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  • 27
    Dec
    2012
    11:18am, EST

    After buyout, union workers get a lesson in modern economics

    Jeremiah Patterson / Investigative Reporting Workshop

    The Momentive Performance Materials plant near Albany, N.Y.

    By Kat Aaron
    Investigative Reporting Workshop

    Editors' note: This story has been updated to clarify Apollo CEO Leon Black's stock holdings. The company had declined to comment for this story before publication.

    When Apollo Global Management bought Momentive Performance Materials, a chemical factory in upstate New York, in 2006, it administered a lesson in modern-day economics at what had long been one of the biggest and most stable employers in the Albany area.

    Private equity companies like Apollo make money through debt. In a leveraged buyout, a firm hones in on a company, often one that is publicly traded, and struggling, and takes it private. The acquisition is financed by borrowing against the company itself. The goal is to take the company public again, ideally in three to five years, and net a profit for the investors and the firm. The debt remains with the company.

    The debt load can translate to major belt-tightening at the acquired company. The buyer is looking to increase productivity, reduce inefficiencies and, as jargon would have it, create synergies. That often means a private equity firm will buy up a few companies in a particular industry, mash them together and eliminate the overlap. That often means eliminating jobs.


    Whether private equity firms, on average, create or destroy jobs is a matter of debate. Buyouts by private equity firms have a generally positive effect on the financial performance of the acquired companies but are “associated with lower employment growth,” according to a 2008 report by the Government Accountability Office. A more-recent academic paper found that post-buyout, companies see increases in both layoffs and jobs created. On balance, the authors write, there is a 1 percent net loss of jobs when a company is taken over by a private equity firm.

    But the loss of jobs is often not the only toll for workers caught in the middle of a leveraged buyout, as Momentive workers learned soon after Apollo purchased their company from General Electric. (GE is a part owner of NBCUniversal.) 

    Apollo cut the wages for most of the production and maintenance workers at its Waterford plant. The National Labor Relations Board investigated and tentatively concluded that the company had violated the contract. But with other locals rallying behind a new contract offer, hundreds of the production workers were forced to accept drastically reduced pay.

    In the months after the contract vote, the stress level at the plant was through the roof, said one worker, who, like his colleagues, spoke on condition of anonymity because he feared retaliation from company officials. His doctor treats lots of Momentive workers, he said, “and she says Xanax should be in our drinking water.”

    The anxiety “was affecting my stomach,” another worker said. “I can’t eat. I’m drinking more than I’ve ever drank in my whole life.”

    Since the wage cuts, workers said, attracting qualified hires has been difficult. The new contract, they said, has brought more responsibility for less pay. They alleged that new hires are asked to perform dangerous tasks with inadequate training. And longtime workers are taking second jobs to make up for lost pay, several men said.

    “There’s a guy near me who has a part-time job at Wal-Mart,” one man said, adding that in his unit people work seven afternoons in a row, with one day off, then seven straight days of midnight shifts.

    “He often says he’s only got three hours of sleep” before returning to work, he said.

    “This is suicidal,” another man said.

    Momentive, in a written statement, says it “seeks to attract a world-class workforce through competitive compensation and benefits, while providing a safe work environment.” The company also notes that since 2006, when Apollo took over, the Waterford site has shown improvement on two of OSHA's key measures of worker safety. 

    Still, the union has raised safety concerns. For years, the Waterford plant was part of a special program at the Occupational Safety and Health Administration that honors workplaces with exemplary safety and health records and procedures. Waterford was a VPP Star site, the highest rank within the Voluntary Protection Program. The benefits of the VPP star aren’t just a nice flag to fly in front of the factory. Once in the program, the site is exempt from random checks by OSHA inspectors.

    In late 2010, the union withdrew its support for the VPP program in Waterford, which is required for the certification. Such a loss of union support is rare, according to OSHA. In January 2011, the plant lost its VPP status.

    That withdrawal from the program was a long time coming. In November 2008, the membership of Local 81359 had sent a letter to Momentive’s management, saying the company’s “actions and tactics have created this hostile work environment and we fear for the health and safety” of the plant workers.

    After that warning, OSHA inspectors found eight serious violations at the plant over several months in 2010, each resulting in a $4,500 fine.

