How Foreign Investors Treat American Employees

Just as bad as American "job creators".

Joh. A. Benckiser SE (JAB) is a German holding company owned by 4 German billionaires—the heirs to a 189-year- old chemicals empire that their father helped transform into one of the largest consumer-goods companies in the world.

The owners of this holding company are the four adopted children of Albert Reimann—Renate Reimann-Haas, 60, Wolfgang Reimann, 59, Stefan Reimann-Andersen, 48, and Matthias Reimann-Andersen, 47. Each own a quarter of the closely held investment company (JAB). The family’s combined net worth is at least $20 billion, according to data compiled by Bloomberg.

The company is a part holder of the consumer products company Reckitt Benckiser. JAB also owns Coty, Inc., Peet's Coffee, and Caribou Coffee, and had agreed to acquire Douwe Egberts in 2013.

  • Reckitt Benckiser is an Anglo-Dutch multinational consumer goods company headquartered in Slough, Berkshire.
  • Caribou Coffee Company is a specialty coffee and espresso retailer, the second largest in the United States after Starbucks. Caribou sells coffee, tea, and bakery goods in 415 company-owned coffeehouses in 40 states and the District of Columbia, as well as 126 franchise locations worldwide.
  • Peet's Coffee & Tea also a coffee retailer and also operates shops all over the U.S. (see the store list)
  • Douwe Egberts is a Dutch corporation that processes and trades coffee, tea, and other groceries.
  • Coty, Inc. is a global beauty products manufacturer founded in Paris. The German billionaire-owners of JAB were behind Coty Inc.’s $10 billion bid for Avon Products Inc., the world’s largest direct seller of cosmetics.

On October 29, 2012, Peet's Coffee & Tea, Inc. was acquired by JAB for approximately $1 billion. BDT Capital Partners LLC (owned by the former Goldman Sachs banker Byron Trott) was a minority investor in this transaction.

Peet's Coffee and Tea

From Peet's Workers Group (Employees of Peet's Coffee & Tea, Inc.): After Peet's Coffee & Tea in Chicago fired a dedicated employee of 5-year tenure, and threatened to fire another, baffled Peet's customers came to us asking, what is going on? Why is Peet's getting rid of our favorite baristas?

We realized that it was time to explain, in detail, a system that has long been obvious to those on the inside. It's called the Disposable Employee Model (or D.E.M.). The D.E.M. is a strategic combination of policies that guarantees short-term employment among the bottom 80-90% of a company.

What companies use it? More each year, in particular: fast food companies, grocery stores, big box retailers, chain restaurants, and fast coffee.

What does the D.E.M. look like for a Peet's Coffee & Tea employee?

  • Different work schedule each week (days/hours generated by computer software)
  • Mixtures of shifts that start as early as 4:45 a.m. and end as late as 10:00 p.m.
  • Fluctuating pay: employee scheduled 10 hours one week, 30 hours the next
  • Wages just above legal minimum
  • Annual "raises" not even cost-of-living increases
  • Benefits essentially unattainable
  • Shift lengths around 4-5 hours (working 5 days/week = about 20 hours)
  • Over-hiring practices that create an artificial labor hour scarcity
  • Gratuitously harsh but selectively enforced policies that allow the company to quickly dispose of any employee who sticks around long enough to start complaining about any of the previous issues

Customers inevitably ask, why would an employer use such a terrible model? Because chaos, instability, stress, scarcity, and fear are important elements in preventing and combating resistance. Think for a moment about the psychological influence of the model:

  • Defining a job as part-time implies that it is "transitional": Employees aren't invested enough to protest, because they are constantly looking for a new job, which often comes in the form of a lateral move to a company with similar work conditions.
  • Defining a job as part-time implies that it is "supplemental income": Employees do not complain about poverty wages, because the conditioned public response is always, "You're not suppose to be able to LIVE on what you make there!"
  • Defining a job as part-time implies that it is not a "Real Job": Employees do not hold the job to "Real Job" legal standards, accepting injuries, sexual harassment, discrimination, and intimidation as simply par for the course.
  • No full-time option means an employee must get a 2nd job to survive: Employees are too exhausted juggling 2-3 jobs to come together to try to influence company policy.
  • Defining a job as part-time implies that it is "unskilled labor": Working in a society that values investment over labor, employees internalize rhetoric that demeans the value of their contribution to the company and shames them into silence about the abusiveness of their work conditions.
  • Harsh but selectively enforced rules keep employees in constant fear of losing their jobs: Employees know that raising any real questions with management about the dysfunction of the system is likely to make them targets for retaliation.

Wouldn't a business be better off investing in its employees instead of ruling them through fear? We believe so. Read this blog post about healthy business models used by profitable companies.

What do Peet's workers have to say?

"What’s the worst thing about the Disposable Employee Model? It teaches workers that they’re replaceable, and they know that if they speak up against their employer they will be gotten rid of and replaced by someone else. Will that new employee be better? Probably not. But it doesn’t matter." ~ Amanda D, disposed-of employee

"Our bosses have found a way to get by without explicitly intimidating their workers--as long as we believe that we are disposable and can be easily replaced, we will take it upon ourselves to be as agreeable as possible, and never even consider standing up for what's best for us." ~ Emma BB, disposed-of employee.

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Comments

disposable worker syndrome

I hate to tell you but the German's did not invent this piss poor treatment of employees, the American companies did.

They do it because they can. They could not do such piss poor treatment of workers in Germany due the nation's strong labor laws and unions.

Ain't America grand? So much freedom to labor arbitrage the U.S. worker.

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