Momentive Strikers Target Hedge Fund Managers Leon Black and Stephen Schwarzman

More than 700 workers at the Momentive Performance Materials plant in Waterford, New York have been on strike for more than three months.


The new owners of the company have been slashing wages, pensions and health benefits.

Leon Black, the head of hedge fund Apollo Global Management – the majority owner of Momentive – has grown his personal wealth to $5.1 billion and bought a $50 million Manhattan mansion, Tom Cruise’s $40 million Beverly Hills estate, and a $16.5 million Miami condo to add to his 100-acre Westchester estate and his oceanfront compound in the Hamptons.

In 2012, Black paid $120 million for Edvard Munch’s famous painting “The Scream.”

Stephen Schwarzman, the head of giant private equity fund Blackstone Group – which owns a big chunk of Momentive – got even richer. His  personal fortune is estimated at over $11.1 billion, and his personal pay last year was an astounding $811 million.

The workers allege that Black and Schwarzman are ‘the guys behind the guys’ – the puppet masters loading up Momentive with unsustainable levels of debt, extracting huge management and interest payments and working the angles on tax and bankruptcy laws while demanding that their lap-dog executives hit workers with job, pay and benefit cuts.

President-elect Donald Trump has named Schwarzman as the Chair of his Strategic and Policy Forum, charged with providing advice on new jobs and economic growth, there’s a real question about whether the billionaire corporate raider that helped destroy jobs at Momentive can turn over a new leaf.

“Trump should be extremely concerned about the preservation of good jobs in New York State, just as he has been in Indiana and Michigan,” says Michael Kink of Hedge Clippers, a project of the union supported Strong Economy for All Coalition.

Hedge Clippers put out a paper last week on the Momentive strike titled Billionaires Leon Black and Stephen Schwarzman Attack Momentive and Upstate New York.

“But hurting workers and outsourcing jobs seems to come easily to the hedge fund class, and trashing companies while extracting wealth is their basic business model,” Kink says. “The Wall Street billionaires at Apollo loaded Momentive with debt, adding nearly $3 billion in new debt to the company in a single month and increasing debt service costs by over 1000 percent.”

And hedge fund managers at Apollo made a fortune from fees — an estimated $642.7 million in management fees charged to their investors and to Momentive.

“The truth is that Momentive’s crisis includes many of the worst aspects of today’s billionaire-driven inequality economy,” Kink told Corporate Crime Reporter in an interview last week.

“Targeting Schwarzman in his purported role as one of the people that is supposedly going to make the economy great again is an important part of this effort. What is happening in Waterford is exactly the kind of thing that has angered so many blue collar voters in America, in New York and around the country.”

“Some of those people voted for Trump. Some of those people voted for Bernie Sanders. Some of those people voted for Hillary Clinton and other candidates. But all of those people are angry at a situation where billionaires on Park Avenue and Wall Street are getting richer and richer and workers in the industrial areas of New York, Ohio, Pennsylvania, Wisconsin and Michigan have seen their pay and benefits go backward and their jobs have been shipped overseas.”

“Steven Schwarzman and Leon Black are poster children for what is wrong with the American economy. We will be challenging Schwarzman and Trump  to stand up for working class and middle class jobs in upstate New York. We will be challenging Leon Black, Apollo, Schwarzman and Blackstone in a corporate campaign on whether they are reasonable stewards of the pension funds of working people.”

“Schwarzman held a luxurious party for his 60th birthday party, Donald and Melania Trump were among the guests. The $3 million dollar affair treated guests to performances by Rod Stewart and Patti LaBelle and a large portrait of Schwarzman, which usually hangs in his living room, was on display.”

He’s worth $11 billion. He has a Park Avenue mansion. He has estates in Saint Tropez.

Is the campaign going to confront these hedge fund billionaires at their homes?

“We have done that before,” Kink said. “We will be on Park Avenue and Fifth Avenue visiting Stephen Schwarzman and Leon Black. I suspect we’ll have a lot of striking Momentive workers with us in the days to come.”

Is the entire workforce on strike?

“Yes. They went out. The workers are unified. The workers are out in force. The company is trying to run the plant with scab labor. And we have seen in recent weeks a significant increase in industrial accidents and chemical spills. The company was cited by the New York State Department of Environmental Conservation to be on alert as a result of these increased number of chemical spills. There was a front page story in the Albany Times Union. The company is trying to run the plant without the skilled labor that is out on strike. And that’s a very dangerous situation. If you could see from the record Blackstone, Apollo — they have been in circumstances where they have taken skilled workforces out, whether it be job cutbacks or austerity, where they have diminished safety in industrial enterprises. They have been cited previously.”

[For the complete q/a format transcript of the Interview with Michael Kink, 31 Corporate Crime Reporter 7(13), February 6, 2017, print edition only.]

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