the enormous stress on the workers? Because they are viscerally unwilling to admit that expansion, in the form that it took, was a mistake. They refuse to change direction, regardless of the benefits, because it might show them to be less than perfect. That’s it. No more than that.

It has nothing to do with achieving some unseen goal, just around the corner. It has precious little to do with securing a bright financial future. And it has zero to do with saving our co-op. It is all about a small group of people saving their face.

And so we scramble. We sweat. We hurt. We curse. We cry. To find $1 million a year. To make a few on the Board and in the corporate office feel good about themselves.

What does this mean on the macro level?

In 2008, we made an operating loss of about $400,000 – which the corporate office and Board claimed, dishonestly, was a once-off payment for extra personnel in building the Food House. In fact, it was occasioned by the fact that the FH budget was allowed to run over drastically, the borrowing ran out, and management simply dipped into our dividend to make up the difference. And then lied about it.

But this was not enough. Already we were faced with the consequences of our huge borrowing, and, unknown to any of us until the Co-operative Grocer revealed it earlier this year, our General Manager secretly arranged with the National Co-operative Grocers’ Association to borrow $1.3 million to bail out our co-op, and avoid bankruptcy.

In 2009, in order to find the money to pay the $1 million in bank interest, we took away all of the consumer-owner discounts. This was another of the many false dawns much trumpeted by the corporate office.

Yet, clearly it did not work, since we are now told we had to go out later that same year (2009), and borrow yet more hundreds of thousands of dollars in short-term loans, just to pay off that year’s $1 million bank interest charge.

Which brings us to this year (2010). I know I’m not the only worker scratching his (or her) head and wondering why our General Manager used as his rationale for extending opening hours the argument that we needed this measure to help us to break even. Um. We thought this was the argument used when taking away the consumer-owner discounts last year? [Confused yet?]

Many of us warned at the time that such a short-sighted proposal might actually lose us more sales than gain us savings from not having to pay those discounts. Is this, in fact, what happened? Did taking away the discounts actually lose us money?

Well. We don’t know. We’ll never know. Because the General Manager and the corporate office refuse to meet us face-to-face to explain, and to allow us to question them. Instead, we are limited to receiving the occasional Reader’s Digest version of the financial rationale for the decisions being made.

So. Workers accept the additional burden placed on us by extending the opening hours. Regardless of the fact that it is obvious to all that the measure was hastily put together. There was virtually no marketing for customers. And no planning worth squat for workers.

And now we are told that the infamous Corner Building has been sold. And that the combination of these two wise and forward-looking maneuvers represents a well-considered plan helping “in returning the co-op to a sustainable financial position.”

“Our financial situation continues to improve,” says our General Manager in the press release to be found on our web-site and on the front page of the employee Market Messenger.

Sigh, and double sigh.

Let’s go through the truly offending paragraph, sentence by sentence:
Weaver Street decided it could better serve the community by focusing its resources on its core business of selling local and organic food. The co-op has returned to break-even after a difficult financial year in 2009. “Our financial situation continues to improve,” said Slater, “and selling the property is another step in returning the co-op to a sustainable financial position. It allows us to pay back money we had to borrow last year when things were rocky.”

The corporate office did not sell the Corner Building as part of a sensible, long-term strategic plan to re-focus anything.

It sold the Corner Building as a desperate measure, to pay off the hundreds of thousands of dollars' worth of short-term loans themselves taken out in desperation in 2009, to pay off the bank interest charge of $1 million due for 2009 on the totality of our long-term loans (still $10 million).

And let me just repeat that. Not one penny of the proceeds from the sale of the Corner Building is being used to pay off the long-term debt of $10 million, or even to help fund this year’s bank interest charge of $1 million.

It is just being used to pay off the loans taken out last year to pay off last year’s $1 million bank interest charge.

Yup. You got it. We are borrowing money to pay off the interest on our borrowing. We are getting absolutely nowhere. (“It allows us to pay back money we had to borrow last year when things were rocky.”)

We are busting gut every single day just to stay in place, just to save face. We are not improving anything. We are not moving forward at all. And certainly not towards any sort of financial sustainability that I recognize.