    One of the violations involved “an uncontrolled release of sulfuric acid,” exposing employees to “inhalation and burn hazards.” Momentive did not furnish employment “free from recognized hazards that were causing or likely to cause death or serious physical harm,” according to the violation notice. (Four of the violations were later “deleted” by the agency during discussions with the company of fines and penalties.)

    “The night of the sulfuric acid release there were some young new guys there, and a guy who had been there for a long time,” said Dominick Patrignani, a union official. “He kept people from getting burned. We would have been reading about it in the obit section, possibly.”

    “The knowledge base of the people they’re bringing in is nothing like we’ve ever seen before, because you can’t get highly skilled workers at $14 and $15 an hour.”

    On May 25, 2011, two workers on the night shift were severely burned in a flash fire at the plant. In the early morning, the men were preparing to clean some equipment, according to one worker with knowledge of the incident. But when they started to take apart a piece of pipe, gas somehow ignited. The men were severely burned and were airlifted to the Burn Center at nearby Westchester Medical Center. Both survived, but now face a long recovery.

    “This whole event could have been prevented,” Patrignani said, adding that he had raised safety concerns about that area of the plant to the operations manager the week before the accident.

    In November 2011, an OSHA investigation of the May accident resulted in $81,000 in additional fines for Momentive, for 10 serious violations and one repeat violation. The company is appealing the fines and OSHA has yet to issue a final determination.

    ----

    For Momentive’s Waterford workers, the wage changes are a done deal. A group of workers filed additional complaints with the National Labor Relations Board, but those went nowhere. Some organized a vote to decertify the union — essentially, to fire the union as their representatives — but that failed.

    They have received their settlement checks, and most are resigned to the drastically lower pay, new responsibilities and the tension. But resignation doesn’t mean the living is easy.

    I met with one Momentive worker, his fiancée and their young daughter at a Dunkin’ Donuts off Route 9. When I mentioned that someone told me I should talk to the wives if I want to get the real picture of the pay cuts and their impact, she nodded. “We almost lost him, you know,” she said. “He had a heart attack from the stress.” He was now seeing a therapist and a psychiatrist, and was taking multiple anti-anxiety drugs, she said.

    Over coffee and a box of doughnut holes, the couple laid out what they’ve been through since the pay cuts took $400 a week out of his paycheck.

    First they got jammed up on bills and they cut down to one car, a hardship in an area where you can’t hail a cab or catch a bus, and you can’t get a gallon of milk without driving to a store.

    The man had to ask a friend for a ride to work. “It was hard to do that,” he said quietly. “I’m not used to asking for help.”

    Since then, they’ve scaled back a lot.

    “We’re OK with that,” his fiancée was quick to say. She doesn’t get her hair done any more, or her nails, things they took for granted before. They don’t go on vacation, or to the movies. But the furnace is on its last legs, she said, and they don’t know how they would pay for repairs if it conks out.

    And it’s not just the little things. When his wages were cut, they fell behind on their mortgage, and the bank wasn’t willing to lower their rate, now at 8.5 percent. They couldn’t refinance with another lender, because their credit was bad. “Of course it was bad,” she said. “We lost a huge chunk of our income.”

    When they couldn’t refinance, and couldn’t get a loan modification, they said they got tangled up with a foreclosure rescue scam, which took cash up front and advised them to fall further behind on their loan. Efforts to work with government programs didn’t pan out. Now they’ve declared bankruptcy and the house is in foreclosure.

    “It’s all I’ve ever wanted, to work. To provide for my family. I didn’t want El Dorados and Rolexes,” the Momentive worker said, worrying the sleeves of his brown work jacket.

    --------

    As the workers and their families settle in to their new reality, more changes may lie ahead. Momentive continues to “pursue various cost reduction initiatives” across its sites, including “sourcing through low-cost countries, overtime reduction and other labor efficiency,” according to its 2010 annual report. Whether that means moving more production to China, where the company expects to “generate future growth,” remains to be seen.  Momentive said in its written statement that “Waterford continues to be an important facility” in the company's “North American network.”

    The company has also been making moves in the United States, merging Momentive with competitor Hexion in late 2010.

    Then, in April 2011, Momentive filed the paperwork for an $862 million initial public offering that  would have brought the company out of Apollo’s hands and return it to public trading. But the company is, as its 2011 annual report notes, still a “highly leveraged company,” owing $2.9 billion at the end of the year. By June 2012, that figure had grown to nearly $4 billion. In August, Standard & Poor’s downgraded Momentive’s debt from B- to CCC. A month later, Momentive withdrew the IPO filing.

