CHICAGO — The retirees have gathered monthly in a nondescript meeting room just outside Chicago for years, patching in conference calls from around the country and reminiscing about the old days when they proudly worked at Sears, “where America shops.”
Those mid- to late-20th century days were a time of stiff white shirts, die-hard company camaraderie and the opportunity to make lots of money. Sales and profits were up, promotions were frequent and profit-sharing was standard for many. Working for the country’s largest retailer was an honor, retirees say.
But more recently, the walks down Sears memory lane have turned to worrying — about the state of the stores, Chairman Edward Lampert’s turnaround plan and, closer to home, the future of their retirement and life insurance plans.
One of the 124-year-old retailer’s mottos was “Sears has everything,” and for its employees the mantra rang true. Over the years, however, restructuring and financial challenges eventually ended many of those popular perks.
The profit-sharing fund was dropped in 1978. The pension plan was frozen in 2005. Life insurance coverage was slashed in 1997. Last year, Sears employees who retired before 2000 lost a monthly health subsidy of $37.
Sears Holdings Corp., now the corporate entity for both Sears and Kmart, says it maintains a regular dialogue with its retirees, including a newsletter designed to keep them up-to-date on the company, and Lampert recently told the Chicago Tribune the company has honored its obligations to retirees and pension beneficiaries.
Nonetheless, since a company warning earlier this year that it’s uncertain about its future, many retirees say they are less concerned about their pensions than their life insurance payout, which averages roughly $10,000, according to Ron Olbrysh, chairman of the National Association of Retired Sears Employees.
Most are 70 and older, and some are not in good health. They worry about what would happen to Sears’ funding of their life insurance policies if the company files for bankruptcy.
Retirees who sat down with the Tribune to reflect on their time with the company say it was Sears’ inability to look ahead and keep up with changing times that led to its decline. Company watchers agree.
“It was a great business until the people at the top decided that strategy didn’t matter for them and that they would forever be able to play the same game and win,” said James Schrager, clinical professor of entrepreneurship and strategy at the University of Chicago’s Booth School of Business.
“This is a story we see all the time,” Schrager added. “Sears was not the first, and will not be the last company to decide that strategy doesn’t apply to them.”
Olbrysh, 75, remembers when Sears was the place to be — not only for shoppers, but for workers.
In 1972, Olbrysh left a government job in Cleveland for work as a trademark attorney at Sears. He chose the retailer over a job at General Electric because the well-regarded retailer “made me an offer I couldn’t refuse,” he said.
By the time he retired in 1996, he was an assistant general counsel.
“The benefits were great,” Olbrysh said. “We had profit-sharing, which was always an incentive to work at Sears.”
When Olbrysh began with Sears headquarters on the city’s West Side, employees referred to the complex as the parent.
Over the years, as the company diversified its business, picking up financial firms such as Coldwell Banker and Dean Witter, “parent” gave way to “headquarters,” and the company’s culture changed, Olbrysh said.
“When it was ‘parent,’ it was like a family. When it changed to ‘headquarters,’ it wasn’t as close as it used to be.”
By then, the retailer had moved its main offices downtown to Sears Tower (now Willis Tower), where Olbrysh and his legal department colleagues worked on the 69th floor. When the vast suburban headquarters known as Prairie Stone opened in 1992, Olbrysh set up office there.
In the midcentury years and even through the ’70s, Sears was considered to be the “largest and most powerful retailer in the world,” Olbrysh said, adding that as discount retailers nipped at its heels, Sears executives let success go to their heads. “They actually believed it, and said, ‘What’s this Wal-Mart? They are nothing.’ ”
The same thing happened when Amazon came along in the ’90s, he said. Now, “they are trying to play catch up and it’s not going to work.”
Olbrysh believes he made the right decision when he retired in 1996 with a lump-sum early retirement package instead of a long-term pension benefit. But as chairman of the retirees group, Olbrysh has been fielding calls from retirees concerned about their pensions and life insurance benefits if the company were to file for bankruptcy.
Olbrysh has pushed for more transparency under Lampert’s tenure. He has sent letters to Lampert. The group wants annual meetings to be streamed online and for Lampert to talk to the press and retirees more frequently. In May, before Sears’ annual meeting, Lampert gave an interview to the Tribune, in which he blamed much of Sears’ current woes on the media.
“I got out at the right time,” Olbrysh said. “All of us left on good terms with Sears. I sent four kids to college. It was a very good living. I’m thankful for that.”
The “family feeling” is what Elaine Leonard loved about working for Sears. In 1967, the mother of two took a part-time sales position working evenings in the toy department at a Sears store outside Chicago. She and her husband planned to buy a house and the additional income would come in handy.
“When you came to work, it felt like you were coming to your second home,” she said. “You felt like it was family. You were all in it together, you were all working together.”
The money she earned helped the family buy its first home.
