Last October, 52 workers at the Sabre Industries manufacturing plant in Sioux City, Iowa, walked off the job after repeated demands for wage increases were reportedly ignored by management. I was covering the Kellogg’s strike in Omaha, Nebraska, for TRNN at the time when I received a Twitter DM from one of the workers at Sabre alerting me to the sudden walkout. Stagnant wages, dwindling employee benefits, and lack of COVID hazard pay were among workers’ chief concerns when the walkout occurred.
Five months later, the workers are in the midst of a contentious union election that has pitted them against volatile management and a team of union-busting consultants called in from out of state to discourage workers from voting “Yes.” Ballots for the union election were mailed out to workers on March 14 and are due back by Monday, April 4. The official counting of ballots will be conducted on April 5.
This is the third time that workers have attempted to organize a union at Sabre Industries in Sioux City in recent years. The last attempt took place in 2018, when workers reached out to the International Brotherhood of Electrical Workers (IBEW) with the intent of filing a petition for a union election with the National Labor Relations Board (NLRB), but they were unable to guarantee enough signatures by rank-and-file workers to cross the threshold that would have triggered an NLRB-conducted election. (As the NLRB website states, “If at least 30% of workers sign cards or a petition saying they want a union, the NLRB will conduct an election.”) Another union election that took place in 2016 at a plant in Hicksville, Ohio, was ultimately unsuccessful. This time, however, workers at the Iowa plant furnished enough signatures to bring an election to the plant and filed their petition with the NLRB in early February.
Sabre Industries is one of the largest manufacturers of steel structures used for telecommunications in the US. The Sioux City plant, which employs about 500 workers, is currently undergoing a $25 million expansion that would bring an estimated 76 new jobs. Additionally, Sioux City City Council and the state of Iowa furnished millions of dollars in TIF and state financing in order to complete the project. The expansion, which is nearing completion, includes a large metal galvanizing facility that would dramatically increase the plant’s manufacturing capacities.
In April 2021, the company was acquired by Blackstone Group Inc., an alternative investment management company based in New York City that, as stated on its website, invests “across the alternative asset classes in private equity, real estate, credit and hedge funds as well as in infrastructure, life sciences, insurance, and growth equity.” In Blackstone’s financial reports for the fourth quarter and full year of 2021, Chairman and Chief Executive Officer Stephen A. Schwarzman stated, “Blackstone’s fourth quarter results represented a remarkable finish to a record-breaking year. Our limited partners entrusted us with $270 billion of inflows in 2021, with assets under management rising 42% to $881 billion—our fastest growth rate in over a decade.” This time last year, Chibuike Oguh reported in Reuters that “Schwarzman pocketed at least $610.5 million in 2020 from dividends and compensation, more than any other private equity executive and up 20% from last year despite the impact of the COVID-19 pandemic, regulatory filings showed.”
Blackstone’s acquisition of Sabre Industries came at a time when the Biden administration was ramping up its efforts to push plans for a historic investment in national infrastructure through Congress. Infrastructure is a key area of focus for the private equity arm of Blackstone’s investment management operation, though other companies that Blackstone has acquired as part of its Corporate Private Equity portfolio include the dating app Bumble, Ancestry.com, and SERVPRO.
According to a 2021 report prepared by Samir Sonti of the CUNY School of Labor and Urban Studies, commissioned and distributed jointly by the American Federation of Teachers (AFT) and the Americans for Financial Reform Education Fund (AFREF), private equity firms utilize a “leveraged buyout” to acquire companies like Sabre Industries. “Central to the private equity business model is the leveraged buyout, through which a general partner, or private equity manager, utilizes a substantial amount of debt—or ‘leverage’—together with investors’ capital to purchase a company,” the report states. Sabre Industries has passed from firm to firm over the last ten years, with two buyouts from other private equity firms—Kohlberg & Company, LLC, and The Jordan Company, LP, respectively—happening in 2012 and 2019.