    Read part 1: A buyout, a reorganization and the new face of job security

     While Momentive may not go public, its owner, Apollo Global Management, did. Following in the footsteps of industry giant Blackstone, Apollo launched an IPO in March 2011. At the time of the IPO, Apollo CEO Leon Black held more than 90 million shares, according to the company's prospectus, worth almost $1.8 billion when the IPO launched. A company spokeswoman, Melissa Mandel Kvitko, said none of Apollo’s management, employees, affiliates, or strategic investors sold shares in this offering.

    As for Momentive workers, they still take home a nice paycheck. They know that. They work hard at their union jobs, and they get paid enough to support themselves and their families, maybe save enough to survive into old age. But something besides the pay has changed.

    “I don’t like what’s happening. I don’t think it’s right. I don’t think it’s fair. But at the same time, I still have mixed feelings. I’m probably paid better than 90 percent of people,” one man said. It’s the principle, he said: It’s as if he had $10 in his pocket, and Apollo came along and took $2. He still has eight bucks, but that doesn’t make it right. And while he makes more than most people, he said, being able to retire comfortably after decades of work is what’s supposed to happen. It’s not an outrageous luxury, nor should it be.

    Now, though, the canceled IPO and the debt load have him wondering about the plant’s future, and the future for young workers at Momentive. “I realize they’re a good employer, and they provide a lot of good jobs,” he said. “I don’t want to see them fail.”

    He goes to work every day, he said, and does the best he can. But the contract fight has changed his relationship with a job he once loved. “It’s like being betrayed by a spouse,” he said. “It’s awful hard to go back. It’s never going to be the same for me.”

    The Investigative Reporting Workshop at American University, is a nonprofit, professional newsroom that pairs experienced professional reporters and editors with graduate students, and co-publishes with mainstream media partners and nonprofit newsrooms.

    More from Open Channel:

    • A buyout, a reorganization and the new face of job security
    • Critical EPA report highlighting chemical dangers to kids is sidetracked
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    • Kitchen calamity: Reports of shattering cookware are on the rise
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                 Follow Open Channel from NBCNews.com on Twitter and Facebook


    109 comments

    Let the idiots chime in on ...How LUCKY they are to have a job, etc..etc..etc...

    Show more
    Explore related topics: jobs, union, manufacturing, featured, momentive
  • 26
    Dec
    2012
    5:33am, EST

    A buyout, a reorganization and the new face of job security

    The Momentive Performance Materials plant near Albany, N.Y.,

    By Kat Aaron
    Investigative Reporting Workshop

    WATERFORD, N.Y. -- Momentive Performance Materials sprawls near the banks of the Hudson River, just outside Albany, N.Y., its silver silos and windowless sheds nestled in the low, rolling hills. Men who work there see deer on the road as they drive their pickups to work.

    Inside the plant, the tranquility vanishes. It’s not just that the workers are handling toxic, explosive chemicals. That’s par for the course in silicone manufacturing. Many Momentive employees have been at the company for decades, back when it was part of General Electric. They accept the risks in exchange for a steady, sizable paycheck.

    The problem is that the paycheck is neither as steady nor sizable as it used to be.


    Apollo Global Management, a private equity firm, bought the former GE Advanced Material (Silicones & Quartz) in 2006 and renamed it Momentive. Two years later, in the middle of a three-year contract, Apollo slashed the wages of some 450 union workers by up to 40 percent. Suddenly, workers found themselves being paid what they had made 10 or 20 years earlier.(GE is a part owner of NBCUniversal, the parent company of NBC News.)

    The Momentive workers were standing still, but the world was changing around them. A contract isn’t what it used to be. The men — and they are mostly men — at Momentive have what millions of unemployed Americans covet: a job. And not just any job, but a union job in manufacturing, the kind of job likely to get increasingly rare as right to work laws spread. But that job pays less than it did a decade ago, and many Momentive employees say they’re slipping backward. Some are losing their homes. This is job security in 2012, the new face of stability in the American workplace.

