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The M&A Gift That Keeps On Giving: Mass Layoffs Coming To A Tim Hortons Near You
There are three things that are certain: death, taxes and M&A "synergies." And while the recent debt and record stock price-funded M&A bubble has been a present from god, or rather the Fed, to the activist shareholders and owners of target stocks (and acquirors, because in the New Normal M&A announcements somehow boost the price of both), it has been a scourge for everyone else: namely the employees of companies that undergo M&A as the first and foremost place where EPS "synergies" are extracted is by eliminating duplicative headcount, read mass layoffs. This is precisely what workers at Canada's Tim Hortons are about to find out first hand, because as Financial Post reports, citing a study from the Canadian Centre for Policy Alternatives, "widespread layoffs and strict cost cutting measures could befall Tim Hortons if Burger King’s parent company takes over the chain." Small correction replace "could" with "definitely will" and the sentence will be spot on.
The left-leaning think-tank released a scathing review of 3G Capital’s past takeovers on Thursday and concluded that the Brazilian private equity firm’s track record is predictive of “overwhelmingly negative consequences for Canadians” and the Tim Hortons restaurant chain.
“Without additional strong assurances from 3G Capital that no jobs will be lost … this may not be in the net benefit of Canada,” said CCPA senior economist David Macdonald, who was involved in the preparation of the report.
Well, maybe not Canada. But it certainly will be in the net benefit of Canada's billionaires, and they are the only ones who matter.
The policy centre said 3G Capital hasn’t made a suitable case for how the merged company benefits Canadians and it’s urging the federal government to demand “a better deal” before it approves the transaction.
Included in its analysis is the assumption that the investment company, in its US$11-billion takeover of the Canadian company, would follow a similar playbook to past takeovers.
The report suggests 3G Capital’s debt financing could force Tim Hortons to layoff more than 700 employees — or 44% of staff working outside its restaurants — as its tries to manage the debt of the merged company.
The new obligations could pressure Tim Hortons to cut costs, reduce investments and squeeze more from its franchisees, the report said.
So much negativity: maybe in its attempt to be fair and balanced the Financial Post should at least mention the huge positive - consider the billions in stock buybacks that these mass layoffs will permit? After all, now that the Fed is taking a hiatus from the monetization business, someone has to make sure that risk is, for the 6th year in a row, not a concern to the world 0.01%. Because how else will wealth trickle down?
And failing that, will someone please think of the billionaire children?
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Have it your way?
double, double. trouble
Straight form Baphometh's anus to your table
Hold the pickles, hold the lettuce - special orders don't upset us (But US taxes do!)
y mid cap company I work for just laid off 300 or so out of the tech industry. More to come in this robust economy!
Tango Hotel hell
So sad. Canada didn't have much left except the Calgary Stampede, and that thingy they do on ice where fights break out.
Curling, is it?
As a Canadian who loves Tim's since his childhood - they fucked up by merging with BurgerKing.
.
And i lived close by and hung out at the very first store on Ottawa Street in the Hammer. My Dad took me their for timbits every Sunday as a kid and he was one of the OG patrons of Tim Hortons. I need to write my story to Ron Joyce.
Tim Horton's merging with Berber King? This is like merging with cancer.
Maybe Tim Horton's can hire Tim Cook and all men buying donuts can get a hole too. Tim Cook might like that.
out of respect...
http://en.wikipedia.org/wiki/Tim_Horton
If you like your way you can have it your way
Not for nothing, but the impact will be felt probably as much in the Phillipines as it will in canada.
Burger King is CRAP. Their hamburgers are totally garbage, and they wonder why they are struggling financially. So they buy Tim Hortons and obvioulsy like a 800 lb Tick they'll suck the life out of Tim Hortons.
Since all we have to our identity in Canada is Hockey Night and Tim Hortons we won't have much left.
I don't know, any place that puts mayonnaise on thier egg breakfast sandwiches deserves to go out of business.
Any employee that follows orders to put mayonnaise on their egg breakfast sandwiches deserves to tbe fired.
No mayonnaise. I am sure the min wage employee can find a subisitute for that. Just give him three minutes and a vintage Penthouse.
Obviously you have never enjoyed Tylers cream of mushroom soup.
warren.......Warren?..........WARREN!
