Monday, December 22, 2014

Amoroso's families face tough decisions

"I know this news may cause you some anxiety," the boss wrote, as he offered workers a choice between layoffs and going into debt to rent their delivery routes

Amoroso's families face tough decisions

"I know this news may cause you some anxiety," Leonard M. Amoroso Jr., hereditary boss of his family's century-old, Lansdowne-based roll-baking company, told dozens of route drivers who truck his bread to markets and sandwich shops across the Delaware Valley, six days a week.

He wasn't quite sending his men onto the street in the April letter. But close: "Amoroso's Banking Company intends to restructure its distribution system and to sell distributorshps to full equity independent owners."

In case the message wasn't clear, Amoroso also sent layoff notices. Your jobs, he told them, "will be eliminated effective June 19."

To replace his 77 Teamster drivers, Amoroso plans to hire independent contractors. He offered the drivers a chance to buy their delivery routes.

Drivers say Amoroso's wants $100,000 and up for a route. Buyers will "own the rights to distribute our products to retail, restaurant, institutional and food service direct store delivery accounts."

Amoroso's is reorganizing its workers into mini-capitalists under the banner of Amoroso Sales Co., with help from a New York consultant, John Spaker of Distribution Consultants Inc., who was unavailable for comment yesterday.

Why all this? "The change will enable Amoroso's and its new distributors to recognize increased income growth and long-term stability," the boss said in one of his letters.

Amoroso promised to sell the drivers their routes at a "substantial discount from our estimate of market value." (Of course, if the routes are really worth more than he's charging, he could instead sell them to the highest bidders, then use the difference to pay off drivers who are close to retirement, until they're eligible for their pensions.)

Where can drivers borrow that kind of money these days? Amoroso offered "financing of up to 100% of the purchase price." He promised "buy back" agreements that would allow drivers to sell the routes back to Amoroso's for "a full refund of the purchase price," and "for any reason."

Drivers were to have confirmed interest in buying a route as of yesterday. How'd that go? No immediate comment from Amoroso or from Teamsters Local 463 President Bob Ryder, who has opposed the move, filing grievances that could delay the process.

"We expect that many of these driver salesmen will take advantage of this great opportunity, and in several cases they have inquired about purchasing more than one independent distributorship," Len Amoroso's son Jesse told me last month.

Since then, I've been hearing more from drivers and their wives, who say they're scared to be quoted by name because they fear the boss could retaliate by firing, which would make it tough to collect unemployment after the layoff. From their words, I can say Amoroso's right about at least one thing: the proposal has caused "some anxiety." Sample comments:

"Here's a typical Sunday through Friday night week at Amoroso's, holidays included: Out of the house by 11 p.m. Pick up the truck. Load the truck at two different warehouses. Hopefully the rolls are done. Usually not... Travel over 150 miles to deliver rolls to 30 customers... Pick up their empty trays (and) payments. Then back to the warehouse by noon the next day. Home by 1 p.m., lunch, and bed until the clock strikes 10 p.m." Then do it again. "And don't call out sick. There is no way to cover that...

"Most of the drivers agree the company has the right to run its business how it wishes." But, the same person added, Amoroso's sudden announcement, after some workers had scheduled and pre-paid family vacations and budgeted other expenses, has caused hard feelings and left some to wonder if they can trust the company in what looks like a gamble.

More comments: "There are people here who have just a few years for retirement, who now lose everything, unless they're willing to go hundreds of thousands of dollars into debt, lease a truck, buy their own health care, lose their vacation time. They ought to give the (older) people a (retirement) package like other employers would have done."

"There are drivers who are battling cancer, drivers with pregnant wives. Where will these people go for health insurance?"

"There is no guarantee that the customers will stay with the drivers."

"The agreement has a lot of clauses. How can we decide all of this, in just two weeks?"

"Amoroso's hasn't given much thought about the little person and the families of their employees."

Jesse Amoroso, Leonard's son, told me last month there was no truth to the "rumor" that the company was weighing whether to close its plant at 55th and Baltimore and move to a bigger, state-subsidized bakery Leonard co-owns in Vineland. But drivers say the company isn't telling them where they will report to work.

The company plans additional meetintgs over the next month, and a "final closing celebration" to mark the transfer from contracted union worker to risk-taking indebted capitalist, to "share our excitement for the future growth of our mutual businesses," to be "followed by an hour of cocktails, appetizers, and a wonderful meal, music and friends... Bring a guest... Sleeping rooms will be provided."

Just don't dare show up in your work clothes: It'll be "a tie and jacket affair."

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

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

Joseph N. DiStefano
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