    ----------

    Momentive produces silicones for dozens of familiar brand names. Its customers include Goodyear, Motorola, L’Oreal and The Home Depot. Its silicones are in caulks, gaskets, carpets and bedding. They’re the conditioning ingredient in “2-in-1” shampoo. When Neil Armstrong took his one giant leap, the sole of his moon boot was made of silicone rubber produced at the Waterford plant.

    Workers used to make 700,000 pounds of silicone gum every week at the factory, according to one longtime Momentive worker, who like many others interviewed for this story spoke on condition of anonymity, fearing retribution from the company. Now, he says they make less than 200,000 pounds.

    It’s not clear if the overall production has declined or been shifted elsewhere. In addition to its factory in New York, Momentive has factories in Ohio and West Virginia, Japan, Germany and Italy. A finishing plant started up in Chennai, India, in 2010, as did a joint venture in Jiande, China. Another Chinese plant is slated for completion in 2013.

    Momentive declined to share production information, but in a statement it said, “Waterford continues to be an important facility in our North American network and we have recently consolidated our Silicones and Quartz divisional headquarters at this site. It is also critical that we continue to strengthen our global footprint, which will allow us to meet the needs of our geographically diverse customer base.”

    ----------

    When GE spun off its silicones plant six years ago, the Waterford workers were apprehensive. They had a pretty good thing going, and most weren’t excited about a change. Back then, it wasn’t uncommon for a Momentive worker to take home $100,000 a year – serious money for seriously skilled labor. “I make more than some husbands and wives combined,” one man told me. But, he said, “It’s not a perfume factory down there.” The plant operates 24 hours a day, 7 days a week, 365 days a year. The men say they regularly worked 60- to 70-hour weeks, including overtime. Schedules of seven days on, one day off, seven days on again were common, they say.

    As the union negotiated its first contract with Apollo, it was bracing for major cuts, said Dominick Patrignani, president of IUE-CWA Local 81359, part of the Communications Workers of America, which represents workers at the Waterford plant. Apollo’s $3.8 billion acquisition of the company, completed in December 2006, was financed with more than $3 billion in debt, and workers figured the company would be tightening the belt.

    To their surprise, the agreement reached was nearly identical to the previous contract under GE. The three-year contract, which covered two locals at the Waterford plant and workers at a Momentive facility in Ohio, was signed in October 2007. A company newsletter praised it, saying it “locks in gains in pay and pensions” and “retains key job security provisions.”

    That didn’t last.

    In December 2008, days before Christmas, more than 400 hourly workers at Momentive’s Waterford plant were called in to speak with their supervisors. One by one, workers were told that their pay would be cut, workers say. They would be assigned to new jobs, with new duties and wages.

    In its written statement, Momentive said it has had to make “difficult decisions regarding our operations in a challenging economic environment to remain competitive on a local and global basis.”

    Workers were told that the pay cuts sought to bring their wages in line with the prevailing wage in the region, they said. But as several noted, others in Saratoga County don’t work with toxic and dangerous materials. Their wages should be compared to those of workers in the chemical sector, they said.

    Those new wages also varied wildly, according to documents obtained through a Freedom of Information request to the National Labor Relations Board. One man, a 35-year veteran of the plant, dropped from $29.11 an hour to $17. Another, closing in on 20 years at the company, dropped from $29.11 to $19.50. A man with two years on the job kept his $29.11 wage rate. The longest-tenured worker, with more than 39 years of experience, went from $29.11 to $24. A plant services operator, hired in 1978, found himself earning $14 an hour — a cut of almost $12 from his previous wage.

    “Guys with a year or two of service ended up with a higher rate than I did,” said one longtime worker who has two children in college. Before the cuts, he earned $27.31 an hour His new hourly wage was $19.50.

    The wage cuts were like “an attack on my family,” another Momentive employee said. He has two children, too, and he regularly worked 70-hour weeks to “give them a good opportunity to go to a good school, get a good education, without going into debt.”

    If the company had proposed a 5 to 10 percent pay cut for all workers, including management and technicians, that would have been easier to swallow, several men told me. “It was the arbitrariness that really pissed everyone off,” one said.

    In fact, Momentive executives did take a 10 percent pay cut, in April 2009. But in January 2010, just as the workers’ pay cuts took effect, the executives’ “temporary pay reduction” was reversed, “as a result of the recovery in our business,” according to the company’s 2010 annual report.

