Kenyon: A stale decision at King Arthur

By JIM KENYON

Valley News Columnist

Published: 05-08-2023 8:54 PM

As delectable as the fresh breads and sweets are that come from the ovens at King Arthur Baking in Norwich, the company’s never-ending campaign to aggrandize its work environment is still hard to stomach.

A few samples from King Arthur’s website:

“Our culture is special, and like sourdough, must be nurtured to bring out the best in everyone.”

“We work in an open and safe environment where transparency and communication are valued.” 

“We are psyched to come to work.”

While King Arthur’s management wants the public to believe the company is the greatest thing since sliced bread, I suspect not all of its 370 employees would agree. 

The 19 permanent warehouse workers who are losing their jobs through no fault of their own immediately come to mind.

Their jobs involve putting together, packing and shipping customers’ online orders for everything from 5-pound bags of flour – the company’s staple – to King Arthur T-shirts (yours for only $26.95).

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For years, the “pick, pack and ship” jobs have been performed out of a King Arthur warehouse across Route 5 from Dothan Brook School in Wilder.

But King Arthur’s plan now is to outsource the work to “third party logistics partners,” a company spokeswoman told me via email last week.

Translation: King Arthur has found companies in other parts of the country willing to do the work for less than it costs to keep jobs that pay $20 an hour or so in the Upper Valley.  

King Arthur is working overtime to give the impression that it’s no big deal. The company has been outsourcing some of its warehouse work for almost a decade, it said in a statement. The number of packages “coming out of Vermont” decreased from 100% in 2014 to 21% in 2022.

That’s nothing to be proud of.

Particularly for a company that goes to extreme lengths to promote itself as “100% employee owned.”

The tag line appears on every bag of King Arthur flour. It’s prominently mentioned on posters and signage at King Arthur’s cafe, retail store and bakery on Route 5 in Norwich. 

King Arthur, which was founded in Boston in 1790 and bills itself as the first U.S. flour company, was sold to employees in 2004.

The company’s employee stock ownership program, known as an ESOP, was touted in a New York Times business story in 2016. “If the value of the company’s equity continues to grow,” longtime workers can receive handsome payouts when they quit or retire, the Times wrote.

Some employees refer to the ESOP as “golden handcuffs.” They have a distaste for management (“They’ll talk you in circles,” a worker told me), but they put up with it for one reason. King Arthur’s ESOP has “historically resulted in over 25% of additional annual compensation,” according to a 2022 company news release.

Nationally, about 6,300 companies fall into the employee-owned category. Hypertherm, the Lebanon-based engineering and manufacturing firm with 2,300 employees, is among the largest. In 2022, Hypertherm ranked 58th on a top-100 list compiled by the National Center for Employee Ownership. 

In theory, employee-owned companies prioritize the rank-and-file. Hourly employees — whether they’re dealing with customers in the retail store or working behind the scenes in the warehouse’s “fulfillment” department — are King Arthur’s bread and butter.

“Management talks a good game, but at the end of the day, King Arthur is just another corporation, looking after the bottom line,” said an employee who spoke on the condition of anonymity for fear of losing his job.

For a company not shy about letting the public know that it’s “committed to using the power of business as a force for good,” King Arthur has had little to say about the elimination of 19 Upper Valley jobs. 

I couldn’t find any mention on the company’s website or blog.

So much for transparency.

 But if you need to know “how to frost cupcakes at any skill level” or the “surprising history of pies,” King Arthur’s blog is a must-read.

VTDigger broke the outsourcing story in late April. King Arthur was quick to point out that people won’t lose their current positions until June 2024.

“We want them to have ample time to find another job within King Arthur, obtain training or further their education for a new role here at King Arthur or elsewhere,” the company’s statement read. 

It seems like fair warning, but from what I’ve heard it wasn’t the original plan. Apparently, the news leaked to employees, which left company execs little choice but to fess up sooner rather than later. 

I asked Carey Underwood, the company’s spokeswoman, in an email if that was the case. I also was curious about how much money King Arthur expected to save by shipping off the warehouse jobs.

And what about 20 or so seasonal workers who are brought in when online orders pick up around the holidays? Rumor has it that their jobs are goners too.

Underwood, whose title is director of mission partnerships and programs, didn’t respond. I also dropped by King Arthur’s headquarters, but was told that she wasn’t in. 

Underwood later emailed the company’s statement, which ended with a feeble attempt to mollify the warehouse workers losing their jobs:

“Whatever their next step, our hope is that our employee-owners who work in fulfillment feel very proud of the significant contribution they have made to King Arthur over many years.”

Lacking sincerity? For sure.

But it was either that or “let them eat cake.”

Jim Kenyon can be reached at jkenyon@vnews.com.

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