Friday, June 10, 2011

WSM To Borrow More Money -- Really ... ?!?

I have decided to set out in full my post on OrangePolitics in response to the latest WSM Board missive. Why? Because our Board Chair takes it upon himself, in that missive, in advance of worker discussions on Employee Action Plans, to tell the world that we workers are 98% happy with everything to do with WSM.

I was really, really, really hoping that the WSM corporate office had not asked that question in the WSM Employee Survey so that they could then dishonestly use the answer to pretend to the world that all was well with the lot of workers in WSM. The WSM corporate office have proven, once again, that they are creative only to the extent of dreaming up new levels to which to sink.

My post:

The Board of WSM are inviting feedback from owners on the WSM financial results for 2011, the financial priorities for 2012, and the manner in which the patronage dividend will (may?) be apportioned.

The Board Chair's report on the state of WSM's finances for FY 2011 is a re-hash of all that has been covered in the previous comments in this thread. He claims WSM has returned to financial health. I truly wish that were true.

The fact is, however, that our profit is lower than last year, and has been achieved by making exploitative demands of already hurting workers.

Frankly, the most galling reference by the Board Chair is to an unrepresentative answer in the recent Employee Survey. That reference suggests that the employees of your community co-op are totally happy with their lot.

The Board Chair (himself a worker-owner, who works in the WSM corporate office) is fully aware that the results of that Survey were a resounding vote of no confidence in the leadership of our co-op.

For sure, we said we like working at WSM. Of course we do. Otherwise we wouldn’t be here. More to the point. We ARE here precisely because we do believe in the principles of co-operation.

The Board Chair fails to reference the pages and pages and pages of very specific, detailed and comprehensive commentary, offered by a statistically significant proportion of the workforce, which commentary states quite baldly that we workers are hugely disappointed that our leadership has simply set aside any pretence of being a co-op, and of complying with the co-op’s Mission Statement that demands that employees enjoy a fulfilling work experience.

We love working in our co-op. But we are very unhappy with the co-op’s leadership.

The Board Chair knows that, and dishonestly chooses to mislead consumer-owners into thinking we workers are happy with everything.

The fact is that the recent Employee Survey reported that workers feel overworked, overstressed, underpaid, understaffed, under-equipped and unhappy with the lack of communication from the WSM corporate office, and dissatisfied with the lack of inclusion in decision-making in a co-op they are told they half-own.

But the package of information that the Board has released gets worse.

You see, we employees are currently engaged in a process of abbreviated discussion about addressing the grievances we raised in response to the Employee Survey.

That discussion is supposed to lead to a specific round of discussions on Employee Action Plans to address worker grievances.

Indeed, I was approached by the corporate office, and specifically asked not to write publicly about that process while it was underway.

The ostensible reason given was to encourage discussion, without employees feeling their remarks might be published. So, I agreed.

We can now see that the real reason was to allow the WSM corporate office dishonestly to pretend to the outside world that all was well with our community co-op’s workforce.

The point is that those grievances will require funds to address. We workers rightfully feel that, having made huge sacrifices over the past few years, in order to bring our co-op back to some sort of health, it was time finally to address our work conditions, to bring them back to what they were – or better, as a sort of reward.

After all, we make the money that keeps the co-op afloat. Why should we not share in the product of our efforts?

Yet, before our discussions on Employee Action Plans are even begun, let alone concluded, we are told in the current Board missive that the Board and WSM corporate office have dreamed up a whole new 10-year Capital Plan, and it is THAT Capital Plan which will receive priority in funding.


We workers were denied a dividend for three years. We were denied pay raises for two years. We have received paltry pay raises since then. All to help the co-op stave off bankruptcy.

We have agreed to work longer hours. We agreed to bust butt this past year to try to increase sales by 15%. We are over-worked, over-stressed and under-compensated. We work harder now than we did several years ago, for less. All to help pay off a debt of $8 million, which was borrowed without the approval of owners or workers, to fund the last disastrous capital expansion plan.

We have not yet paid off that debt. No doubt further exploitative demands will be made of us next year, since we did not achieve the 15% goal this year. Our own grievances and demand for better conditions are being shunted to one side.

And all the while, the Board and WSM corporate office, in secret, are devising yet more capital plans? Which will require more borrowing? Which we workers will have to repay by working even harder?