    As the Momentive workers saw it, the abrupt wage changes violated the contract signed in 2007, less than 18 months before the pay cuts were imposed. The local representing the affected workers filed 477 separate complaints with the National Labor Relations Board in January 2009, one for each affected worker. They asserted that Momentive “has been engaging in unfair labor practices,” by changing wages, promotion, how people got overtime — all things spelled out in the original contract.

    The company argued asserted that negotiating wage and rate changes at the local plant level was allowed, under the terms of the national agreement. The company said the changes were needed to stay competitive and bring wages in line with the skills required. 

    More than a year later, following months of investigation, the NLRB responded. The board’s regional director found that Momentive had indeed “failed to continue in effect all the terms and conditions of the National Agreement.”  In other words, it had broken the contract. The order also found that Momentive had failed to bargain collectively with the union in violation of the law. 

    The board sought an order requiring the company to restore the wage scale, rate, progression, job descriptions, and several other points. The board also wanted the company to pay interest on any back pay or other monetary awards.

    The NLRB scheduled a hearing for April 5, 2010. That hearing got pushed to June, in hopes that the union and the company would reach a settlement, a common move in such cases.

    But June 2010 was also when the original three-year contract — the one Momentive had broken with the wage cuts — was slated to expire. When Momentive executives proposed a deal, the union found itself negotiating a settlement and a new contract at the same time.

    The proposed settlement was simple: the 400-plus workers whose wages were cut would get back pay covering their lost earnings. Going forward, though, they’d all be getting the new, lower wage, in their newly defined positions. The company agreed to a $2 an hour bump — on the reduced pay. The NLRB case would be closed, ending any negotiation over job descriptions or the other issues in dispute.

    Workers said the company dangled the settlement payments at the vote on the contract, held in the company firehouse at the Waterford plant. “They had a box of envelopes, and the envelopes had statements in them with a number, how much money each worker would get in back pay, under the settlement,” one recalled.

    They also warned that “if you keep going with the NLRB action, it could take years,” several employees said.

    By the time of the settlement proposal, which called for payments of more than $10,000 for many of the workers and more than $30,000 for some, many whose wages had been cut were struggling. “They were just so desperate,” one said. “They were just in a hole,” another added.

    Still, workers in Local 81359 say they voted down the contract, preferring to move forward with the NLRB action.

    But they weren’t the only local voting. The contract covers three bargaining units, including another local in the plant, representing salaried and technical workers, and workers at an Ohio branch. Although those workers didn't have their pay cut, and weren’t covered by the settlement, they had a say in whether it would be approved or rejected, because it was tied to the contract. Those locals voted to approve the proposal, and the contract was ratified. The Local 81359 workers got back pay with interest, but the wage cuts would stand.

    Not everyone at Momentive took a pay cut.

    Steven Delarge, a Momentive executive, received a bonus of more than $400,000 in 2010, in part for his role in “the successful completion of collective bargaining agreements” with union workers, according to the company’s annual report. He also got a raise, bumping his salary from just under $400,000 to $450,000 in 2011. He has since left the company.

    Momentive CEO Jonathan Rich received a bonus of $1.3 million for the year, The bonus was based on “the achievement of applicable performance targets,” according to the company’s annual report, which stated, “The Company achieved its primary environmental objective and, although it did not achieve its safety objective, the results were improved over the prior year.” Rich, who left the company in October 2010, also received severance payments of $975,000, and an additional $350,000, the reasons for which are not spelled out in company filings. His total compensation for the year was more than $6.5 million, according to company documents.

    Andrew H. Walker / Getty Images file

    Leon Black, shown here at the Museum of Modern Art's annual party in New York City in 2007.

    The current executives, Craig Morrison and William Carter, are well-compensated, too. Morrison’s total compensation was nearly $3.5 million in 2011, Carter’s more than $2.6 million.

    Apollo Chairman and CEO Leon Black is also doing well. Last year, he celebrated his 60th birthday with a blowout at his Hamptons home, featuring “a seared foie gras station” and a $1 million performance by Elton John, according to the New York Times. Apollo Global Management declined to comment for this article.

    Read Part 2: After buyout, workers get a lesson in modern economics.