Up until the 2008 financial crisis, these types of investments generally brought forward a return that justified the purchases. Such investments, however, caused a massive problem for the working class. According to the AFT-AFREF report, “Worker rights organizations have drawn attention to the ways in which private equity firms have contributed to and profited off bankruptcies that have had devastating impacts on workers and retirees.” There is, sadly, much ready proof of the destructive force company buyouts by private equity firms can have on workers and consumers. In a 2019 piece for The Nation entitled “This Is a Horror Story: How Private Equity Vampires Are Killing Everything,” labor journalist Kim Kelly writes,
Private-equity firms have quietly taken over a large swath of the American economy: buying up companies, selling them off for parts, then stealing away unscathed. There’s a reason presidential hopeful Elizabeth Warren has been so outspoken against them… In just under two years, these firms have turned LA Weekly into a lifeless husk, ravaged The Denver Post, gutted Sports Illustrated, and silently strangled dozens of local newspapers across the country… Over the past decade, they have killed 1.3 million retail jobs, and the Los Angeles Times reports that 10 of the 14 largest retail chain bankruptcies since 2012 were at private equity-acquired chains. A famous example of their brutal negligence is Toys “R” Us, which was driven into bankruptcy after being acquired in 2014 by a pair of private equity firms, KKR and Bain Capital. Some 33,000 workers were laid off, and it took months—and a class-action lawsuit—before workers got the severance payouts they were owed… Private equity has wiped out entire grocery chains. It controls the price of calling our loved ones in prison. It profits off the bail bonds and payday loans that extort poor communities of color. It bought the Playboy Mansion (for better or worse). It kneecapped millennial fashion staple Forever 21. It even killed Necco wafers—and left the crumbs for the rats.
According to the Private Equity Stakeholder Project, more than 11.7 million workers are employed by private equity-owned companies in the United States today. As the firms work to increase the cash flows at the companies they buy, “private equity firms have often taken a low road approach and sought to reduce wages, benefits, and staffing at firms they acquire—with devastating consequences to workers, their families and entire communities.” Since Sabre Industries began to be acquired by private equity firms, workers at the Iowa plant say they have seen such cost-cutting measures implemented to the detriment of their workforce, including the steady erosion of benefits over the last couple of years. As worker-organizer and current Sabre employee Larry O’Dell put it, “Sabre just keeps taking stuff away.”
Work at the Sioux City plant is demanding and can be dangerous. Employees report working up to 60-hour weeks, 7 days a week, with very little time off, causing staff turnover as people cycle in and out of the plant. According to Beau Scott, a welder-fitter with three years of tenure at the company, the rate of staff turnover is a burden on workers and the company, but it’s not a surprise. “The place has been a revolving door for as long as I’ve been there,” Scott said. “People leaving, new people always coming, cycling through, and [then] they realize all the crap and they end up leaving. There’s a select few leads and managers that drive people away. It’s hard to get that sense of community going. There’s people that have been there for years and years longer than me, but even me—I’ve only been there for three years and I’m already technically a veteran compared to everyone else there.” This is one of the reasons Scott believes a unionized workforce would be beneficial for everyone and go a long way to repairing the company’s reputation among past and potential employees: “people would actually want to come work for Sabre.”
In the last 5 years, the Iowa-based manufacturing plant has been subject to multiple OSHA accident investigations. Two accidents at the Iowa plant, which occurred in March and April of 2019, resulted in workers being hospitalized with traumatic injuries and the company paying out paltry fines as a result. “Considering what we do,” Scott said, “of course we’re underpaid.”
BRINGING IN THE UNION BUSTERS
Not long after the workers began to work with IBEW organizers on a union drive, the company brought in consultants from the Labor Relations Institute (LRI), a known union-busting (“union avoidance”) firm, to begin a series of captive-audience “informational meetings” at the plant. On their website, LRI boasts over 40 years of helping clients “earn, protect, and retain their direct relationship privilege,” touting a record of “10,000+ union elections won,” by which they mean elections that swung in favor of their anti-union clients.
LRI’s website also hosts a number of free whitepapers for businesses looking to prevent unionization and thwart efforts by workers to organize, including one 2010 whitepaper titled “Left of Boom: Best Practices for Proactive Companies in a Changing Labor Environment,” which is listed under a dropdown menu titled “What Can Your Business Learn from the Iraq War?” In “Left of Boom,” LRI President and General Counsel Phillip Wilson paints a picture of US soldiers being ambushed by improvised explosive devices in Iraq and Afghanistan, prompting a tumultuous scene wherein soldiers “spill out in a desperate effort to try to catch the renegade insurgent who triggered the road-side bomb” while scrambling to deal with the damage caused by the explosion. The ultimate conclusion of Wilson’s labored—and pretty damn revealing—analogy is that, just like military operatives must have a preemptive, offensive strategy for thwarting terrorist bombers and preventing deadly explosions from happening in the first place, businesses looking to squash workers’ efforts to unionize need to, well, you get it.
Granted, Wilson does admit that “One can take the comparison between negative employment events or union organizing and insurgent networks too far… Nevertheless, from a strategic standpoint, there are similarities in the underlying strategies of a guerilla insurgency and a union organizing campaign. There is much to be learned from effective military strategies to develop business strategies to respond to attacks by outside ‘forces.’”
