ONCE again the spotlight has been put on the private equity locusts.
This time a Financial Times investigation has shown how TPG, CVS and Merryl Lynch Private Equity put £600 million into turning Debenhams into a private company, wrote in £1.1 billion of debt onto its balance sheets, remortgaged a number of the stores, then raised £325 million from the bond market before rewarding themselves with a £130 million pay out shortly after they took Debenhams over.
Meanwhile, the store was having a more or less permanent sale with goods that were harder to shift moved on through using massive price cuts.
TPG put in £250 million and in the refloating of the company almost three years later came away three times better off financially, not including the 14 per cent stake it kept in the store.
The new shareholders were not so fortunate. Their share price has collapsed from 195 pence a share down to 120 pence a share.
The company has been raided, and plundered, with a ruin left to be sold off masquerading as a roaring trading success.
TPG are already infamous. But they are better known under their former name, the Texas Pacific Group.
This is the group that confronted, on the morning of August 10, 2005, the Gate Gourmet workers with over 130 replacement workers, with the intention of provoking a situation where they could make use of the Tory and Labour anti- union laws to sack up to 800 workers.
On that day, Gate Gourmet brought 12 trained bodyguards employed by the internationally known Kroll company onto the sight, as well as security forces employed by ISS, whose website advertised that the company’s employees had seen service in Iraq, Kosovo and Afghanistan.
As well, the company called in armed riot policemen – all to confront and help sack hundreds of mainly middle aged Asian women.
Truly there was a new concept of industrial relations at work here!
The workers went to the canteen to await a meeting with their union, the TGWU, and were then sacked by megaphone, by Gate Gourmet managers, with the afternoon shift getting the same treatment.
In fact, some of the women workers were dragged out of the canteen by security guards.
The whole of the working class was furious at this action and the baggage handlers at Heathrow famously walked out in support of the women.
The working class wanted to fight but their leaders decided to run.
After pledging many times that he would only negotiate concerning the Texas Pacific survival plan when every worker was returned to their job, Tony Woodley, the TGWU leader, aided by Brendan Barber, the TUC leader, sold out with both agreeing to support the survival plan and to mass compulsory redundancies.
Barber was so keen to be seen as a friend of Texas Pacific that he personally signed the ‘compromise agreement’ giving the go-ahead to mass redundancies and the survival plan.
This shameful surrender obviously encouraged the venture capitalists that they would be allowed to get away with anything in Britain.
However Gate Gourmet workers have carried on fighting and have pursued the Texas Pacific group all over Europe, to the point where the latter have found it better to be known as TPG.
The rape of Debenhams shows clearly that the leopard does not change its spots.
the whole of the trade union movement must be mobilised to expropriate the venture capitalist groups. Top of the list of the wrongs to be righted must be their treatment of the Gate Gourmet workers. They must all be returned to their jobs on their old terms and conditions.
The trade union leaders who betrayed their struggle must be sacked!
