business news in context, analysis with attitude

The Boston Globe reports that the situation at Market Basket has gone from bad to worse, as protests by employees over the June firing of CEO Arthur T. Demoulas led to a slowdown of deliveries to stores, which led to empty shelves, which led to the firing of a number of management-level employees including long-time warehouse manager Dean Joyce, all of which culminated in tweets and photos posted on social media by employees and customers that put the level of the company's distress in sharp relief.

The story says that "on Friday, workers swarmed the company’s corporate headquarters in Tewksbury, vowing to cut off restocking at individual supermarket locations until the Board of Directors reinstates ousted CEO Arthur T. Demoulas." They appeared to make good on the threat, which led to the additional firings. At the same time, employees posted handmade signs in at least some stores explaining the out-of-stocks, saying that they hoped Arthur T. Demoulas would soon be returned to his job and that things would get back to normal.

District manager Tom Trainor, in a speech at a Friday rally, put it this way: “We can shut this company down."

According to the Globe, "Employees had told the board of directors they required a response to their demand for Demoulas’s re-instatement by 4:30 p.m. Thursday. On Thursday afternoon, co-CEOs Felicia Thornton and James Gooch released a letter saying the board would meet by telephone on Monday to discuss the demand, and that at least two employees would be given the opportunity to speak with the board … The letter from the CEOs also said any employees who 'abandon' their jobs would be fired … Leaders of the employee movement were careful not to label the action as a strike or a lockout, and indications were that many of those who did not work had called in sick or used vacation time. It’s not clear how that strategy would affect Thornton and Gooch’s edict, though it would figure to give those employees some leverage. Several employees at the rally said they were willing to lose their jobs."

Arthur T. Demoulas’s similarly-named cousin, Arthur S. Demoulas, led a longtime fight to oust the CEO due to a conflict over the company’s finances. The fight is characterized differently by the two sides. The Arthur S. Demoulas faction argues that Arthur T. Demoulas spends money irresponsibly and refuses to take direction from the board. The Arthur T. Demoulas side maintains that his cousin is fueled by greed, only interested in raising prices, cutting employee compensation, and threatening the formula that has built the company to a New England success story.
KC's View:
The thing that new management has to be worried about is that even if they were to bring back Arthur T. Demoulas - an action that would involve an awful lot of groveling, I suspect - things could be, to use a phrase from the military, "FUBAR." It is just hard to imagine everything going back to the way they were … which is a shame for the employees and customers at Market Basket.

Hard to know all the ins-and-outs of the situation, but it does seem reasonably clear that a) Arthur S. Demoulas took his eye of the ball and underestimated the impact of the firing on the conduct of business, and b) egos got in the way of doing business.

Yup. "FUBAR" seems about right…

By the way … how many retailers would kill to have employees so dedicated to the company's CEO and so committed to the company that they are willing to lose their jobs rather than abandon a cause? Sure, they're worried about their pensions and other compensation issues, but this seems greater than just that.