Weaver Street Market Co-operative Planning More Stores

Geoff Gilson's picture

Weaver Street Market Co-operative still has $8 million in loans to repay from its last failed expansion project in 2007/2008. Yet, it is now planning, in its '2022 Vision', to build at least three more stores over the next decade.

I’m sorry. I misspoke. A few of the self-selected upper management in the corporate office in Hillsborough, NC are making these plans.  And, to date, have shared them only with other managers.

Owners and workers in this worker-consumer co-op, where all are supposed to be equal, are not deemed equal enough to be consulted on the planning. Notwithstanding the fact that Board Policy and Employee Policy both demand that workers be meaningfully involved in major decisions that affect their workplace.

Which is a good spot for a little history for newcomers to the Family of Weave.

In 2007, the same upper management sort of told us that they wanted us to support them in their plans to have a new store in Hillsborough (which, we were told, Hillsborough folk really wanted, and would really want to finance), expanded capacity for food production, a re-model of the Southern Village store, and a re-model of the Carrboro store.

We all said, yeah, why not? Where’s the harm? The harm was that we weren’t told all of the details. We weren’t involved when things went wrong. And we haven’t been told the truth ever since.

The boys (and girls) at the top hired idiots to do the planning (by their own admission). Didn’t get enough expert advice (“we are the experts” – I’m not joking; I quote). Bought the wrong equipment. Flour machine, anyone? Decided to own buildings. Ran over budget. Emptied the piggy bank. And then borrowed to the hilt.

When they couldn’t borrow any more, the boys and girls went cap in hand to the National Co-operative Grocers’ Association to get bailed out (‘the co-op too big to fail’) to the tune of $1.5million. A fact which only came to light when the NCGA published the story in The Co-operative Grocer two years later.

All in all, we ended up $10 million in debt. Our turnover, by the way, is about $28 million. And the same boys and girls have the nerve to compare their antics favorably to those corporate capitalists who just crashed our national economy.

There is still some $8 million left to repay. Over the next five years. Which is about $2 million each year - $1.5 million for principal; $500,000 for interest. And these aren’t local banks. No. For all our talk of re-investing in the community, this money is being exported well away from our communities.

And how do we come up with this money? Simple. By making workers work harder and harder and harder, for less. That’s why we have the seeming conflict of the Market Messenger telling us we are making record profits, while our managers are demanding we go on making 10% sales increases each year.

As good as worker performance is, WSM needs even more from us, if it is to be able to go on paying back the huge debt. And as much as WSM needs worker performance, it can’t afford to pay the decent wages or give us the decent pay raises that reflect our increased effort. Hence the working harder for less. Year after year after year.

And just when I’m thinking it can’t last forever. Eventually, the debt will be repaid. We’ll have a big party. Hugs all round. Huge bonuses for all workers (not just worker-owners). Proper dividends for consumer-owners. Well. No. This document called ‘Weaver Street Market 2022 Vision’ comes to my attention. The boys and girls have learned nothing. We’re about to do it all over again.

It purports to be a plan under discussion by management. There are 10 Strategies to achieving the Vision. Which is a noble statement, about local food, economic democracy, world peace, space travel, etc.

Well, it would be noble, if it were a co-operative vision that was being discussed by the stakeholders of the co-op (its workers and its owners), and not just by the General Manager and his chums.

Anyway. Strategy 7 says, “In the next ten years plan for a similar number of new stores as the three units we opened last decade.” If there were a literary device for the sound of a solitary drip of water hitting the bottom of a 100 foot well, this is where I would use it.

Ok. How are we intending to finance this expansion? “Partner with downtown and citizen groups to fund capital expense.” Literary device for sound of single cricket chirping in middle of empty Yankee Stadium.

Um. The last time we called on citizens to fund us, they coughed up $100,000. One of the reasons we got into such trouble in 2007/2008 was that the good people of Hillsborough, the ones we were relying on to fund their own co-op, didn’t step up. Clearly, the communities we serve have wised up to the fact that our corporate office isn’t to be trusted with their spare change. Why do we think it will be different this time?

