Tue Jan 8, 2013, 11:37 PM
Jeff In Milwaukee (13,992 posts)
Crying Over Spilled Milk
Back in 1930, a group of Wisconsin dairy farmers a created cooperative milk processing company called Golden Guernsey. Under local management and control, the dairy went from 85 customers to nearly 20,000 home delivery customers in the next five years. The company survived the great depression and over the decades became a fixture in southeastern Wisconsin. Most kids in the area grew up drinking half-pints of Golden Guernsey milk with their lunch at school. In the 1950's, Golden Guernsey built the milk processing facility on Delafield Street in Waukesha that was still processing milk until a few days ago.
What happened? OpenGate Capital happened.
You see, a few years back, the dairy was purchased by Dean Foods (an even larger milk processor in Wisconsin) but an anti-trust ruling held that since owning Golden Guernsey would give Dean Foods sixty percent of milk production in Wisconsin, they had to sell the business. To OpenGate Capital. Less than eighteen months ago. Workers showed up at the facility on Saturday, only to find that they had been locked out, and OpenGate Capital released an announcement today that the dairy was filing for bankruptcy.
Bear in mind, the business was solvent when it was sold to Dean Foods three years ago (the coop was getting out of the fluid milk business to concentrate on butter and cheese) and it was solvent when Dean later sold it to OpenGate. Long story short, these geniuses couldn't figure out how to MAKE A PROFIT SELLING MILK IN WISCONSIN.
One hundred employees are out of work, and schools across southeast Wisconsin are wondering where they're going to get milk for their lunches -- many were going to run out tomorrow. Of course, because OpenGate Capital is privately held, we'll probably never know how much of the company's equity was sucked out during this transaction.
But here's a funny little thing to consider. Since the dairy is in bankruptcy, Dean Foods can legally purchase the facility out of receivership. And on the OpenGate Capital website, the company lists Dean Foods as one of its "transaction partners." So the question in my mind is, did Dean Foods and OpenGate Capital have an agreement that since Dean Foods couldn't buy the company outright, OpenGate would buy the company, pillage whatever equity remained, and then drive it into bankruptcy so Dean Foods could buy Golden Guernsey at fire sale prices?
That's the sort of question the state's Attorney General ought to be asking, but since the Attorney General is J. B. Van Hollen and is in the pocket of corporate interests, that's just not going to happen. Now now. Not ever.
Score another one for the 1%
5 replies, 906 views
Crying Over Spilled Milk (Original post)
|Jeff In Milwaukee||Jan 2013||OP|
|Ed Suspicious||Jan 2013||#1|
|Jeff In Milwaukee||Jan 2013||#3|
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Response to Jeff In Milwaukee (Original post)
Tue Jan 8, 2013, 11:45 PM
JDPriestly (45,863 posts)
2. Interesting. This summary raises lots of good questions about what happened and why.
I wish all those unemployed and underemployed due to this grossly bad management all the best.
Maybe some sort of cooperative might be an answer. I don't know.
Response to JDPriestly (Reply #2)
Wed Jan 9, 2013, 12:04 AM
Jeff In Milwaukee (13,992 posts)
3. What we need...
Is a fund, either government money or private money (pssst, Warren Buffett, I'm looking at you), that would assist workers in these situations to create coops to buy their former plants and factories. If run on a cooperative basis, which out the exorbitant executive salaries, I'm positive that these companies could be profitable.