Summary
Overview
This Planet Money episode explores an innovative experiment in private equity where Pete Stavros of KKR has been giving workers equity ownership in companies they acquire. The story follows workers like Cindy Cordes and Mike Pavelko who experienced life-changing payouts when their companies were sold, challenging the traditional private equity model of cost-cutting and job elimination. The episode examines both successes and failures of this approach across 85 companies affecting over 190,000 workers.
Cindy's Story: Working at Capital Safety
Cindy Cordes worked at Capital Safety making life-saving harnesses and safety equipment. When KKR bought her company in 2011, she had mixed feelings about private equity ownership, fearing potential job losses or overseas relocation. Though the facility stayed open, workers remained uncertain about their future and what this acquisition would mean for their livelihoods.
- Cindy worked at Capital Safety making safety equipment like harnesses for skyscrapers and oil rigs, overseeing a team of 40 people
- When KKR bought the company in 2011, employees worried about job cuts or the company moving overseas
- Capital Safety workers had concerns about finding new jobs if the plant closed, as there weren't enough local manufacturing positions for everyone
" sending out quality equipment and knowing that it's going to save people's lives. "
Pete Stavros' Origin Story and Vision
Pete Stavros' experiment was inspired by his father Harry, a road grader operator who experienced decades of adversarial labor-management relations. His father organized a creative protest over unpaid lunch breaks by timing material deliveries to cause costly work stoppages. This experience led Pete to wonder if there was a better way to align worker and company incentives through profit sharing and ownership rather than perpetual conflict.
- Pete's father operated a road grader for over 40 years and was often specified in municipal contracts by name
- Workers and management had structural tension - workers wanted more hours for pay, employers wanted work done faster
- Pete's father organized workers and truck drivers to deliver materials at lunch time, then refused to unload them during unpaid lunch, shutting down worksites
- The inspiration came from Pete's father asking why there couldn't be profit sharing or ownership to align workers and management on the same side
" My dad would come home and say, can you believe this is what we're doing? You know, we're all adults and this is how we're behaving as opposed to having the same incentives and all wanting to work together. "
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