Saturday, December 13, 2008

Carlyle Group Uses European Study to Promote U.S. Private Equity

The Carlyle Group posted results of a study on employee treatment under private equity ownership. Only they didn't interview employees. They sampled 190 human resource professionals and company executives. The results?

Number of companies with a unionised workforce is static post-buyout at 71%. No surprise, given their relatively short term ownership position and goal of flipping for large profits. How did union leaders feel about PEU ownership? Oh, they weren't interviewed.

Real earnings of non-managerial employees increased in just over half (51%) of cases. A large minority of 47% experienced no change. How does this vary by union membership?

Availability of occupational pension schemes increased from 76% of companies before a buyout to 81% afterwards. Are non pension retirement options included, i.e. the European version of 401(k)'s?

Amount spent on non-managerial employee training increased post-buyout in 45% of cases, and fell for just 3%.

Employee commitment best practice increases, with regular team briefings up from 71% to 90% of cases. Briefings are good, but what's the impact on product or service quality? Boeing cited Carlyle's Vought Aircraft for numerous delays in its 787 Dreamliner program.

The proportion of private equity-backed companies that had a consultative committee in place increased from precisely half before the buyout to 63% afterwards. And the impact of such committees on pay, benefits, safety, workplace conditions?

Carlyle Capital Corporation failed. So did Blue Wave Partners and SemGroup declared bankruptcy, as did Hawaiian Telecom. How many of those made the sample? They didn't.

The study involved European private equity owned companies. It was conducted prior to the global financial implosion.

How do 100 Carlyle Group nonunion employees feel about their layoff? How will politically connected Carlyle spin this study, as they look to pick up broken banks for a song? The survey doesn't say. Might Carlyle? Stay tuned...