Ok. But this can’t really cost all that much, can it? Strategy 8: “Reduce occupancy costs by … owning buildings.” Do I need a literary device?

What this is going to come down to is continuing to work workers to the bone for the next ten years and beyond. And the boys and girls of the corporate office management team know this. There is loads of talk of higher productivity. Plus Strategy 1: “Expect employees to perform at a high level by working multiple functions” “to make them more valuable to WSM” (sound familiar?).

Ok. But we will get rewarded, won’t we? You mean, like we are now? My department has achieved a total sales increase over the past two years of about 25%. We are told the co-op’s profit has increased 100% over last year, due to worker productivity. And last Fall, I got a 3% pay raise. No. The money is going to pay off the debt from the last expansion. And then to pay for this new one.

Ok. But worker-owners will get a dividend? Yes, they will. For those workers who can afford the $500 buy-in price for worker-ownership. I am still trying to get the Board to reduce that price to something ordinary workers can afford. Maybe $200. But to little avail. And with no support from the corporate office management team, or the worker-owner Board Directors.

This explains why my Dispute was never allowed to be argued by me in front of the Board, as should be my right. I began a Dispute last Winter, saying that my work experience was not fulfilling (a requirement of our co-op’s Mission Statement), and that I was not being properly involved in decision-making that affected my workplace (Board and Employee Policy).

Well, the corporate office management team could hardly allow me to address the Board of Directors on those two subjects, when they were in the middle of planning a huge and unfulfilling (for me) impact on my work experience, without so much as giving me notice.

It also explains why the same corporate office management team suppressed all meaningful discussion of the 2011 WSM Employee Survey. That Survey came up with much the same view as my Dispute. Employees felt they were being worked too hard, without explanation, and without being allowed to be properly involved in the decisions mapping a way forward for our co-op. Er. Apparently, we still aren’t.

And let’s be clear. It isn’t just workers who will be paying for this new expansion. Consumer-owners are going to see diddly-squat by way of an improved dividend over the next ten years.

So. What should be happening?

Simply put, a co-op is a voluntary association of folk, who provide for their common needs. It is for the consumer stakeholders to decide what are their common needs. It is for worker-stakeholders then to decide what they are prepared to do to meet those common needs. And finally, worker and consumer stakeholders should then instruct management and staff to implement their decisions.

What we have instead is a self-selected few of the corporate office management making the decisions. And then telling owners and workers what is good for them. What we have is the tail wagging the dog. And it keeps wagging the dog over the financial bloody cliff.

What can we do?

Demand to be a part of the discussion of ‘Vision 2022.’ That’s it. Make the demand. If you are a worker, ask your managers what is going on. Ask them when this will be discussed at Department Meetings. At Unit Meetings. Not just the implementation. But the principles, the objectives, the strategies.

If you are an owner, write to the Board of Directors (board@weaverstreetmarket.coop), or to Ruffin Slater directly (ruffin@weaverstreetmarket.coop), and ask them why you are not being involved in this planning.

There is no way Weaver Street Market Co-operative can afford another catastrophe like the 2007/2008 expansion. But the only way to stop it is to get involved. Whether the corporate office management team want you involved or not.

It is no good reading learned articles in ‘The New York Times’ about how the alternative economy might work. This is how it is supposed to work. By you and I demanding that we be involved in decision-making in our own community co-op. Before it is too late.

‘Vision 2022’ says that it will encourage the co-operative business model. Good. Let’s put that claim to the test.

Oh. On a personal note. There are some folks who say that my advocacy is an indication that I hate WSM. I don’t. I wouldn’t still be working here if I did. I truly believe that co-operation is the best antidote to the destructive tendencies of corporate capitalism. And one of co-operation’s greatest strengths is its accountability to stakeholders and community, and its promise of genuine participatory economic democracy.

You cannot have that accountability and participatory democracy if major strategic direction is being considered in secrecy, and by a small self-selected group of managers. All of my efforts, including this one, are about making WSM stronger, by making it less secret, more accountable and more democratic.

LETTERS TO RUFFIN SLATER

Aware of the impact of this post, I did first write to Ruffin Slater, General Manager of WSM, to ask him to send me a copy of the document ‘2022 Vision,’ to test how secret this whole process actually was.

