Thursday, February 11, 2016

Sixers owner, Romney backer Marc Leder's Philly layoffs

Of Jevic, Aluminum Shapes, Paperworks, and low taxes

Sixers owner, Romney backer Marc Leder's Philly layoffs

Marc Leder
Marc Leder

Sixers owner Marc Leder, host of the newly famous private equity conclave in which GOP presidential candidate Mitt Romney depicted Obama backers as government-dependent parasites, has lots of reasons to support Romney:

As an owner of the Boca Raton-based buyout firm Sun Capital, Leder collects millions in annual investment fees can be taxed at the lower U.S. capital gains rate (15%) instead of income taxes at the usual top U.S. rate (35%).

Tax reformer David M. Walker (the government's top accountant under Bush and Clinton) and others have called for equalizing those rates, which would cost investment managers like Leder and fellow Sixers owner Josh Harris of Apollo Global Management many millions.

Leder’s company buys troubled industrial firms at discount prices, consolidates or sells operations, and tries to repackage and re-sell what’s left at a profit. They have laid off many hundreds of Philadelphia-area workers in recent years. I have written about some of Sun’s local transactions.

In 2008, Sun Capital laid off 1,000 nonunion drivers and workers at a company it owned in South Jersey, Jevic Transportation, as I later noted here.

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Around the same time, Sun bought another South Jersey firm, Aluminum Shapes, as I reported here.  Initially, Sun managed without layoffs, but Sun shut down production lines in the ensuing consruction recession, and has since consolidated the operation with its own Canadian aluminum fabricator, who refuses to say how many still work for the old Shapes operations in Pennsauken and Northeast Philadelphia.

Sun also owns the venerable Manayunk paper mill now operated by Paperworks, which, after shutting, splitting and selling other assets, was reorganized earlier this year.

Private equity firms typically collect 1-2 percent of the value of their clients' investments, plus up to 20 percent of profits above a nominal target. It can be a spectacularly lucrative business, and managers like Leder may well hope Romney keeps it that way.

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About this blog

PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at, 215.854.5194, @PhillyJoeD. Read his blog posts at and his Inquirer columns at Bloomberg posts his items at NH BLG_PHILLYDEAL.

Reach Joseph N. at or 215 854 5194.

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