A Vast Corporate Conspiracy
Why should anyone who is not a California state employee care about its pension program, CalPERS, or the fate of its president, Sean Harrigan? Simple. With an investment pot of $177 billion and an activist attitude by its president, CalPERS likes to affect the way business does business.
This can be a good thing. For example, CalPERS has tried (not altogether successfully) to encourage more affordable housing in housing-starved California.
But it can also be a bad thing, as when its activist board tries to use CalPERS' clout to force corporations to do things that just don't make business sense. Worse, they continue to put activism above return, and whistle as their invest-if-you-reform policies fail to perform for the employees they are investing for. And worse, when confronted with investment failure, they blame corporate activism instead of their own union activism.
Harrigan is an exec with the United Food and Commercial Workers Union, and he's pushed his pro-union, anti-management agenda agressively. One of his targets is Safeway. Imagine a union boss of a grocery union using his clout to bully one of the largest employers of his rank and file.
Perhaps he and the other activist board members could get away with it if CalPERS were doing well, but as the Wall Street Journal reported last May, CalPERS assets have dropped $27 billion from 1999 to mid-2003. Its investments have trailed its peers by a full percentage point on average in 2001 and 2002. The Journal concluded, "A cynic, or even a taxpayer, might wonder that the real motive behind the current CalPERS campaign against corporate America is to draw attention away from its own underperformance."
It's catching up with Harriman, as rumors are swirling that he will not retain his board position. His response? Blame Safeway and other corporate giants, a vast corporate conspiracy. The LA Times likes that angle enough to put it on the top of Page One -- and its "coverage" of the story manages to completely ignore the poor performance of CalPERs investments. (here)
This can be a good thing. For example, CalPERS has tried (not altogether successfully) to encourage more affordable housing in housing-starved California.
But it can also be a bad thing, as when its activist board tries to use CalPERS' clout to force corporations to do things that just don't make business sense. Worse, they continue to put activism above return, and whistle as their invest-if-you-reform policies fail to perform for the employees they are investing for. And worse, when confronted with investment failure, they blame corporate activism instead of their own union activism.
Harrigan is an exec with the United Food and Commercial Workers Union, and he's pushed his pro-union, anti-management agenda agressively. One of his targets is Safeway. Imagine a union boss of a grocery union using his clout to bully one of the largest employers of his rank and file.
Perhaps he and the other activist board members could get away with it if CalPERS were doing well, but as the Wall Street Journal reported last May, CalPERS assets have dropped $27 billion from 1999 to mid-2003. Its investments have trailed its peers by a full percentage point on average in 2001 and 2002. The Journal concluded, "A cynic, or even a taxpayer, might wonder that the real motive behind the current CalPERS campaign against corporate America is to draw attention away from its own underperformance."
It's catching up with Harriman, as rumors are swirling that he will not retain his board position. His response? Blame Safeway and other corporate giants, a vast corporate conspiracy. The LA Times likes that angle enough to put it on the top of Page One -- and its "coverage" of the story manages to completely ignore the poor performance of CalPERs investments. (here)
posted by Laer at 6:23 AM
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