Returning to Aramark as the Philadelphia food and uniform services giant’s new chief executive was like a step back in time for John J. Zillmer. Show What Zillmer heard coming in last week — listening to what the businesses are focused on, the challenges they are facing — sounded familiar to the executive, whose previous tenure at Aramark ended in 2004. “The business construct hasn’t changed all that much,” Zillmer said Thursday, his fourth day on the job. Zillmer’s return to Aramark followed a period of turmoil — fueled in part by the company’s decision last year not to pay expected bonuses to thousands of managers — that got the attention of activist investor Paul C. Hilal, who now controls 20 percent of the company. In short order since August, previous CEO Eric J. Foss was out, the board was revamped, and Zillmer was back. During an interview in the seventh-floor employee dining area of Aramark’s new headquarters at 2400 Market St., the events at Aramark before his arrival were off limits. Still, Zillmer, who displays quiet confidence, made clear that he has a deep understanding of the challenges facing Aramark. Two employees described the way Zillmer presented himself as refreshingly humble. After leaving Aramark, Zillmer was the CEO of companies in Scottsdale, Ariz., and Seattle, but he never moved from Chester County, choosing instead to commute to those jobs and spend weekends at home. “We love Chester County. We’ve got friends, our church, the whole community,” he said. It helps that he and his wife, who manages the couple’s charitable foundation focused on youth in the Kilimanjaro district of Tanzania, have a daughter who stayed in Chester County. That means five of their seven grandchildren are here. They have three other grown children, in Florida, Arizona, and Chicago, where Zillmer spent 20 years before moving to the Philadelphia area in 1995. A Milwaukee native, Zillmer admitted to being a lifelong Green Bay Packers fan. But, thanks to three of his grandsons who are avid hockey players, he roots for the Flyers. In a 45-minute interview, Zillmer discussed his desire to reinvigorate the company’s customer focus and to restore employee morale, and the investment approach of Hilal, the company’s biggest shareholder. Answers have been edited for length. The first 30, 60, 90 days I’m going to be on a listening tour. I want to get out there and get into the field organization, meet with the frontline management ranks, the field ranks, and also with customers and clients and really get an assessment from them of what they think the company needs to do to get better. I come from a hospitality background. That’s been my focus for most of my adult life. I believe the company needs to reinvigorate its hospitality focus, its customer focus. It’s not a secret that the company’s growth rate has slowed over the last few years, that we’ve been not as competitive in the various markets that we serve, that we haven’t had the new account business sales that some of our competitors have had. My primary focus is finding a way to solve that problem, to get the growth back into the organization. I think a lot of that is really about creating that culture of customer focus. I think the company has been too inwardly focused on what was right for Aramark, as opposed to what was right for the other constituents, our customers, our suppliers, or the employees, frankly. I absolutely agree that there is low morale. I think we’ve begun to make a start. One of the things you do is you re-empower the front line to make decisions that are the right thing for the customer. We had centralized a lot of the functional support inside the company and begun to make decisions on a central basis that historically would have been made locally by frontline managers, district managers, and the regional VPs. We want to give them the power to serve the customer the way they want to be served. You open up the SKUs to allow the frontline manager to get what the customer wants. There’s no question that there are opportunities for process standardization. You want to be as efficient as possible, but you want to be efficient serving the customer what they want, not what you want to give them. That’s the difference. I don’t know what the SKU count is today. Frankly I don’t care. I want the frontline manager to be able to get what they need to serve the customer. We’ll make that fix very quickly. The organization is staffed with a lot of talented people. I would say if anything we are under-resourced as an organization today. There aren’t a lot of cuts to be made. To my way of thinking, this is going to be about adding resources to the organization to reinvigorate the growth culture. Will people end up moving from one position to another? It’s potentially possible, but I don’t see this as an opportunity to make cuts or to make significant changes in the structure. He has no interest in being characterized as being an activist investor. That’s not his approach. That’s not his style. He really wants to do what’s right for the company. That’s why his approach is very different. He studies the investments meticulously. He invests the time and energy to really understand the business, and he makes a long-term investment decision as opposed to a more typical activist approach where there is financial engineering and then they take their money out and they move on. That idea has come up for years and years and years. I don’t have any preconceived ideas about what to do or what not to do. First and foremost, I want to run the