Leonard, like her counterparts, spent her years at Sears steadily rising through the ranks.
Her part-time job navigating the hustle and bustle in the toy department quickly became a full-time job as a store manager secretary at a store at a large area shopping mall. That led to a management training program, and then overseeing several stores and service centers from the northwest suburbs to Milwaukee. It was the manager of the toy department, according to Leonard, who saw her talent and helped propel her career.
“The company was always interested in promoting people they felt were performing to their expectations,” said Leonard, 83. “And you like to think you’re doing a good job, then you are offered another job by getting a promotion, (and) it feels pretty good.”
In her next role, as a personnel manager at the shopping mall store, Leonard traveled to colleges and universities to recruit graduates.
When Leonard retired in 1993, she was working at Prairie Stone in the workforce diversity department. She handled everything from hiring to firing, and discrimination suits as well. “If you had a problem, you knew you could come to a manager and someone would help you … it was like your second home.”
‘Takeaways’
Richard Bruce was trained as an engineer, but in 1960 at age 24 he left a management training job at Ford Motor Co. in Kansas City, Mo., to take a lower-paying job at Sears.
He was familiar with the retailer and excited about the benefits the company had to offer. “I thought … ‘I can afford to take a lower earnings because I’m going to retire very wealthy.’ ”
Bruce started as a catalog buyer, moved on to data processing and marketing, and by the time he retired was an executive in the human resources department.
With each promotion, the new responsibilities were like going to work at a new company. “It was challenging, it was fresh and invigorating,” he said.
Plus, his wife didn’t have to work, and he was able to send three daughters to college. It wasn’t just the money and benefits that Bruce enjoyed. It was the camaraderie.
But over time, he said, things kept changing. “Takeaways, takeaways, takeaways,” he said.
When the profit-sharing plan was terminated, he felt it also removed the incentive for talented workers to join the company.
In 1993, as then-Chairman Edward Brennan led the company through spinoffs and sales — generating large returns for investors by shedding all or part of Allstate Insurance Co.; Dean Witter, Discover & Co.; and Coldwell Banker Residential Real Estate Services — Bruce was among the employees who raised his hand for an early retirement program.
“It was a no-brainer package for people who were young enough to go out and get another job. For those of us who were close to retirement anyway, it was a gift,” said Bruce, now 80.
Leo McCormack, 79, worked his way through Boston College in the late ’50s delivering caskets and appliances for Sears.
After graduation and a three-year stint in the Marine Corps, McCormack started a yearlong Sears training program and began working in Brockton, Mass., as a department manager.
For McCormack, like many other rising Sears employees, his career was marked by a new city and a new job almost every two years.
He worked in Nashville, Tenn.; Nashua, N.H.; Peekskill, N.Y.; and Philadelphia, where he was in public relations, he said.
By the time he retired in 1993, he was the labor relations manager for the product services division, negotiating with unions on Sears’ behalf. It was a job he said he was proud to do, because he was proud of what the company had to offer workers.
Looking back, though, he remembers concerns about the company’s naivete when it came to keeping up with a rapidly changing retail landscape.
“Sears didn’t realize that everybody that ran a (cash) register was their competition,” McCormack said.
He recalled his time in the 1970s as a regional manager in Pennsylvania, learning that a Kmart in Altoona, Pa., was open for business on Sundays while Sears remained closed. At a company meeting, he asked an executive about it.
“Boy, was he mad,” McCormack said. “He looked at me and said ‘McCormack, Sears will never open on Sunday.’ ”
McCormack’s retirement didn’t mean he was done with his employer.
In 1997, he became one of the founding members of the retirees group and a year later joined about 100 fellow retirees sporting yellow shirts marching outside the company’s 1998 annual meeting shouting “Shame on Sears.” They were protesting then-Chairman Arthur Martinez’s decision to reduce life insurance benefits for 84,000 retirees, saving the retailer $1.4 billion.
For the event, McCormack built a replica of a pine coffin with a sign declaring “Sears Retirees DieHard.” It remains in the attic of his garage.
When William “Bill” Barker started at Sears in 1958, the Scotland native said he just “needed a job.” Eventually, his work at the retailer became “the best job” he ever had.
“Nobody wanted anything … as long as we made money,” Barker said.
Barker’s career in customer service and operations management began at a store in New York, where he made $40 per week plus a 1 percent commission working in plumbing and heating.
Sears began to “put its head in the sand,” in the 1960s, Barker said, as discounters began encroaching on what for years had been department store territory. “It became a real issue in the ’80s,” he said.
Barker, 80, attends every annual meeting and is worried about what might happen to him or his wife if they lose their life insurance.
As for Lampert, “I’ve always had a feeling in my gut that he has something up his sleeve and Seritage (a real estate investment trust run by Lampert) is part of it,” Barker said. “I can’t make heads or tails of why he would put all of his money into it if he didn’t think there was a pot of gold at the end.”