    More from Open Channel:

    • Critical EPA report highlighting chemical dangers to kids is sidetracked
    • Despite warnings, aging firefighting aircraft still flying -- and crashing
    • Kitchen calamity: Reports of shattering cookware are on the rise
    • Authorities establish timeline of gun purchases in Conn. school shooting
    • Paula Broadwell won't face cyberstalking charges in Petraeus scandal
    • New details emerge on private lives of school gunman and his mother
    • Mom of suspected shooter, first to die, was avid gun enthusiast

                 Follow Open Channel from NBCNews.com on Twitter and Facebook 

     

    536 comments

    I am not pro union always even though I was a union member at one point. However, these workers who were obviously screwed are human beings with families not some amorphous mass. Shame on management.

    Show more
    Explore related topics: jobs, union, manufacturing, featured, momentive
  • 30
    Aug
    2012
    6:40am, EDT

    One of most dangerous cities in US plans to ditch police force

    Mel Evans / AP

    Police are seen in a downtown shopping area in Camden, N.J.

    By Andrew Mach
    Staff Writer, NBC News

    One of the most dangerous cities in the U.S. is getting rid of its police department.


    Follow @NBCNewsUS
    Follow @andrewjmach

    Amid what they call a “public safety crisis,” officials in Camden, N.J., plan to disband the city's 141-year-old police department and replace it with a non-union division of the Camden County Police.

    Camden city officials have touted the move as necessary to combat the city’s growing financial and safety problems. The entire 267-member police department will be laid off and replaced with a newly reformatted metro division, which is projected to have some 400 members. It will serve only the city of Camden starting in early 2013.

    “It’s not a money-saver, it’s living within the budget you’ve got to get more boots on the ground,” Camden County spokesperson Joyce Gabriel told NBC News. “There has been an uptick in violence this year, and the city decided to go with the county’s police department.”


    Camden isn’t the first cash-strapped city to be faced with the decision to eliminate or merge its police department.

    Bernard Melekian, director of the Justice Department’s Community Oriented Policing Services (COPS) office, told NBC News that as communities around the country recover from the recession, police mergers are part of a new reality that will likely continue through the next decade.

    San Bernardino, Calif., files for bankruptcy with over $1 billion in debts

    “This really reflects a much broader issue, which is that the economy is changing the delivery of police services profoundly,” Melekian said, “and those agencies undergoing regionalization and consolidation – in particular, smaller ones that are financially distressed – are going to have to find another way of delivering those core services.”

    'Recipe for disaster'
    Given Camden’s exceptionally high rate of violence (the city recorded this year’s 41st homicide earlier this month), city police officers in danger being laid off say the transition is risky at best.

    Stay informed with the latest headlines; sign up for our newsletter   

    “We’re concerned, we’re definitely concerned,” Camden Fraternal Order of Police President John Williamson told NBC News. “You’re going to create a police department and staff it with people who are unfamiliar with the city and say, ‘Go ahead and fight crime.’ That’s a recipe for disaster.”

    Afflicted by homelessness, drug trafficking, prostitution, robbery and violence, Camden has consistently ranked high among the top 10 most dangerous cities in the U.S. since 1998, according to Morgan Quitno Press, a research firm that compiles statistical data on cities. In 2010, Camden had the highest crime rate in the U.S., with 2,333 violent crimes per 100,000 people, more than five times the national average.

    Camden Mayor Dana Redd underscored the importance of the new, regionalized police force in her proposal for the next fiscal year’s budget.

    “The senseless acts of violence occurring in our city affect every one of us,” Redd said in a statement. “We need to assure our residents that all life matters and that we are serious about making our city safe by expanding the number of boots on the ground. This decision to move towards a Camden Metro Division is being made solely on what is right for our residents – nothing more, nothing less.”

    Baltimore officials are considering plugging budget deficits by selling advertisement space on the side of fire trucks. NBC's Gabe Gutierrez reports.

    Layoffs of the city’s police force will begin by the end of the month, according to the mayor’s office. County officials said that at most 49 percent of the city’s police officers, based on an application process, will be transferred to the new county division under the plan.

    Gabriel said the terms of contract for current officers of the city's police department, which include longevity bonuses, day-shift differentials and other costs, make it too expensive to transfer all of them to the new force, so the rest of the Metro Division will be staffed by new hires. Louis Cappelli Jr., director of the Camden County Board of Freeholders, told NBC News that more than 1,500 people from various states and police backgrounds have already applied for the county positions.

