Pabst’s Pension Cuts Seen as an Act of Swill

Once, Pabst owned this town.

Now T-shirts and signs at small corner bars read “Shame on Pabst!”--condemning the 152-year-old brewer’s move to cut benefits for more than 800 retired workers.

“What they did was a slap in my face. After putting 42 years into that place, I thought that someone put a knife into my back,” said Roman Makarewicz, 74, his voice shaking in anger.

“I will never drink another drop of Pabst as long as I live.”

Last month, Pabst announced it would cut health and death benefits for more than 770 union retirees and 43 nonunion retirees. The move would save Pabst $3.5 million and help keep the Milwaukee plant running, said Gary Lewitzke, Pabst’s industrial relations director.

But that has caused quite a stir in this town, where the brewer was founded and is older than the state of Wisconsin itself. Many see this move as an indication that Pabst will soon close the Milwaukee plant.

Even President Clinton at a Labor Day rally here touched on the controversy.

“Every American ought to have the right to a good retirement plan, including those folks at Pabst,” Clinton said, noting that he had signed a law protecting pension benefits in his first term.

The union has asked the National Labor Relations Board to make the company continue the benefits payments and a U.S. District judge has issued a temporary restraining order that puts Pabst’s plans on hold.

The order, which doesn’t affect nonunion retirees who are losing their benefits, expires Sept. 27. A hearing is scheduled for Monday on whether the order should be extended.

The company, in turn, has asked the court to rule that the cancellation of benefits is legal.

Pabst’s oldest known parts of the current Milwaukee plant date back to 1870, with some of the operations on the site of the original 1844 brewery.

Sales have slipped in recent years for Pabst, once a dominant force in the beer industry. It was third in sales of 31-gallon barrels in 1975, with more than 15.6 million sold, but dropped to sixth in 1995, with 6.3 million sold, according to Modern Brewery Age, an industry publication.

In addition to its declining sales, the Milwaukee brewery has also been cited as the least efficient of the company’s three plants. The other breweries are in San Antonio and Tumwater, Wash.

Now, many workers believe the end may be near for the plant.

“From information we’ve received from inside the plant, not much longer,” said Jay Kopplin, president of Brewery Workers Local 9. “Pabst certainly has not been acting like a company who’s interested in making a long-term commitment to its workers or to its Milwaukee facility.”

Officials at the privately held S&P; Co., a Mill Valley, Calif.-based real estate and beer company that bought Pabst in 1985, declined to comment on whether the plant would be shut down.

But Bill Bitting, executive vice president and general counsel for S&P;, said its viability depends on reaching a reasonable labor agreement with the union as well as the cost of running an aging brewery.

Pabst and its union have been working without a contract since May 31.

“The Pabst plant in Milwaukee is just too expensive to operate and stay in competition with other, more modern breweries,” Bitting said. “We have to cut costs to try to make a profit, otherwise there’s no reason to be in business.”

Analysts say the cutbacks reflect the no-frills style of S&P;, which has a history of buying declining breweries and slashing costs to make as much money as possible.

“What the owners of Pabst are trying to do is maximize their short-term profits so that they can continue to survive,” said Robert Weinberg, an industry analyst at R.S. Weinberg & Associates in St. Louis. “That indeed makes sense.”

To former workers, the solution isn’t to cut retiree benefits.

“They think that they’re saving $3 million? My God, that place is so obsolete. That’s why they’re not making any money,” Makarewicz said.

“I would put new machinery in. I would advertise as much as I could. Those two things alone could put Pabst back into the market.”

But even all that may not be able to bring back beer drinkers angry over the benefit cuts.

“That boycotting of Pabst Brewing--that’s going to be their downfall,” Makarewicz said. “They did wrong.”