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SEIU Targets Buyout Fund KKR for Global Action

Posted to the IUF website 02-Jul-2008

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Massive use of high-risk debt, aggressive restructuring, asset stripping, "quick flips" and the systematic exploitation of tax loopholes (many of which their lobbying efforts have inspired) - these are the tools behind the enormous profits raked in by private equity, or leveraged buyout funds. Workers, public revenue and the public interest generally are the big losers in these financial engineering operations. One of the oldest and biggest of the funds is the US-based KKR - Kohlberg, Kravis, Roberts & Company - the "barbarians at the gate" behind the USD 31 billion buyout of RJR Nabisco which effectively destroyed the company and led to the loss of an estimated 40,000 union jobs.

KKR did more and bigger deals than any of its competitors in 2007, and currently has earmarked some USD 20 billion for global acquisitions. Its vast and diversified portfolio of companies includes major manufacturing, media and service corporations around the world.

In a paper written for the ILO in 2006, the IUF drew attention to the growing significance of financial investors as transnational employers and the challenges this poses for traditional collective bargaining strategies:

If these private-equity funds were recognized as TNCs (given their extensive control over manufacturing and service companies globally) and included in UNCTADís top 100 non-financial TNCs, they would easily displace the top 10 corporations. Even UNCTADís new list of the top 50 financial TNCs (included for the first time in the World Investment Report 2004) only examines financial TNCs in terms of a narrowly defined financial service sector and limits employment data to that sector.This neglect of the role of investment trusts as employers is also evident in the ILOís World Employment Report series. The World Employment Report 2004-05 explores the impact on productivity of labour and capital mobility, and the relationship between employment stability and productivity, without taking into account the financial imperatives that drive this flexibility and the growing impossibility of employment stability in a financialized world.

KKR in 2008 owns 35 companies with a combined $95 billion in annual revenue and more than 500,000 employees worldwide. Considered as a global corporation, KKR would rank tenth in the global Fortune 500.

To highlight the destructive impact of private equity buyouts and the need for action to ensure respect for trade union rights and equitable tax treatment of private equity-owned companies, the IUF-affiliated SEIU has organized a global day of action on July 17 targeting KKR, including actions and demonstrations in cities around the world.

SEIU has prepared background material on KKR, sample leaflets, and a video. To learn more, and to see how your organization can participate, go to by http://www.july17action.org/

For more information on events in your city/country, contact [email protected]

To keep up with the latest news and analysis of the buyout business and related financial developments and their impact on workers and unions, sign up for automatic e-mail alerts from the IUF's Private Equity Buyout Watch!