That sort of financial sustainability will only be achieved by living within our means. And that will only be achieved when we restructure our expanded co-op, and get rid of our long-term debt of $10 million.

And don’t think for one moment that I see the toxic consequences of that debt just in terms of macro-paperwork. I work on a Hot Bar, too. I know that every single time I work an extra hour at night, or double up doing someone else’s job, or work with an oven that’s still broke – I know that all of this is because we still have to find $1 million a year in bank interest, because our corporate office does not want to lose face.

We all of us want to do the very best we can at our jobs. The very best that we can for our co-op and for our customers. But we can’t when we are denied the proper tools. And it is counter-productive to say nothing when the only reason we do not have the proper tools is that we’re having to find $1 million a year in bank interest to save the face of our Board of Directors and our corporate office.

Case in point. Two days ago, the 5.00pm truck arrived with a huge pallet of soda drink – for one driver to unload. Over a metal flap that caused the heavy pallet to have to drop five inches before riding onto the unloading dock.

This load should have been spread safely over a couple of pallets. It should have required more than one person in the truck to unload. The link to the unloading dock should have been safer.

All of these suggestions are true. But none of them could apply. Because we need to save every penny we can, in order to pay that $1 million in bank interest.

I used to be a lawyer (in a previous incarnation!). I pointed out that we should not unload the pallet, since electing to engage in a maneuver that was obviously unsafe (and illegal) would deny the opportunity for any injured worker to claim personal injury.

The guys looked at me, blinked and sweat their way through the unloading anyway. Why? Because we have now created an atmosphere in our co-op where you do not question, you do not query and you sure as crap do not advocate. Trust me. I know all about the latter.

This is an appalling state of affairs in what still claims to be a workers’ co-operative. It is in breach of co-operative policy and values. And it is illegal.

It is not negative or pessimistic to point this out. It is why we are a co-operative. It is why we joined a co-operative. So that we could be part of a business paradigm that is not the traditional, capitalist sweatshop.

I, for one, will never render that ambition secondary to the illicit demands of a corporate office that has forgotten who we truly are. And I will certainly never put my health in jeopardy for a corporate office that sits in plush offices behind a combination lock.

Moving right along. What of this claim that the “co-op has returned to break-even after a difficult financial year in 2009”? Sigh, and triple sigh.

Do the corporate office and our General Manager really think that we have forgotten that this was precisely what we were told in 2008 and 2009, as well as now?

And what exactly does the phrase mean? Are we already breaking even? In which case, why do we need the extended hours? Is this to find the $1 million in annual bank interest? If so, why are we not honestly being told that?

If we are not yet breaking even, is this comment based upon the premise that the extended hours will allow us to break even? Is this another infamous corporate office prediction? Will we simply be facing more intrusive demands next year? Demands where we are not properly informed of the rationale and where we have no participation in the decision-making process?

Sigh, and quadruple sigh.

If you think I overstate the case, consider this. We have just introduced an extension of hours, in a totally ill-considered fashion. We have engaged in a panic sale of a prime piece of real estate, against the prevailing trend in property prices. And one of the two co-founders of our co-op just left for greener pastures, in circumstances which one corporate office staffer described as “bizarre.’

Does this strike you as a happy skip down the Yellow Brick Road towards the Emerald City of a “sustainable, financial” future? Or does it strike you as a series of alarm sirens, screaming out for a change in direction, and possibly personnel?

Enough. Enough of burying our heads in the sand. Enough dissembling. Enough of making decisions without our input – as is our right under co-operative policy. Enough of imposing ridiculous demands upon us, that do nothing to save the co-op, and serve only to save face. Enough of avoiding the truth. Of avoiding reality. And of avoiding us.

It is time we were told all of the facts. It is time we were properly involved in the decision-making process. It is time we were treated as partners, not ciphers. It is time to face financial reality, and get rid of our $10 million in debt. It is time for a full meeting of our co-op’s employees, so that we can question our corporate office. And it is time for a Board of Directors who do their job, and bloody monitor our corporate office, rather than merely patting them on the back, and eating the pizza they serve up – at our expense. []

I want my co-op to succeed. It will only succeed when its No. 1 value is honesty. And its No. 2 value is respecting those who insist on No. 1…