How Private Equity Plundered The American Economy | Ft. Adam Conover

I grew up in Indiana going to a grocery chain called Marsh. John Marsh was no saint, but from what I hear, you could work there full time until retirement with a reasonable quality of life and a pension for retirement. Eventually, Marsh was bought by private equity firm Sun Capital Partners. they cut full time staff to as much part time as possible, stopped buying local produce, and mismanaged the pension. They stole a good company from us, they even robbed Marsh retirees of their pension when they shut down. Then, the Sun Capital executives paid themselves bonuses while shuttering Marsh in 2018. If there is such a thing as pure evil, it's private equity

My company was purchased by a private equity firm years ago. At the time the popular talking point was “We’ll have deeper pockets to hire more people to grow our business with this investment.” Over the years, we saw jobs cut, no roles backfilled, the slow removal of our company culture in the ways they gave back to workers. Used to have a monthly birthday party for all birthdays, more company picnics and give aways, free food in the break room, an annual bonus, higher raises, etc. No more. They cut costs everywhere little by little mostly in employee benefits to create a false balloon in profits so we could be sold off to another company, giving the PE firm and any executives with a private equity holding a huge windfall. We were sold to IBM, which has been even worse. Our company as it was is no more… before this our company prospered for thirty years. Thanks for making this video. I wish it wasn’t so relatable 😢

I worked for Hertz for 22 yrs. We were the leader in the industry. Top market share. Solid financials. We were purchased by a private equity group in a leverage buyout. It destroyed the company. Thousands lost their jobs, customer service went in the toilet. The age of the cars on the road skyrocketed. Absolute destruction. Then they bought Dollar and Thrifty Rent a Car. Now 3 companies own all the brands you have heard of. Hertz went into bankruptcy entirely because of the private equity pirates. It was during covid but they had dug the grave long before that. It pisses me off to this day. I was proud of what I did for a living and these scumbags destroyed it for everyone. But a handful of people made a fortune while our careers were trashed.

To all who think that business tactics like those shown in the video should be illegal, remember the Golden Rule. "Those with the gold make the rules." The greed is ridiculous.

I’m a product of 2 now-retired teachers, and this makes my blood boil. My parents started in the 70s, so their retirement is pretty secure, but my stepmom switched to teaching in the 90s, and she got a way worse retirement deal. The gap between rich and poor has widened so much in just this generation that I do not see home ownership or retirement in my future, just debt. It’s incredibly depressing

There should be a law that you can’t buy out a company and then transfer the debt you used to buy that company to that company. That seems to be the crux of the problem. The PE firms have to keep that debt on their own books.

I remember my sheer disgust upon learning why ToysRus was no longer around The idea that the same kind of utter scumbags have simply gone on to ruin even bigger things is downright criminal

I got a feeling that totally happened to the company I worked for. We celebrated making 1 BILLION with a huge party and health fair where we got free food, prizes, and even flu shots if you wanted, then they got bought out and suddenly only 'executives' could use the employee cafeteria, my department got moved into a tiny building across the street, and two years later it went bankrupt.

In other words if your company announced that they got bought by private equity, start looking for a new job

Only bit you missed is them working with hedge funds to short the stock of the company to get another win in their hat!

If it looks like the mafia, swims like the mafia, and quacks like the mafia, then it probably is the mafia. RICO when? IRS?

My previous job got bought by private equity. Last year, they laid off literally over 60% of all hourly employees across the company. They just recently filed Chapter 11 Bankruptcy Protection

The PetSmart comment made me realize that's the reason so many things changed for the worse while I worked there (in the petcare department, not the salon). So many infuriating, nonsensical regulations, requiring us to do double the work in half the time, taking away dedicated time for animal care and instead making us do all of it while also helping customers, which had a hugely negative impact on the quality of life of those animals. It was infuriating and beyond frustrating and part of what eventually made me decide to quit after many years of working there.

This is what happened to Hostess. THREE TIMES. Then, they blamed the debt on the employees.

I work in finance, this guy explained it in laymen terms but yeah the average person doesn’t understand how much of a sham finance i general is not just private equity

I started working at Petsmart in 2015 as a grooming assistant/ "bather". I quickly moved to small animals and stayed there for 3 years. We had a great store manager then who shielded the store from most of the BS. That said, I’m glad I left when he did. He got moved to a crappy store and then got fired for a grooming dog death (not his fault but someone had to be on the chopping block). I will tell you this, Grooming deaths are 100% due to time pressures. Most dogs are put in kennels with blowers to dry, allowing multiple appointments at a time. However, certain breeds CANNOT be put in these drying kennels or they will overheat. This is also why we weren’t allowed to accept sedated dogs (which led to owners lying about sedation). An overworked bather can forget to go back and turn off the dryer (which is what happened at the store mentioned above) or they can feel pressured to put a vulnerable breed in a dryer because 99.99% of the time the dog will be fine. 😢

This video was great... but it barely scraped the surface of what happened to Toys R Us and other stores. If you are interested, there are numerous videos and articles written about it. In the meantime you may be asking yourself why is this allowed? Adam tried to explain it, but I think there is a much simpler way to show it: Ask yourself this question: When Toys R Us went out of business what did you hear about it? did you hear the business was mismanaged? did you hear that it couldn't keep up with Amazon? If that is what you heard, that is why this is allowed to happen. Private Equity firms put in a lot of effort to steer the initial narrative when the gut a famous business and it implodes in the public eye. They will spend millions on PR to make sure the first stories out shine the light in the wrong direction. After a few weeks when the truth comes out, most people have already accepted the initial story and moved on.

The rules should also allow and encourage the bankruptcy courts to claw back the fees paid to these private equity firms.

This happened to the largest furniture retailer in Michigan, Art Van. They went from being in the black, owning all the land their stores were on (i.e. no debt), to completely bankrupt and shuttered in 2-3 years of being bought out by a PE firm. The smarter employees that had pensions jumped ship before this happened, but it screwed a lot of people over.

This happened to the pharma company I worked for. It got snapped up by private equity, then we were all laid off with no notice. Sorry, not getting that severance package we were promised. We got to keep our health care insurance for the rest of the month. Five days. It was actually illegal and the state said they were investigating, but nothing happened.