Not the Original Recipe - Bronx Battle Pits Private-Equity Firm, Stella D'Oro Union

The New York Post, 5/10/09

STRIKING workers at the Stella D'oro Biscuit Company in the Bronx claim the private equity owners of the well-known baker are interested in nothing but fat returns on their investment and are slowly squeezing the life out of the city jewel by having inexperienced replacement workers produce poor quality cookies as they pursue their profits.

"One of the number one products," Eddie Marrero, a longtime foreman said recently about the Swiss Fudge cookies, "It either has no fudge, fudge covering the cookie, cookies stuck together with the fudge, cookies all out of shape."

In an interview with WNYC radio, Marrero and other workers said they cry when they see the products in the store.

Despite the passion - for 10 months the hearty group of 135 bakers, through freezing rain, snow and more recently, 90-degree heat, haven't let the picket line have a single day off - the striking union workers at the 79-year-old Big Apple institution have produced mixed results in their battle against Brynwood Partners, the private-equity firm which bought the firm three years ago.

Their attempt to wring compassion from shoppers by explaining Brynwood's attempt to squeeze more than 30 percent cuts in pay and benefits from them, has largely fallen on deaf ears.

According to the union, Brynwood's contract offer included a $1 an hour wage cut per year for five years, the loss of five vacation days and 12 sick days. Workers had earned about $17 an hour.

On Tuesday, the union will finally get a hearing on its complaint filed with the National Labor Relations Board. But even if it wins its case, the union workers will get little more than their jobs back. No back pay will be coming.

And they will still have to hammer out a new contract.

The NLRB complaint charges Stella D'oro only with failing to open its books once contract talks bogged down.

While Brynwood has been able to keep the cookies coming, dealing with a strike for 10 months, the upcoming NLRB hearing and the bad publicity surrounding its sour labor issue was certainly not what Hendrik Hartong, Brynwood's senior managing partner, had in mind in 2006 when his company bought Stella D'oro from Kraft Foods.

Brynwood, which Hartong started in 1984, has invested $450 million over the past 25 years buying and selling more than a dozen small companies, including DeMet's Candy; Genie, the garage-door opener company; Utrecht, the art-supply retail chain; and, Richelieu foods, the private-label frozen-food and packaging concern.

Brynwood has returned 28.8 percent annually to its investors, according to its Web site. This has led some union members to think Brynwood is putting profits before people.

When it bought Stella D'oro, the brand was withering on the vine at Kraft Foods. Sales has tumbled from $65 million in 1992 to $30 million. The small brand was suffering from neglect among Kraft's giant brands.

Hartong smelled opportunity.

His first contract offer to workers, members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Local 50, included the steep cuts to wages and benefits. Management claimed it needed the cuts to save the company from bankruptcy.

The union members voted to strike, and Hartong hired replacement workers. After 10 months, little has changed.

The union has been paying members $100 a week from their strike fund. Some strikers have worked at the plant for more than 20 years and have taken out home-equity loans to survive.

Mike Filippou, a union leader and mechanic, says the replacement workers don't make it any easier for them as some "young punks," after getting paid, wave their checks at them from their cars as they drive away.

For Filippou and other longtime Stella D'oro workers, working at the plant and making the cookies and breadsticks has changed since 1992, when the founding family sold the company to Nabisco.

Joseph and Angela Kresevich, expert bakers, started the company in 1930. It has remained in the borough ever since. In fact, it might have remained under family control but, according to reports at the time, a child of one of the Kresevich's kids running the company was killed in the 1989 San Francisco earthquake.

That death apparently changed the outlook of the family. Three years later the company was sold.

Brynwood, in an attempt to avoid the hearing - and maybe put an end to the negative media attention it is getting - reached out recently to Mayor Michael Bloomberg to mediate the strike.

Bloomberg, according to a union member, had a Columbia University professor preside over a meeting between the union and management last month. The meeting was held in hopes of forging an agreement and ending the strike.

Hartong, who was at the meeting, told the union representatives that if he gave them what they wanted he would have to shut down the business.

"There was no real negotiation. They didn't want to back off," Filippou said.

Hartong, reached last week on his cell phone, declined comment.