Again. Enough.

My fellow workers and I will be doing what we can in our meetings to try to stop this nonsense. But we can not do it on our own. We need the support of consumer-owners when they provide the feedback the Board is currently requesting.

But before we get to that suggested feedback, you may well be asking yourselves, how did all this happen without our knowing? Well, I could say because you good folks weren't paying attention. But that wouldn’t strictly speaking be fair.

You see. The Board decided last year not to hold an Annual Meeting. But how, you might further ask, could they do that without a change in the By-Laws? Because the Board has given to itself the sole power to change the By-Laws, without a vote of owners. And how did this happen? Er, cf. paying attention ...

Ok, so there is this Capital Plan. Which was developed undemocratically. How bad can it be? I don't know. The Board aren’t publishing it as part of their feedback exercise. They want you to agree to it blind.

Hmm. But what is all this I say about new borrowing? Well, that’s where the Board’s plans for the patronage dividend come in.

Consumer-owners will receive 20% of the dividend apportioned to them. The remaining 80% will be put into a capital fund (consumer-owners will never see it again). And we are told the capital fund will be used to make capital improvements.

Well, you say, that makes sense. Well, it would, if it were true, and if the capital projects were being approved by the workers and consumers in our worker-consumer co-op.

But the Capital Plan of projects has already been agreed, without our approval, and again, it is not being published.

But worse. The fund money itself will not be used to finance the capital projects. Oh no. The fund will simply be used as collateral to BORROW more money (perhaps three or five times the amount of the fund). Each year.

And we workers will once again be the ones having to shoulder the sole burden of paying off the debt and the interest. Which we are doing at the moment, to the tune of $2 million a year, on the still existing $8 million debt.

Yes. You're reading that right. Even after the debacle of the store expansion in 2007/2008, which nearly bankrupted our co-op. When we still have $8 million of debt to erase. When the only plan so to do is to make the overworked workers work ever harder. Yes. We are planning to fund yet more unknown capital spending with new borrowing.

But how, once more you ask, how could the Board possibly get the authority to borrow more money? We, the owners, would stop them. Think again. The Board changed the By-Laws to give them sole and absolute authority to borrow whatever capital monies they need.

All of this has been going on and continues because you good folks do not put down your foot. What can you do? Put down your foot. And save our co-op. Provide feedback to the Board.

Oh. And in case you were thinking that there might be meetings, at which you would be able to hold the co-op leadership publicly accountable, think again. There will be tables. Where you can have a chat with one or two folks. Away from the glare of any transparency or openness.

I would respectfully suggest that you might want to consider the following as a response to the Board missive:

1) Shop more at WSM. And take more of an active role in the co-op. So that plans like this are not just dumped on you.

2) Take part in the current feedback exercise. Write to: Please don't let important decisions about our community co-op be taken by a self-selected few just because you allow them to do so by default.

3) Ask that that the first financial priority for 2012 be a sustainable profit, and an immediate plan to eliminate the existing $8 million debt – a plan that does not impose further burden on your long-suffering workforce.

4) Ask that the second financial priority be an improvement in the condition of workers to be agreed with the workers.

5) Ask that the third financial priority be that no Capital Plan be implemented until it has been agreed by workers and consumers, and simply refuse to allow 80% of your patronage dividend to be retained until such consent has been given.

6) Ask that the fourth financial priority be an absolute moratorium on any and all spending on or borrowing for the Capital Plan until such time as the current debt has been eliminated in full; consultation has concluded on the Capital Plan; and the grievances of the workforce have been addressed.

I too believe that our community can only benefit by having a thriving, sustainable co-op. I too believe that it requires a sound capital base. But I also believe that our community worker-consumer co-op can only thrive when it has a happy workforce, and a consumer base that is respected and included in important decision-making.

We are a co-op for a reason. And that is because we expect more of ourselves than to be thinking merely of making money. We are supposed also to be thinking of the social impact of our business on our owners, consumer and our workers. That is why we pride ourselves on having a triple bottom line: social and environmental, as well as financial.

It is time to take as much care of the social and environmental bottom lines as we do the financial. Either we have the funds to do so, or our Board should not be sending out missives saying we have returned to financial health.

Please provide the Board with your feedback. And when you think of borrowing, please be thinking only of 'borrowing' my suggested financial priorities for FY 2012 … !!