The November 18, 2004 morning
Chicago Tribune broke the shocking news, "Kmart
snaps up Sears for $11 billion. Deal for Chicago icon creates No. 3
retailer."
For months the business press has
reported Kmartıs struggle to survive bankruptcy, Sears Lacy's
unproductive efforts to turn around flat sales, and bottom
fishing investors patiently circling the waters like sharks, waiting
to pick up choice real estate locations at bargain prices.
On November 18 the sharks struck,
triggering scores of business articles, a sharp jump in Kmart and
Sears share prices, and new responsibilities for Edward Lampert,
Chairman of the new Sears Holdings Corp, Alan Lacy, new Vice
Chairman and CEO of Sears Holdings, who also receives a 50% salary
increase plus other generous incentives, and Aylwin Lewis, new
president of Sears Holdings and CEO of Kmart and Sears Retail,
reported to lack retail experience.
Sounds like everybody's happy with
the new arrangement, subject to Shareholders'
approval.
But is everybody happy? Are
Shareholders happy? Are currently employed associates happy? Are
retirees who built the company happy? After the bones have been
picked and cast aside, will investors, bond holders and the Pension
Benefit Guarantee Corporation be happy?
Most important, will
customer/shoppers be happy? How long will it take for the new Kmart
and Sears organizations to define themselves, develop effective
buying and selling strategies, and decide how, what and where each
store is selling. With so many other places to shop, will the
shopping public have the patience to wait while the restructuring
takes place, or respond favorably with their wallets, if and when it
is ever completed? Aylwin Lewis's challenge is awesome!
On November 18 the retiree telephone
lines hummed. Retirees and many employed associates wonder what the
news may mean for them, and for their families. When a big
billionaire and millionaires divide up the spoils, little people
become frightened about their future.
The theme of retiree phone calls, utter
disbelief that Kmart, a bankrupt, troubled retailer could buy Sears,
regarded for decades as the internationally recognized model for innovative
marketing to millions? For years, foreign companies sent their key
executives to Sears to train and learn their successful merchandising and
marketing methods.
What the hell happened?
How did Sears fall from incon to irrelevance?
Retiree callers say, Shame on Sears. Shame on
Lacy. They ask, "Are you going to the Wake?"
"When will the funeral service be held?" "Should
we hold a Blue Light service, now that Sears has died?"
"I had a tear in my eye when I read the paper. So
sad,"one said. "November
18, 2004 will live in infamy," said another.
Then retirees express fears about what little
remains of their retirement benefits, promised to them years ago by Sears
executives they trusted more than many of the "short-timers"
who occupy or will soon invade the Hoffman Estates campus.
What will happen to retirees'
pension payments? What will happen to retirees'
health care and medical insurance? What will happen
to what little is left of retirees' life insurance
benefits, fought unsuccessfully in court for years, and reduced by the judge
to a pittance of what they paid for and were promised for years? What hope
can retirees have for their remaining benefits at the hands of ³bottom
fisher² investors who hve a reputation for dissecting and dismantling the
companies they buy up, while richly rewarding themselves?
Are these concerns limited to retirees? What
about currently employed associates? Don't you
think that they are concerned about their futures and their families? Who
can they trust? Out of desperation will they look to unions for help?
As the billionaire and millionaire owners
move the pieces around, sell this and that, it will behoove them to think
about the little people, hard working associates, formerly loyal retirees
and their families, friends and neighbors and the great American shopping
public who will judge their actions and ultimately decide whether to shop at
Kmart or Sears, or just take their business elsewhere.
During their working years, Sears retirees
were proud to be associated with a company known to be a good place to work
and a good place to shop for their familyıs needs. In recent years, retirees
have been deeply shamed by the sorry state of their once-great company, and
can only hope against hope that the management of the new Sears Holding
Corp. will find the wisdom and hard-nosed merchandising ability to restore
Sears to its position as a premier American retailer, while living up to its
responsibilities to currently employed associates and retiree families.
Mel Schultz, Sears Retiree
Northbrook, Illinois
November 21, 2004
In Memorium:
David Paul Norum
Retired V.P. of Taxes
Chicago
Tribune
July 22, 2004
David Paul Norum, 72, of Northbrook. Beloved husband of
Renate, nee Pelzer; loving father of Karin (Jon) Johnson and Kirsten (Tom)
Muller; dear brother of Jay Norum and the late Judith Rizzo; cherished
grandfather of Linnae and Krista Johnson and Matthew and Annika Muller.
David was the Corporate Vice President of Taxes with
Sears Roebuck and Co.