    The new division, to be fully funded by the city of Camden and the state of New Jersey, will begin field training on the streets as early as October for a period of 17 to 19 weeks.

    But no matter how long the training, Rockefeller Institute Director Thomas Gais told NBC News that consolidating into one system and increasing cost-effectiveness takes time.  

    “It’s going to be a disruption at least for a while before some kind of consolidation happens, before the reorganization begins to work as intended,” Gais said. “There’s a tradeoff generally in the responsiveness to local needs and efficiency in reallocating resources, so the question becomes whether the reorganization reduces the quality of service and whether the short-term risk is worthwhile in the long run.”

    Watch the most-viewed videos on NBCNews.com

    Gabriel said that cities within Camden County have the option to cede their municipal police force to a county department.

    Saving money
    Union officials argue that Camden's move is a way for the city to get out of collective bargaining with police. The county's new metro division officers will be non-union members.

    The police department in Camden has been under state control since 2005, when then-mayor Gwendolyn Faison called for the takeover. The agreement is set to expire at the end of the year, and New Jersey Gov. Chris Christie has thrown his support behind the transition to county control.

    “A county police force that has a reasonable contract and that’s going to provide a huge increase in the number of police officers on the streets here in Camden is a win for everybody,” Christie said at a recent event at Rutgers-Camden University. “I’m willing to put my name on the line for this concept.”

    Other state officials have backed similar initiatives.

    A 2011 report by the Major Cities Police Chiefs Association, a group representing the nation’s 63 largest police forces, found that 70 percent were consolidating some law enforcement functions to compensate for recent budget cuts.

    • Faced with mounting costs and declining revenue, the city of Midvale, Utah, was forced to merge four local police agencies with the Salt Lake County Sheriff’s Department.  
    • In Pennsylvania, the state police are increasingly taking on more patrol duties following the recent closures of municipal departments. Since 2010, at least 33 cities scattered throughout the state have closed or scaled back their agencies, according to state records.
    • Police agencies in Oakland and Detroit have raised concerns about their ability to respond to routine resident burglaries, theft, and public nuisance calls because they were stretched too thin providing support for other agencies. 

    “We’re seeing the economy do a lot of different things to the agencies, which are looking at various forms of consolidation, all of which is driven by the economy,” Melekian said, adding that he knows of at least 100 police agencies around the country undergoing some form of service consolidation.

    Cities that have made the switch from municipal to county or regional forces have reported saving millions of dollars and passing grades on the street, but Melekian said a shakeup of the current system in Camden won't eradicate crime or solve budgetary woes.

    “The consensus seems to be that this saves money, but it does not produce instantaneous savings,” Melekian said. “There are too many issues that need to be resolved, too many expenses, so at some point they’ll have to work through these inefficiencies before they get the results they want.”

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    796 comments

    “You’re going to create a police department and staff it with people who are unfamiliar with the city and say, ‘Go ahead and fight crime.’ That’s a recipe for disaster.”

    Show more
    Explore related topics: police, new-jersey, union, police-department, dangerous, camden, featured
  • 31
    Jan
    2012
    11:23pm, EST

    Video: Michael Isikoff reports on Obama campaign finances

    President Obama's campaign released a report naming big money bundlers—including Hollywood celebrities and Silicon Valley CEOs--who have raised $71 million for his reelection and the Democratic National Committee. The Obama campaign collected $140 million in 2011 and had $82 million cash on hand at year's end. National Investigative Correspondent Michael Isikoff reports.

    3 comments

    Steve Spinner (who pushed for Solyndra) was one of his contributors ......no surprise there..... That's OK , once Mitt is the nominee .......Mitts backers will poor in funds to get Obama out..... If you understand our crushing debt dilemma , then you no , Obama's got to go.... Mitt would be a 1,000  …

    Show more
    Explore related topics: spielberg, union, campaign-finance, obama, seiu, election-2012
  • 31
    Jan
    2012
    8:29pm, EST

    Spielberg, labor union are Obama backers; PAC raises less than GOP

    NBC's Investigative Correspondent Michael Isikoff takes a look at the released information on Super PAC fundraising and donors. Romney donors include Wall St. hedge fund managers and a Koch brother.