I got no response. Not very encouraging.

Then I wrote him the following longer letter of … er … ‘notice’?:

“Dear Ruffin,

I must say I am disappointed by your lack of response to my e-mail requesting a copy of the document 'Weaver Street Market 2022 Vision' as it exists at the moment. Disappointed, but regretfully not surprised.

It is part of a pattern of secrecy that has become prevalent within Weaver Street Market Co-operative, since things started to go wrong with the expansion project of 2007/2008, notwithstanding our purported adherence, as a co-op registered with the National Co-operative Grocers’ Association, and articled under North Carolina General Statute 54 (Co-operative Organizations), to principles of openness and transparency. 

I have been attempting to view a set of the full Audited Accounts of WSM for several years now. Only to be ignored. And now to discover that the primary assets of WSM (not least its property) appear to be placed in companies which are not controlled by the Board of WSM. [See below: “Who Owns Weaver Street Market Co-operative?”]  

We cannot, as our slogan suggests, be a grocery store owned by the community, if we are, in fact, a grocery store whose assets may be under the control of one person – you. This is especially significant since ‘Weaver Street Market 2022 Vision’ calls for new stores to be owned, not rented. 

Management is the servant, not the master, of the stakeholders of WSM. Those stakeholders are all of the owners, consumers and workers of WSM. Not just a few of the management. It is normal procedure in a co-op for the stakeholders to be the body that decides strategic direction. Not management, in the first instance. Yet, that is what is happening with ‘2022 Vision.’ Management is seeking primacy over the stakeholders in strategic decision-making.

It is also what happened with the expansion project of 2007/2008. Not at first, mind you. There was some discussion with stakeholders. But then, a few of the upper management, with the often silent connivance of the Board, kept the detail of the project’s dramatic growth and subsequent problems to itself. Culminating in the borrowing of some $10 million, without the prior knowledge or permission of the stakeholders. 

This situation was made possible by the Board changing the By-Laws to allow the Board alone to change the By-Laws going forward. Which it then did to allow the Board to create capital and borrow funds without recourse to the stakeholders. Somewhat akin to the President of the United States unilaterally amending the Constitution, to allow him to raise taxes without reference to Congress. 

And now you seek to engage in another massive expansion project. With all sorts of far-reaching consequences for the stakeholders of WSM. Without allowing stakeholders to be the ones to make the important decisions. Floating grand ideas about the funding coming from owners. When you know the last few attempts to do so met with a pitiful response. 

Which means (as you foresee in ‘2022 Vision’) that the funding will depend ultimately on making employees work harder (“Expect employees to perform at a high level by working multiple functions”). Treating us as objects “to make them more valuable to WSM.” This in contravention of the Mission Statement’s obligation upon you to make our work experience more fulfilling. And Board Policy’s legal requirement that you involve us meaningfully in any decision-making that affects our workplace environment.

For all of these reasons, if you will not conduct discussion about the strategic direction of WSM in a manner which is consonant with the principles of co-operation, and in line with the Mission Statement and Board Policy, deferring to the common needs of stakeholders, as defined by them, rather than dictated by you, then, as a matter of ethical dissent, consonant with the provisions of the Employee Policy Handbook, I will take it upon myself to make the document ‘Weaver Street Market 2022 Vision’ widely available to the community which is supposed to own WSM, before it is too late for that community substantively to affect the outcome of the ‘2022 Vision’ discussions.

Ruffin, there are folks who say that my advocacy is an indication that I hate WSM. I don’t. I wouldn’t still be working here if I did. I truly believe that co-operation is the best antidote to the destructive tendencies of corporate capitalism. And one of co-operation’s greatest strengths is its accountability to stakeholders and community, and its promise of genuine participatory economic democracy.

You cannot have that accountability and participatory democracy if major strategic direction is being considered in secrecy, and by management dictating to the stakeholders. All of my efforts, including this one, are about making WSM stronger, by making it less secret, more accountable and more democratic.

