The Pervasive and Persistent SEIU
By Danielle Fugazy, MU Blog
December 6, 2007
It seems like every day I get another press release from the Service Employees International Union (SEIU) complaining about a portfolio company of a private equity firm. Not too long ago they made noise about Toys R Us, a KKR-backed company, having to do a product recall, while more recently they pushed a wheelbarrow of pretend cash along Pennsylvania Avenue, near Caryle Group’s offices, to criticize what they view as tax breaks for private equity firms. For the unitiated, SEIU is a 1.9 million member union that bills itself as "the largest health care union, the largest property services union, and the second-largest public employees union.” After the HCA transaction, then the largest LBO ever at $33 billion, the SEIU became publicly critical of private equity firms, arguing that buyout shops were bad for the economy and certainly bad for union workers. Not surprisingly, large acquisitive firms like Carlyle are frequent targets. The most recent deal that sparked the SEIU’s ire was Carlyle Group’s pending acquisition of healthcare operator Manor Care. (The shareholders approved the sale last month, and Carlyle should own the company by year-end.) In many of their press releases, the SEIU complains that the firm is out to increase profits for themselves and shareholders, putting the needs of patients and healthcare workers second. As you all know, private equity firms do look to make companies more profitable, but how would Carlyle do that without providing good patient care? If care suffers, then people will not use the facilities and Carlyle will ultimately lose money. If workers aren’t treated right, then care suffers and Carlyle ultimately loses. What it comes down to in this case is, the SEIU wants to organize Manor Care’s 60,000 employees. The irony is that while the SEIU goes on and on about The Carlyle Group’s endless power and lack of responsibility, the SEIU doesn’t seem too weak itself. All of its recent demonstrations, radio campaigns and press releases take time and money. So far, the SEIU has only impacted the largest buyout firms directly, but if the SEIU keeps kicking out press releases and more credit turmoil turns the public against financial companies in general, there could be a trickle-down effect for the larger middle market transactions.
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