Ebola vaccine trials to start in Switzerland this week - Yahoo News
"Ebola vaccine trials to start in Switzerland this week - Yahoo News"
That'll teach 'em for wanting a gold referendum
Layoffs are always a good thing, If they can get rid of all the employees, just imagine how great their margins would be.
Tim Horton's should become a goddamned automat. Also, I piss darker than what they serve as coffee. Add some good Joe and they might have a successful business model.
Tim Horton's, Dunkin Donuts et al generally cater to people going to work like workmen and office workers.
No one has a job so nobody needs coffee and donuts.
Soon to be classified as discouraged, not unemployed.
"free to spend time with their families"
while picking through the dumpster
quality time
So if interest rates go up, then the value of all of those companies purchased with cheap money go down?
It's some kind of formula, right?
lol
It was my first job, and I made a lowly $3.45 per hour there, but the best-run foodservice business I've ever seen was a Burger King. They know their shit.
I'd like to see them bring back The King just so he could hand out pink slips.
No bro. Chick Fil A is the best run. They hire kids from the local Baptist church. The kids are beyond cheerful and competent. The managers all have a shot at getting their own store which the company gives to them like 50/50. They focus on the food being good not the ""process."
McDonald's has the operations research, MBA, bullshit "processes" down but they serve pink slime, wood filler, silicon (chicken nuggets). Also McD's is like an urban gang initiation when you go there. Filled with Obola voters and illegals.
Also Berber King's fries use some really shitty horrible oil that McD's also uses.
I'll second Chick-Fil-A as being the best run fast food restaurant. It's the only fast food place I will eat at too as you actually get real chicken breast meat with no combs and feet parts glued together to form something that kind of looks like a chicken part. Also, it's the only place where I will not turn around and leave if it's crowded. It's crazy to see how quickly they can serve freshly cooked food at rush hour.
They put every other fast food joint around my town to shame. Other fast food restaurants need to emulate them. Offer your customer a quality product along with great service, and they WILL come.
I raise you Popeyes.
I'll take Popeyes too. They rock. The best one in town is next to the projects where the kitchen is staffed by old Black ladies who know how to cook.
I noticed the chicken delivery trucks for Popeyes come from our nearest local chicken farm operation and not China.
In N Out.
Wish we had Chick fil-A on the west coast.
Hmm, seems as though I've struck upon something.
Regional is better than national is better than multinational.
Burger King is owned by Warren Buffet and 3G Capital, of Brazil.
That, on its own, is enough for me to never spend a dime there ever again.
I shit on any operation that whimsically names itself, to dress up the garbage-truck-load of dead birds it serves every 9 hours.*
Burger King oils in the 80s would eat through the soles of a black Reebok ultra ($80 which was fucking expensive) in six months.
The fry goo BKs use now is much less corrosive, and less likely to kill an employee when it enters the air. It also makes fries taste like sawdust a mouse peed on, that got trapped in the waffle of your boot, that you decided to cook for quote 'the sheer fuck of it' while camping in Rocky Mountain National Park.
*Information gleaned from Distron, a Chik Fil A supplier competitor
So, why doesn't Canada pass a law that M&A cannot be done with debt? That would put an end to predatory "capitalism" in an instant.
The Rothschild banksters won't let them.
An American, not US subject.
Canadian firms are severely under-debt-leveraged compared to their US counterparts. This would be highly counterproductive.
Because Tim Horton's didn't suck enough.
QE buys bad debt, funds M&A, and the money from mass layoffs flows towards the bottom line then falls like little snowflakes into management salaries and huge stock owners. Jeez I love capitalism
You can be sure that 3G Capital will do what they do best - fire everyone, cut every last penny in expenses.
not sure you are board room material
that is only half the equation
the other half is to take on massive amount of debt for buyback/dividend to owners
If BK takes over, in addition to layoffs, expect filthy restaurants, surly service, and crappy food and drink.
An American, not US subject.
Would you mind reposting your "R's" for fighting the corruption/opting out again?
No problem:
Notice that violence is NOT first, but only something to prepare for, as we can expect the DC US and their bankster masters to respond with, or threaten, violence like at the Bundy ranch.
The American people's first and foremost weapon against the DC US ponzi-empire is to just Quit paying, obeying and playing. The whole house of cards, the ponzi-empire, would collapse in a heartbeat.
