Sunday, August 2, 2015

Amoroso's delays deadline as drivers balk

Amoroso's drivers would collect hundreds more a week, but would also owe thousands more each year, under a proposal from the boss

Amoroso's delays deadline as drivers balk

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Amoroso's Banking Co. is having a tough time so far getting drivers to borrow money to buy their routes so it can replace its 77 Teamster drivers with 60 independent contractors by its mid-June target date, drivers and family members told me this morning. (Previous coverage here).

Nobody formerly applied to borrow $100,000-plus to buy his route by yesterday's original deadline, so the company is extending applications by another two weeks, according to people familiar with talks between owner Leonard Amoroso and his drivers.

"The guys are still going to the meetings" the company has held to discuss its proposal, Bob Ryder, president of Teamsters Local 463, told me. But he predicted few if any takers: "Some of the guys already found other jobs." He said Amoroso should feel pressure to change his plans or sweeten the offer: "He knows the salesmen make this business work."

Amoroso and his son Jesse didn't return calls for comment; here's what I'm hearing from people who have received the company's proposals, some of whom are still thinking about whether to apply:

At least 20 of the 77 drivers have expressed some interest in buying some of the 60 routes Amoroso is offering. But Amoroso's thick legal requirements have turned off many drivers, especially older men who are close to retirement.

Typical drivers at Amoroso's make $60,000-$65,000, plus benefits, plus several weeks off (you can't take off days, it has to be weeks), in exchange for 6-day (actually overnight) workweeks of 12+ hours/day, holidays included. A few drivers make significantly more.

The drivers say they've been told they can boost their gross incomes by around $300 a week ($16,000/year) if they take the deal. From that increased income they'll have to pay health and retirement, fuel for 200+ miles daily trips, and $35+/week computer rentals, among other expenses. Plus interest on $100,000+ route-purchase loans that would be repaid, 10 percent through Amoro's consultant John Spaker at 12.5% yearly interest, and 90% to an Amoroso's affiliated lender at 8%.

Amoroso's people say non-union drivers at upstate Pennsylvania's Utz potato chips refused a similar offer by that company last year.

Among the uncertainties that keep drivers from sleeping on Amoroso's proposal are the radical changes in the local supermarket business which accounts for a big chunk of the company's business. Store closings and layoffs at the region's dominant chain, Acme Markets, have drivers wondering if they can bet on that big Amoroso's customer lasting through the summer.

They're also concerned Amoroso's won't say whether they'll be based at the company's aging bakery at 55th and Baltimore in West Philadelphia, or at some other new site Amoroso's has been looking at (and, so far, won't disclose).

Amoroso's already has some "jobbers" who buy bread at the loading dock and sell it, with other products, to their own customers. But the deal Amoroso's is offering its drivers prevents them from working for anyone else.

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About this blog

PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, distefano251@gmail.com, 215.854.5194 or 302.652.2004.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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