    By Bill Dedman, msnbc.com, and Michael Isikoff, NBC News
    with reporting by NBC's Azriel Relph and Lisa Riordan Seville

    Hollywood director Steven Spielberg and the Service Employees International Union were among the big donors to a Super PAC supporting President Barack Obama. Priorities USA Action filed the report Tuesday with the FEC showing $4.4 million raised to support the president's re-election.

    Spielberg chipped in $100,000, and the SEIU gave the largest amount,  $1 million.

    The total contributions to Priorities USA Action are, however,  far less than those being raised by the Super PACs for the Republican candidates and appear to put the group well behind its initial goal of raising $100 million on behalf of the president's re-election.

    But there are signs that the Obama Super PAC is being financed by a related non-profit group that is in turn raising money from secret donors. Such non-disclosing political entities were denounced in 2010 by President Obama. But in Tuesday night's filing, the pro-Obama Priorities USA Action reported that it has gotten $215,234 from its non-disclosing sister group, Priorities USA, listing the funds as reimbursements for its operating expenses. As a nonprofit, Priorities USA is not required to file any public reports with the Federal Election Commission.

    Proirities USA Action and Priorities USA, which has already begun running attack ads on Mitt Romney,  were founded last year by two former Obama White House aides -- former deputy press secretary Bill Burton and political aide Sean Sweeney. Burton said in an email to NBC News that the two groups Priorities groups together have now raised a total of $6.7 million, adding: "I have no doubt we'll raise our goal. The question is when we'll raise it."

    The SEIU, which organizes workers in government jobs, health care and property services, has been a strong supporter of Obama. Its leaders have been named among the most frequent visitors to the White House, when the Obama administration released most of its visitor logs.

    Other donors to the Obama Super PAC include:

     The American Association for Justice PAC has contributed a total of $50,000 to the PAC, and has also given a total of $100,000.00 to the House Majority PAC, which supports Democrats.

    John C. Law is the managing director of Warland Investments, a major landowner in Cypress, Calif. He has given $100,000 to Priorities USA, and is a big donor to Democratic political causes.

    Akerman Senterfit is a law and lobbying firm with locations throughout the U.S. Records show $20,000 going to Priorities USA from the firm, and another $10,000 from Joseph L. Falk, who specializes in the mortgage banking industry at the firm.

    William E. Little Jr. gave $150,000. He is chairman of George Little Management, LLC, a large producer of trade shows for consumer goods in the United States, and a Bates College trustee.

    Lenny Mendonca gave $50,000. He is a direcdtor in the San Francisco office of McKinsey & Co., chairman emeritus of the Bay Area Council, and chairman of the Bay Area Council Economic Institute. He is the former chair of Repair California, the organization behind the call for a limited Constitutional Convention to address the structural elements that have made governing California so difficult. He serves on the board of The New America Foundation.

    The full list is here.

    Tuesday is the day for the so-called Super PACS to file an annual report of donors. NBC News and msnbc.com will be scouring the filings, and posting details. We'll have updates on msnbc.com, and could always use your help identifying the economic and political interests behind the names.

    The political action committees must disclose by midnight tonight who gave them money, and how much they spent to support or oppose candidates in the presidential race, including the Republican candidates and President Obama as well.

    The official deadline for filing is midnight ET (12 a.m. Wednesday), so reports may trickle in. And it wouldn't surprise us if some campaigns file late tonight as attention is focused on voting results in the Florida Republican primary.

    Super PACS are known to the Federal Election Commission as independent committees, because they are forbidden to coordinate their activities with campaigns. Outside the limits of campaign finance laws, Super PACs may raise unlimited sums of money from corporations, unions, associations and individuals. They can use that money to advocate for or against political candidates.

    Read more about the reports filed Tuesday:

    After TV cameras leave, Romney PAC discloses $18 million

    Perry PAC's $1 million donor got help with nuclear waste dump

    Major GOP Super PAC raised $51 million in 2011

    Not 'Desperate' for cash: Obama lists his big fundraisers

    Sugar Daddy: Huntsman's father gave $1.9 million to Super PAC

    Colbert Super PAC raises $1 million; non-satirical PACs to follow

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    95 comments

    There's something wrong when Unions are allowed to take corporate money (union dues), and then use it to play politics , which is not in the corporations' best interest.usually against corporations. And, When will the workers Wake Up and realize they're paying WAY too much union dues if unions have  …

    Show more
    Explore related topics: spielberg, union, campaign-finance, obama, featured, seiu, election-2012

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