Think of the Soviet Union and East Germany, they were empires propped up on labor, slavery, not on debt slavery as the DC US is. The people responded by fleeing, which put the underlying empires at risk. So the Soviet Union and East Germany had to erect walls and fences to keep the people, and their labor, the base of their empire, in.
The American people do not even have to flee, we only have to withdraw our backs from paying on their stolen loan-money and withdraw our consent to the criminal DC US government. Like opening a door during a hurricane at a house of cards festival, the whole edifice will blow away.
An American, not US subject.
The idea of taking on more cheap debt so you will have to fire employees is a basic Harvard Soviet principle of balance sheet optimization.
Folks are starting to realize that communism and fascism kinda go hand in hand.
Synergies!!!!
Like Citigroup? The entity THEY repealed Glass - Steagall for?
Like Time Warner AOL?
Fucking Assholes
I hate to sound like a dim bulb, but what is M&A?
I know what T&A is though....
Mergers & Aquisitions.
Thanks Q D
LEAVE TIM HORTONS ALONE, MFERS!
How can something be "in the net benefit of Canada" anyway? "Canada" is a political jurisdiction consisting of 35 million INDIVIDUALS.
Some thoughts." eliminating duplicative headcount, read mass layoffs." From my first hand and second hand knowledge of the US Postal Service, this above quote should be applied to their management structure. It used to carry a supervisor to worker ratio twice the average of private industry. I am sure it is worse than that now, probably much worse.
In the early 90's Private Equity came to town and bought one of America's most profitable short haul railroads, a private firm since the 1880's and profitable since founding. Hauling Iron Ore from Mines to our port shipping facilities, which they also owned. Profits were massive, wages were high, and all was well. Naturally, Private Equity saw all this money and figured out how to strip mine it. So they purchased it, and then stripped it to the bare bones, to where the trains barely ran. Pensions were looted to the degree the union could be beaten back. Wages stopped keeping up with inflation. Employees were fired in some numbers and replaced by contract workers for each new job needing doing. Just as the railroad was about to implode due to maintenance not done for a decade, the Private Equity sold off to a real Rail Road, who bought it up and restored it to profit and secured the upkeep for future profitability. The experience was one of Private Equity taking a great money maker and stripping it naked, just before collapse, they sell out taking all the money and run. Leaving s new firm to pick up the pieces. NOW, the ONLY reason it found a buyer was because the new Rail Road saw ahead, that investment in capital improvments would ensure that old big profitability for decades to come.
Private Equity = short term asset stripping and collapse
Real corporate business = capital investment, improved operations and long term profitablity.
Which is real capitalism? Which is financialized capital stripping.
Any company that ruins the almighty Donut does not deserve to survive. The worst breakfast treats in the business.
Maybe they can now hire a decent baker.
Tim Hortons hasn't "baked" anything in their own "restaurants" for over a decade now. Their-so called "always fresh" program involves trucking everything pre-made from, I believe, a factory in Brampton, to "restaurants" across Canada. The result is a disgusting facsimile of a donut. Their coffee is, at best, mediocre. Can't possibly see how Burger King would even be able to ruin it any more than existing and previous management already has.
A friend of mine visited their headquarters as an external supplier and their secretary had a conniption that they brought a cup of Starbucks-branded coffee with them to a meeting. Made her pour it into a Tim Hortons cup. Talk about a cult!
The wrath of unintended consequences .
"Sheeple wear Wolfskin !"
This business model is dead , and half-buried .
See
https://www.academia.edu/9031355/The_Were-Sheeples_Almanac
http://andreswhy.blogspot.com/2014/10/were-sheeples-almanac.html
Double Double; King size trouble...
Ebola vaccines in switzerland? Wouldn't it make more sense to send them to..... Liberia?
These companies will grow themselves out of existence. They depend on a spending customer base, bookkeeping tricks can only hold off the inevitable in a shrinking market.
Their growth, and the attendant job cuts, only exacerbates the customer base problem. They will not survive. By merging to try to get "one louder" they will make themselves too large for a deflating economy to support.
They have already begun to cannibalize themselves...it won't be that much longer now...
being a bit of a coffee freak, i am sure that i read some time ago that tim hortons was the coffee supplier for mcdonalds
Maybe they should go back to selling decent coffee? Or an edible bagel?
Revolutionary.