Rainier has been owned by Stroh Brewing since 1996. Now Stroh plans to sell its nine beer labels, including Rainier, to Pabst Brewing Co. for an estimated $400 million. Pabst will acquire the brand name Rainier and the right to market it, but not the brewery, the machinery, or the employees.
The news didn't come as a total surprise. Rumors of a buyout had been circulating for months, both inside the brew house and within the bottling and packaging plant on the other side of Airport Way. "A lot of the guys realized when Stroh took over that it was just a matter of time," one worker told me. "We call them the Death Squad. They've shut down a lot of breweries."
The Stroh family plans to get out of the beer business altogether and concentrate instead on managing its real estate holdings.When I called the brewery to talk to some workers, the human resources department informed me that I would have to clear my request with a corporate communications director in Detroit.
Instead I headed down to the brewery to look around. Steam hissed out of the top of the brew house. The smell of hops overpowered the exhaust fumes of I-5 and Airport Way South. A group of workers were taking a break outside the brewing area, leaning against a cement wall painted pale yellow.
"I love this job," said one. "I spend more time with these people than I do with my family. I was hoping I could retire here. A lot of these guys, this is the only job they've ever had."
Only about 30 people work in the actual brew house at Rainier. They make a tight team; many of them have worked together for decades. The banner stretched out over their heads congratulates them for first prize in the 1998 Great American Beer Festival. When I asked how they felt about another group of brewers making Rainier beer at a different brewery, they just shrugged. As it turns out, they themselves brew around 40 brands of beer and soft drinks, everything from Bull Ice to Henry Weinhard's Orange Cream Soda and Pete's Wicked Ale.
The brewers were obviously holding back their opinions, not wanting to burn whatever bridge they may need to cross when the transaction becomes official. In fact, it took me three days to find a brewery employee willing to go on the record. Rick Romeo, a Teamster for 25 years, figured he didn't have anything to lose; he didn't expect to be working at the Rainier plant much longer, anyhow. He invited me down to tour the plant during the graveyard shift.
The Rainier brew house is connected to the packaging and bottling plant across the street by a skybridge of sorts, a large overhead corridor through which thousands of barrels of beer flow each day. Romeo met me inside the plant, next to a tower of cans, and he led me on a quick tour of the operation. Men wearing safety glasses and baseball caps hosed down foamy puddles of beer and broken glass, assembled cardboard boxes, raced around on forklifts with pallets stacked with cans and bottles. Labeling machines whirled, packaging machines spun. Beer squirted out into a seemingly infinite row of bottles. There were shards of broken glass all over the floor and the place smelled, not unpleasantly, like beer.
Everybody I talked to there liked the job and wanted to keep it. I asked Dennis Keefe, a 24-year brewery veteran just a year away from retirement, what he thought of the news. He told me, "We didn't like the way it came down. Everybody in here is up in arms and hostile. They should've given us some kind of idea what to expect."
"C'mon, tell him how you really feel," said Romeo.
"They are a bunch of low-life motherfuckers, and you can quote me on that," said Keefe, before adding, "My name is Rick Romeo."The employees of the Rainier Brewing Company are overwhelmingly union. Local 117 of the Teamsters represents 130 or so brewers, bottlers, and packagers; Teamsters Local 174 represents about 30 forklift drivers in the warehouse, and Local 286 of the Operating Engineers represents the engineers who keep the machinery running.
Brewery workers earn about $16 an hour and up, plus good benefits and a solid pension plan with an early retirement option--not to mention a useful discount on kegs and cases should the need arise.
"It really is a good, dedicated work force down there at the brewery," says Ed Seil of Teamsters Local 119. "A lot of long-time people in the industry work down there. Those are the people that will be hurt by this sale."
The Rainier brewery is one of Seattle's oldest companies. Originally called Seattle Brewing & Malting, the company was founded by a German immigrant, Andrew Hemrich, in 1878. This was 11 years before Washington became a state, back when the Elliott Bay tide flats used to reach all the way to what is now a parking lot stacked with kegs and pallets.
Today the tide flats are obscured beneath acres of asphalt slabs and concrete boxes, the foundation for a gritty industrial zone that has driven Seattle's economy for decades. The Rainier brewery has always been a big part of that economy, and a steady producer. Last year the brewery produced a million barrels of 40 different brands of beers.
But the glory days of medium-sized U.S. industry are gone. Either you're a corporate giant or you're serving a specialty niche--if you're stuck in the middle, you're bought out by the big fish and outmarketed by the little fish. Two recent additions to the brewery's neighborhood exemplify this trend nicely: Starbuck's and Amazon.com.
The Stroh family chose to sell out of the beer business after its share of the market shrank from 7.9 to 6.7 percent last year. Fifty years ago, that share would have made the company the biggest brewer in the nation; today that share leaves the company vulnerable and expendable.
In brewing, as in most industries, the choice is simple: eat or be swallowed. The Stroh family has done its best over the past decade to be predator rather than prey, buying up brand names and shutting down breweries--thus the nickname "the Death Squad." But in the end they were swallowed by Pabst, which will probably in turn be swallowed by Coors or Miller or Anheuser Busch, or all three if they merge.
Charlie Best of the King County Re-employment Support Center refers to this phenomenon as "business activity resulting in worker displacement." Best, who met with Stroh management and union reps within 24 hours of the announcement, had a busy year in 1998: 7,259 displaced workers from 56 King County companies. The people affected included production workers at Intel, cancer researchers at Target Genetics, food processors at Peter Pan Seafoods, and bible-thumpers from the Promise Keepers.
Best says that the vast majority of these lay-offs resulted from mergers, acquisitions, and consolidations--not the failure of the local company. In some cases the big fish will eat the little fish just to prevent competition. The transactions may be good for the economy, but they are not always good for individuals.
"We hear a lot about the booming economy," says Ron Judd, Executive Secretary of the King County Labor Council. "Everything's rocking and rolling, the stock market's going wild. But the fact is that there's a whole lot of people who aren't benefiting from any of that stuff."The Stroh/Pabst deal will be finalized in April if it passes the anti-trust requirements of the U.S. Department of Justice. The Teamsters' International will be holding an emergency meeting in Washington, D.C. on February 11, to devise a strategy for Stroh employees across the U.S. who will be hurt by the transaction.
In Seattle, brewery employees will continue with their jobs through the end of the year, working for Pabst instead of Stroh. But barring creative solutions from daring entrepreneurs (paging Paul Allen!), the brewery will probably be shut down in January of 2000.
That would be a shame. Not only is the Rainier brewery a beautiful old building, it's a working factory with modern facilities, updated equipment, and an experienced work force. All it needs is a new owner.