All the best,

Geoff”

At first, no response. Then, a couple of days later, I got a reply to my first e-mail – the one asking for a copy of ‘2022 Vision’:

“Hi Geoff,

Thanks for your interest. We will be discussing this with WSM employees starting in a couple of weeks.

Thanks, Ruffin”

Which elicited this reply:

“Hey Ruffin,

Thank you for responding to my e-mail requesting a copy of 'Weaver Street Market 2022 Vision.' Whether the content of your response was promulgated by my two e-mails or not doesn't really matter, for the moment. What does matter is that there will be wider consultation, beyond merely managers.

I trust that consultation will permit meaningful input by workers. Which input will truly be taken into account. Bearing in mind that it is we workers who ultimately will be footing the bill for all this proposed further expansion. With the sweat of our brow.

I trust also that, in accordance with the Principles of Co-operation, as espoused by the International Co-operative Alliance, and as subscribed to by WSM, the final decisions in respect of '2022 Vision' will be taken by the owners of WSM, and not by management on its own. [See “Who Owns WSM?” below]

In all these regards, I know you will understand that my ethical concerns require me still to publish, not least those concerns, so that owners, consumers and workers may have time to consider their views, and within a context which is not merely the one set out by the WSM administrative office. Seeing as we are all equal in this co-op.

With thanks,

Geoff”

As always, it’s up to owners, consumers and workers to make their views count. What’s the point? you might ask. Read on …

WHO OWNS WEAVER STREET MARKET CO-OPERATIVE?

Weaver Street Market Co-operative advertises itself as a ‘community-owned grocery.’ The General Manager is on record in the local media as saying that workers should have no complaints, because workers half-own WSM.

But is this, in fact, the case?

To be sure, the International Co-operative Alliance has the following definition of a co-operative, and it is the definition to which WSM publicly subscribes:

“A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.” [My emphasis]

Before the regular WSM consumer newsletter became no more than a glorified coupon booklet, we used to print, with pride, at the front of every newsletter, the ICA Co-operative Principles. Let me remind you of a couple:

“2nd Principle: Democratic Member [Owner] Control – Co-operatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary co-operatives members have equal voting rights (one member, one vote) and co-operatives at other levels are also organized in a democratic manner.” [My emphasis]

And:

“3rd Principle: Member Economic Participation – Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.” [Again, my emphasis]

My interest in the ownership of WSM’s ‘common property’ was first tweaked when I read in The Independent that the property at the corner of Greensboro and Weaver, in Carrboro (which we all believed to be owned by WSM), was sold to CVS, not by WSM, but by a private corporation called Carrboro Community LLC, for whom the sole registered agent was Ruffin Slater. Not exactly putting the common property of WSM under the control of its members.

Ok. Maybe there was good reason for this one-off transaction involving the intervention of a temporary holding company? Surely it’s not part of a pattern? Until we dig a little further. And we discover that there are a series of ‘Community LLC’s,’ which, among other assets, own the Hillbsborough Weave.

The Gateway Building housing the Hillsborough Weave is split into three condominiums. The bottom condominium is owned by Hillsborough Community LLC, and the sole registered agent is … you guessed it … Ruffin Slater.

Even better is the fact that the documents filed with the NC Secretary of State describe Hillsborough LLC “doing business as Weaver Street Market.” This is odd, because Weaver Street Market, Inc. is the official entity that does business as Weaver Street Market.

Why is this relevant? Aside from the fact that it most likely means that owners of WSM actually own nothing other than its $8 million debt. And that we can’t be a ‘community-owned grocery’ if … well … we aren’t. It’s relevant because it is the intention of ‘2022 Vision’ that the three new stores be owned, not rented.

The question that should concern owners, consumers and workers of WSM is precisely who will own these new stores. Will it be those who have advanced the capital funds, those who pay off interest with the sweat of their brow, those who are supposed democratically to control ‘common property’? Or someone else?

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Geoff Gilson's picture

WSM 2022 Vision

If you just want to read WSM's Draft '2022 Vision,' without my comments (!), go to this Link. You can read it, without paying, by simply clicking on 'Preview,' below the picture. Be patient, though. It takes a few minutes to show up. If nothing happens, feel free to contact me.