Residents say they have reason to be jittery. Since 1970, the city and surrounding area have lost more than half of their manufacturing jobs and 14 percent of their population.
Many are also skeptical about the Trian Group’s director, Nelson Peltz, who is known as a “quick flipper,” an expert at buying companies, whipping them into shape and then selling them at sizable profits. That is good news for some investors. But it has the 1,200 Heinz employees here and the 10,000 Heinz pensioners in the city and surrounding area wondering whether promises made now by Trian will matter if the investment group sells its shares.
“If that corporation gets all mixed up and moves, Pittsburgh is going be lost,” said Irene Sample, a retired nurse who lives in Mount Lebanon, just outside the city.
And what, exactly, will Pittsburgh lose? From the Trian Group's Heinz site:
[D]espite the Company’s iconic namesake brand, portfolio of power brands and robust cash flow characteristics, Heinz’s total shareholder returns have almost uniformly underperformed those of both the broader market and the consumer packaged food universe since the current management team began leading the Company in April 1998. In fact, total shareholder returns at Heinz have been negative over this timeframe (-10.8%) while other packaged food companies with leading brands such as The Hershey Company, PepsiCo, Inc. and Wm. Wrigley Jr. Company, the three companies specifically referred to by management as the most focused in the industry,(ii) have generated total shareholder returns of 60.4%, 60.4% and 65.3%, respectively, during this timeframe.
I don't have a dog (or a vote) in this fight, but is this really a legitimate case of industrial insecurity? Is it the return of Gordon Gekko, in the early 21st century? Or is it Pittsburgh-as-Popeye, saying "I've had all I can stand, and I can't stand no more." Put "symbolism" at one far end of a spectrum, and "long v. short term returns" at the other end. Where does the Heinz case lie?