Memorial service will be Friday at 3 p.m. at the Village
Presbyterian Church, Northbrook, IL. In lieu of flowers, memorials would
be appreciated to NSWB/American Cancer Society, 820 Davis St., Suite 340,
Evanston, IL 60201 or Village Presbyterian Church, 1300 Church St.,
Northbrook, IL 60062. Funeral info: Hanekamp Funeral Home, 847-272-3890 or
www.hanekampfuneralhome.com. Published in the Chicago Tribune on
7/22/2004.
Sears Announces Changes in its Compensation and
Benefit Plans
As
recently announced, Sears is shifting its focus from providing
retirement benefits through the Pension Plan to increasing the
company match in the Sears 401(k) Savings Plan to the highest in
retail. The information here describes the changes and how they
affect current associates.
However,
Sears has informed NARSE that these changes will not affect current
retiree benefits.
These changes are
being made to better align the Sears
compensation and benefit plans with other retailers.
Set forth below is
a brief look at the enhanced company match, as explained by Sears:
For every $1
you contribute of the first 1% of eligible pay, Sears
will contribute $1.50.
PLUS
For every $1 you contribute up to the next
4% of eligible pay, Sears will contribute
an additional $1.
Sears currently matches 70 cents for every $1 you contribute up to
5% of eligible pay for a maximum match of 3.5%. With the new match,
the maximum match from Sears increases to 5.5% - a 2% greater match!
Here's a brief look at how these changes affect associates:
Associates
age 40 and over as of December 31, 2004:
If you are a Pension Plan participant as of December 31,
2004, you will have the one-time option to keep the current Pension
Plan and 401(k) company match of 3.5% or to move to the enhanced
401(k) company match of 5.5% and not accumulate a future benefit in
the Pension Plan. Additionally, Sears will continue to subsidize
retiree medical if you qualify for coverage at
retirement.
Associates
under age 40 as of December 31, 2004:
Starting in 2005 the enhanced 401(k) company match of 5.5% will
replace your pension benefits.
Additionally, Sears will not contribute toward retiree medical;
however, you may be eligible for coverage if you meet the
eligibility requirements at retirement.
Associates
hired on or after January 1, 2004 and associates who are not
eligible for the Pension Plan:
You will be eligible for the increased 5.5% company match in the
401(k) Savings Plan. Additionally, Sears will not contribute toward
retiree medical; however, you may be eligible for coverage if you
meet the eligibility requirements at retirement.
Important
things to note:
No associate will lose any benefits earned under the Pension Plan as
of December 31, 2004. No associate will
become a participant in the Pension Plan after January 1, 2005.
Why Sears is Making
These Changes
Sears wants to provide benefits that are in line with those
offered by our best competition. We also want to do a better job of
providing benefits that suit our current workforce. Some of our associates
don't spend their entire career with us and want to earn benefits that are
more flexible. A 401(k) plan can serve those needs. That's why we have
decided to shift our focus to the 401(k) Savings Plan and increase the
company match to the highest in retailing.
By addressing the interests of associates
while responding to the cost structure of our competitors, we create a
situation in which associates and Sears can win together.
A Retirement Program for Today's Workforce
Pension benefits are designed to reward long
years of service, so an associate who leaves
Sears with even as much as 10 or 15 years of service
typically has earned only a small benefit under the Pension Plan.
Associates who leave with less than five years of service have earned
no vested pension benefits at all. These days, associates average 10 years
of service, which is now common in the retail
industry. The Pension Plan has become much less meaningful for a large part
of our workforce as a result. So, Sears will be shifting our focus from
providing retirement benefits through the Pension Plan to offering an
enhanced company match in the 401(k) Savings Plan.
Options for
Associates Age 40 or Over.
Sears Pension Plan and 401(k) Savings Plan Associates who, as of December
31,2004, participate in the Sears Pension Plan and are 40 years old and
over will have the chance to choose one of the following:
Stay in the current program: Contribute to
the Sears 401(k) Savings Plan at the current company match of 3.5% on
eligible contributions plus continue earning a future benefit in the Sears
Pension Plan.
OR
Move to the new program:
Contribute to the Sears
401(k) Savings Plan at an enhanced 5.5% company match on eligible
contributions, keep the pension benefit earned through December 31, 2004
and stop accumulating a future benefit in the Sears Pension Plan.
Keep the following in
mind:
You do not have to take any action right now.
The current pension and 401(k) programs will
continue unless you decide to move to the new program. You will receive a
personalized packet at your home in early April to help
you make your decision. You will also have access to an online
modeling tool and other resources during the April
and May decision period.
If you choose to move to the new program, you
will not lose any benefits you have earned under
your current plans as of December 31, 2004:
Pension Plan:
You will not accumulate any future pension benefits as of
December 31, 2004. You will be entitled to this benefit at normal retirement
age (age 65), as long as you are vested - have five or more years of
service - at the time you leave Sears. To see an estimate of this benefit as
of December 31, 2003, close this window and view your benefit listed under
Sears Pension Plan. The pension amount shown reflects your qualified and
non-qualified benefit, as applicable.