According to documents obtained by The Real News, Sabre Industries requested that LRI “provide a subject matter expert to educate and prepare [their] employees for union organizing activity.” The original Statement of Work, dated October 25, 2021, has since been replaced with a “verbal agreement” between the company and independent contractors brought in by LRI to the tune of $200 per hour plus expenses. A Jan. 2022 LM-20 Agreement and Activities Report filed with the Office of Labor-Management Standards documents the enlistment of one of the private consultants—Gus Flores, President of GNE Consulting Services Inc.—“To persuade employees to exercise or not to exercise, or persuade employees as to the manner of exercising, the right to organize and bargain collectively through representatives of their own choosing.”
The meetings designed “to educate and prepare employees for union organizing activity,” which took place every week leading up to the election, featured the typical rhetoric employed by union-busting firms to dissuade workers from voting in favor of unionization. In an audio recording of one such meeting obtained by TRNN, Flores claimed to only be interested in presenting “the facts” to workers about what bringing a union into the plant would mean. Like consultants employed to host similar meetings at companies like Amazon, Flores stressed the importance of workers maintaining a “direct relationship” with management instead of having to mediate worker-manager relations through the union, which is described as an outside party (a “whole separate organization and entity”). O’Dell found these homages to direct relationships between workers and management to be particularly ironic: “They talk about direct management relationships,” he said, “but we already don’t have a relationship with HR.”
For Scott, the reasoning for such tactics is clear. “Unions are the epitome of democracy, you know? It’s [the] power of the people, power in numbers,” he said. “If these big companies were really looking out for our best interests, why are they wasting so much time and money trying to stop us from doing this?”
Despite the evident anti-union bias presented in the meetings, some workers continued to push back. In recordings of the captive audience meetings provided to TRNN, multiple workers spoke in favor of the union. At one point during a meeting in December 2021, one worker spoke up in response to a statement about management’s willingness to listen, saying,
Sabre Industries Employee: “They say they listen, but they don’t listen worth a shit. If they listened, why is it that 52 people clocked off one day and went on strike? Because we’ve all told them everything multiple times over the years and it just seems to go in one ear and out the other. So why did it come to that point if they say they listen?”
Gus Flores: “… I can’t, I can’t answer that…”
At another point in the same meeting, O’Dell raised a number of issues to Flores, most notably the participation of workers in the collective bargaining process should the election be successful.
Larry O’Dell: “So you brought up that you wouldn’t be able to negotiate your wages with your employer and whatnot… but that’s the whole thing with the union: the employees are part of the union. And also, you negotiate these things while you negotiate the contract so you wouldn’t have to go to the employer to talk about these things because it’s already in a contract planned out beforehand.”
Gus Flores: “If the company agrees.”
LO: “Well, yeah, of course. It’s a negotiation.”
LO: “If we group together, and we use our leverage, you would think–”
GF: “You would think…”
LO: “That we’d have a little bit more power, because the company’s not making money if we’re not producing.”
GF: “On the contrary, in my opinion, you would lose power, because you put your faith into a whole separate organization and entity—”
LO: “Well, it’s not a separate organization, because it’s us.”
GF: “Okay, well we can argue until the cows come home–”
Apparently O’Dell’s commonsense questions were not appreciated by Flores or his clients—he was eventually barred from attending any additional meetings conducted by management and the outside consultants from LRI.
While high-profile union elections—and stunning union victories—at companies like Amazon and Starbucks have captured national attention, critical struggles like the one taking place in Sioux City have gone sorely underreported. For workers at Sabre Industries, however, the upcoming union election could have dramatic implications for their lives and their jobs.
Should the election break in favor of unionization, workers like O’Dell are hoping for a strong contract that includes a Cost of Living Adjustment, which would guarantee wage increases that keep pace with the rising cost of living within Sioux City, better overtime rates for workers who work more than 40 hours per week, and security in their insurance and retirement benefits.
In addition to the material benefits that a collective bargaining agreement could provide, Scott stressed his want to foster more of a brotherhood at the plant. “I just want us workers to have more of a sense of community,” Scott said. “We as a species made it this far by [building] community and working together, and that should spill over into the workforce.”
When I asked about the general feeling among workers in the plant, O’Dell remained positive, despite the attempts by management to dissuade workers from voting “Yes.” “Most of the people I talk to are on board. I haven’t been able to talk to everyone but the mood is generally positive,” he said. “I’m still hopeful that we’re going to win.”