Dealbook: Labor Lauds Erstwhile Foe, for One Deal at Least
By William Alden
PHILADELPHIA — The grizzled labor leaders in the audience had scarcely seen anything like it.
A top private equity executive, David M. Marchick, leaned in and planted a kiss on the cheek of Nancy Minor, the vice president of Local 10-1 of the United Steelworkers union. The union was so pleased with a deal done by Mr. Marchick’s firm, the Carlyle Group, that it was giving him an award.
“This is a celebration of strange bedfellows,” Mr. Marchick, Carlyle’s global head of external affairs, said before posing for a photograph with a group that included Leo W. Gerard, the union’s incendiary international president.
The worlds of labor and private equity, habitually on opposite sides of the bargaining table, sat together around dinner tables on Saturday for an awards ceremony at a union hall here. The event, honoring a selection of union officials and outsiders, offered a chance for blue-collar leaders — amid a few wisecracks and raised eyebrows — to tip their hats to the moneymen who they said had saved their workers’ jobs.
The celebration was the result of Carlyle’s deal last year to take control of a big oil refinery in town that its previous owner, Sunoco, had threatened to close. In an agreement brokered with help from the White House, Carlyle took a majority stake in a new joint venture with Sunoco, investing about $250 million to refurbish the refinery and build a railyard. The refinery processes 330,000 barrels of crude oil a day and employs more than 1,000 workers.
Carlyle, which entered the labor talks in a position of strength, impressed the union members by leaving their wages and benefits largely intact. The concessions the workers did have to make were relatively minor, including a reduction of overtime pay in certain cases, union leaders said.
“Carlyle just essentially took the labor agreement,” said Thomas M. Conway, the steelworkers’ international vice president for administration, who participated in the negotiations. “In all fairness, people would have listened to almost any idea if it meant keeping the refinery open.”
Fifteen months after the deal closed, the union was handing out plaques not only to Mr. Marchick but also to Philip L. Rinaldi, the chief executive of the joint venture, Philadelphia Energy Solutions, who was hired by Carlyle.
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