401(k) Savings Plan:
If you are currently contributing, you will continue to receive the 3.5%
company match on eligible contributions made through December 31, 2004. The
enhanced 5.5% company match will begin on January 1, 2005. If you're not
already contributing to the 401(k) Savings Plan, you may enroll at any time.
Note for part-time associates age 40 and over
who become eligible to participate in the Pension
Plan during 2004: Packets will be available to you early in 2005, and you
can make your decision then. You do not have to take any action now. If you
do not become eligible for the Pension Plan during 2004, you will become
eligible for the enhanced 5.5% company match on
eligible contributions made to the 401(k) Savings Plan.
Retiree Medical Benefits
Sears will continue to subsidize coverage for associates age 40 and over as
of December 31, 2004 who qualify for retiree medical at retirement. The
retiree medical subsidy will never be higher than the subsidy
available during 2004.
Any thoughts, suggestions or
comments on this announcement can be emailed to NARSE Chairman, Ron Olbrysh:
ron1061@comcast.net
In Memorium Charles F. Moran
Chicago Tribune
April 12, 2004
WHEATON, IL...Charles F.
Moran, retired business leader and civic benefactor, passed away at his
home in Wheaton on Monday (April 12).
He retired in 1993 as Senior Vice President and a member of the Sears,
Roebuck and Co. Management Committee after a 40-year career with Sears.
Most recently he was Chairman of the Board of Denny's Corporation and
President of the Homan Arthington Foundation, which was responsible for
redeveloping the original Sears headquarters
location on Chicago's West Side into affordable housing for 300 families
in the North Lawndale neighborhood.
Mr. Moran was born in Brooklyn, NY in 1930, and developed a lifelong love
for sports and humor. He starred as a catcher at Drew University in
Madison, NJ, played in the Northern League on a team affiliated with the
New York Yankees, and earned positions with numerous traveling
All-Star baseball teams. He caught batting practice for the Brooklyn
Dodgers on several occasions, including for the 1949 major league All-Star
game at Ebbets Field.
One All-Star team appearance in 1948 led him to Maueb Chunk (now Jim
Thorpe), PA, where he met his wife of 52 years, Dolores Huber. After a
short Army stint, Mr. Moran joined Sears as a trainee at its Hackensack,
NJ store. In 40 years and six moves, he took on increasing responsibility,
ranging from spilling paint as a trainee to selling the Sears Tower, from
plowing Sears parking lots to building new parking lots, and from
integrating Dean Witter and Coldwell Banker into Sears to then
subsequently leading the divestiture of these units.
Mr. Moran also acted as Chairman of Thermadyne Holdings Corporation and
Prodigy Services (a joint venture between Sears and IBM that was a key
precursor to the Internet). He acted on numerous corporate boards,
including Discover Bank and the Morgan Stanley Trust Company, SPS
Transaction Services, Inc., Advantis, Inc., DeSoto, Inc., and Dean
Witter Reynolds, Inc. His other civic contributions included membership in
the Sorin Society at the University of Notre Dame, and as a benefactor to
many needy students.
He leaves a loving family and numerous friends and colleagues who will
miss him for his many contributions. His ongoing legacy is his family --
wife Dolores, daughter, Mary (William) Deatherage; son, Charles (Dianne)
Moran; daughter, Alice Moran; son John (Laura) Moran and 11 grandchildren.
Visitation will be at 4 to 9 p.m. on Wednesday, April 14 at Williams-Kampp
Funeral Home at 430 E. Roosevelt Rd. in Wheaton. A funeral Mass will be
held at 10 a.m. Thursday, April 15 at St. Mark Catholic Church at 303 E.
Parkway Dr. in Wheaton.
In lieu of flowers, contributions may be made to the Rush University
Medical Center Philanthropy Department, Suite 250, Chicago, IL 60612, or
to the Homan Square.
In
Memorium - Mary Ellen Moloney
Chicago
Tribune - Feb. 15, 2004
Mary Ellen Moloney, age 87, beloved daughter of the late
Patrick and Margaret; loving sister of Sr. Margaret Mary Moloney, R.S.M.
Retired 40 year employee of Sears-Roebuck. Visitation
Monday, 4 to 9 p.m., at Hursen Funeral Home (SW Corner of Roosevelt and
Mannheim Rds.), Hillside/Westchester.
Lying in state Tuesday, 10 a.m. until time of funeral
Mass 10:30 a.m. at St. Thomas the Apostle Church, 1500 Brookdale Rd.,
Naperville, IL. Interment Mt. Carmel Cemetery. Funeral info toll free
800-562-0082 or www.hursen.com.
Published in the Chicago Tribune from 2/15/2004 -
2/16/2004.
