I’ve been pretty productive this week, by my recent, diminished standards, so I’m going to leave you with one link, of a piece with the other stuff from this week. It’s about what happened to a town I drove through approximately a million times on my way to and from college — Lancaster, Ohio.
Private equity ruined its major employer, Anchor Hocking:
There were other glass companies in Lancaster, drawn there by cheap natural gas. But following a 1937 merger with the New York-based Anchor Cap and Closure, The Hockin’, now Anchor Hocking, grew into the world’s largest manufacturer of glass tableware and the second-largest maker of glass containers such as beer bottles and peanut-butter jars. It even played a role in the invention of late-night TV, in 1950, by sponsoring the pioneering NBC show Broadway Open House. Anchor Hocking became Lancaster’s largest employer by far, the rare Fortune 500 company based in a small town. At its peak, it employed roughly 5,000 people there, including executives in the headquarters, and many more in plants around the country.
But then came the 1980s. Since the start of the Reagan administration, Anchor Hocking has undergone a series of staggering transformations as a result of the financial manipulation that has come to define the American economy in the late 20th and early 21st centuries. Carl Icahn bought up shares and demanded a board seat and other changes, then agreed to leave the company alone after being allowed to sell back his ownership stake at a premium—a practice commonly referred to as “greenmailing.” Then, Anchor Hocking was purchased in a leveraged hostile takeover by Newell Corporation. After Newell’s own near-disastrous merger with Rubbermaid, Anchor Hocking was sold off in a debt-financed buyout to the huge private-equity firm Cerberus Capital Management. The company promptly fell into bankruptcy, out of which it was sold in another debt-financed buyout to a much smaller private-equity firm called Monomoy Capital Partners. There was a forced marriage with the silverware company Oneida, then an initial public offering after which the stock soon tanked. In quick succession came a shutdown, a notice (in accordance with the Worker Adjustment and Retraining Notification Act) that the place might close for good, a second bankruptcy during which the former creditors became the equity owners, and countless leadership rotations. During the past 15 years, it’s had three different corporate owners. In January the company’s name was changed from EveryWare Global to The Oneida Group.
This is one reason I couldn’t get behind the Mitt-Romney-is-a-good-man line. Imagine making your living like this, buying and selling “assets” for profit, with actual human being shaking out with every deal. What do you tell yourself at 2 a.m. when you’re staring at the ceiling? They’ll retrain and land on their feet, or maybe their knees, from which they will rise, eventually. I remember Lancaster even earlier than my college years; a friend and I used to pester her mom to drive us down on Saturdays, to a horse livery in the hills. On the way home, we’d stop at the glassworks and pick through the scrap piles for interesting pieces to take home. It was a real place, in the Hocking Hills. There was a there there.
And, of course, there is collateral damage:
“Stability has been replaced by chaos,” Shannon Monnat, a sociologist and demographer at Penn State University who researches the interplay between economics and health, says of such situations. The longer the stress lasts, whether it involves family, community, or work, the more disheartened people become and the more faith they lose in the system, until, finally, they disconnect to survive.
Monnat has recently been studying “diseases of despair”—the plague of opioid addiction, alcoholism, and suicide afflicting places like Lancaster. She’s found that instability at work is strongly correlated with the prevalence of these problems as well as with social and family breakdown. Drug abuse is not solely due to the cheap availability of heroin or meth, nor some imagined weakness of the working class. Monnat believes it’s also caused by people’s loss of faith that they each occupy an important place in the American system.
I believe that, too, but no one asked me. And now we have someone in charge who thinks even less of these folks than the private-equity firms that batted the company around like a bored cat with a mouse.
I need to perk up. Maybe I should hit my new marijuana stash! (Same story I posted yesterday, but hit it up if you didn’t already.)
Or maybe I’ll just go to bed. G’night all.