11/8/07

Carlyle Group chief questions SEIU motive

A large union's efforts at criticizing Carlyle Group and its purchase of nursing home Manor Care is aimed at unionizing employees and not improving patients' health care, Carlyle Co-Founder David Rubenstein said on Wednesday.

Rubenstein's comments will likely fan the flames between the private equity giant and the workers union, which have grown in recent weeks as the union steps up its protest of the firm and the entire private equity industry.

"The SEIU is not happy that 60,000 workers at the company aren't unionized. They're campaigning and saying the health care will not be adequate. That isn't true, in my view," Rubenstein said, speaking at The Deal's 2008 M&A Outlook conference in New York. "It's really an effort to increase unionization, and not so much to worry about patients' health care."

The 1.8 million-member Service Employees International Union, or SEIU, has taken aim at the private equity's corporate takeover wave on concerns about job cuts and workers' benefits. The union has made Rubenstein the symbol of what they believe is the buyout industry's massive wealth, thanks in part to favorable tax treatment. That tax treatment is currently under review by U.S. lawmakers.

In addition, the union has protested Carlyle's $4.9 billion purchase of Manor Care, saying the deal will negatively impact the care of patients there. Rubenstein said health care is not the focus of SEIU's protests.

The Manor Care deal has gotten further attention amid an inquiry by U.S. lawmakers into other nursing home deals where work forces were allegedly cut at the expense of patients after private equity firms took control.

SEIU spokesman Andrew McDonald said the union is focused on health care.

"Long before Carlyle chose to target nursing homes as their latest cash cow, SEIU has been fighting to improve care in nursing homes," McDonald said. "SEIU has fought for and won hundreds of millions of dollars in funding to improve care over last decade."

Rubenstein said on the sidelines of the conference that the Manor Care transaction is on track to close in the fourth quarter.

"There are a couple of regulatory approvals that are in the process of being obtained," Rubenstein told Reuters. "The deal will close in the near future, in my view."

(today.reuters.com)

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