business the best that it can be run. Are there ways that we can improve the margins in that company, in that part of the business? I think we’ve got very good leadership in it. We have a very strong base of business. There are some things we can add to the capabilities. There are some things we can add to the product portfolio that would enhance the margins, but I don’t have a solution that I’m willing to sell to the street yet. I can’t tell you whether he did or didn’t. Joe has always been a very strong supporter of me. When I looked for new opportunities after leaving Aramark, Joe was my best reference. He called me the day I was announced, and we had a nice chat. My intention is to keep him engaged because he is such an icon to the company and the industry. Kim Scott has been named president and chief executive of Aramark Uniform Services, according to an announcement by Aramark chief executive John Zillmer. The appointment is effective immediately. Scott will become a member of the company’s executive leadership team, reporting to Zillmer, In her new role, she will oversee the company’s nearly 20,000 employees who serve approximately 400,000 customers providing uniform, laundry and allied services. Brad Drummond, who announced his retirement from the Aramark's uniform division at the end of the year, will serve as an executive advisor during his transition. Scott brings more than 26 years of experience to her new role, with a commercial background leading large, dispersed workforces in route-based distribution businesses. Prior to her most recent role as chief operating officer at Terminix Global Holdings Inc., Scott had leadership roles at Rubicon Global Holdings, Brambles Ltd. and CHEP USA. Aramark Corporation, known commonly as Aramark, is an American food service, facilities, and uniform services provider to clients in areas including education, healthcare, business, prisons, and leisure. It operates in North America (United States and Canada) and an additional 20 countries, including United Kingdom, Germany, Philippines, South Korea, Chile, Ireland, and Spain.[3] Traded as NYSE: ARMKRussell 1000 ComponentIndustryFood, Facilities and Uniforms [1]Founded1936 (1936) (as Davidson Brothers); 1959 (1959) (as Automatic Retailers of America)FounderDavre DavidsonHeadquarters2400 Market Street Philadelphia, Pennsylvania, U.S. Area served GlobalKey people [2]
Operating income US$ 746.31 M (2016)[3]Net income US$ 287.81 M (2016)[3]Total assets US$ 10.582 B (2016)[3]Total equity US$ 2.161 B (2016)[3]Number of employees 215,000 (2017)[4]Websitewww.aramark.comThe company is headquartered in Center City, Philadelphia, Pennsylvania.[5] Aramark's revenues totaled US$14.604 billion in 2018, and the company was listed as the 27th largest employer on the Fortune 500.[3][6] Aramark negotiates pricing and makes purchases directly from national manufacturers through distributors such as Sysco Corporation. The products range from healthcare, dairy, meats, seafood, frozen, canned and dry, paper & disposables, chemicals & janitorial, supplies & equipment, produce, and beverage.[7] Aramark has had distribution agreements with Sysco[a] for more than 20 years. In 2016, Aramark strengthened its purchasing power through acquiring the group purchasing organization HPSI.[9] Aramark was founded as Davidson Brothers in 1936 by Davre and Henry Davidson.[10] Davidson Brothers began by providing vending services to plant employees in the aviation industry in Southern California. In 1959, Davre Davidson partnered with William Fishman to establish ARA (Automatic Retailers of America), which became publicly traded a year later in 1960. In 1968, ARA provided services at the Mexico City Olympic Games, the first of 16 Games they have serviced, including Athens in 2004 and Beijing in 2008.[11] In 1969, ARA officially became ARA Services, to reflect its growing range of businesses. In 1983, Joseph Neubauer was elected CEO of ARA Services, and a year later, Neubauer led a group of executives to fend off a hostile takeover bid by coordinating a management buyout.[12] ARA Services changed its name to Aramark in 1994.[13] In 2000, Aramark purchased the concessions arm of the Ogden Corporation for $225 million in cash and $11 million in assumed debt, expanding its business to locations that included several major sports league venues, such as Staples Center in Los Angeles, and the Arrowhead Pond and Edison International Field in Anaheim.[14][15] In 2001, Aramark returned to the New York Stock Exchange as a public company under the RMK ticker.[16] In 2006, a group of investors led by Neubauer (and including CCMP Capital, Goldman Sachs Capital Partners, Thomas H. Lee Partners, and Warburg Pincus) proposed the acquisition of all outstanding shares of the Aramark Corporation, which was approved by shareholders. The merger was completed in 2007.[17][18] In 2004, Aramark acquired a 90% stake in the Irish catering company Campbell Catering. In 2006, Aramark acquired Seamless. Aramark spun off its majority shares in Seamless in 2012.[19] In July 2009, Aramark and the Colorado Rockies opened what is believed to be the first gluten-free concession stand in major league baseball.[20] By 2010, Aramark made gluten-free foods available at all 12 of its major league baseball accounts.[21] On August 29, 2011 Green Mountain Coffee Roasters sold Van Houtte USA (Filterfresh) to Aramark for $145 million.[22][23] In May 2012, Aramark announced that its board of directors had elected Eric J. Foss as CEO and that Joseph Neubauer would remain the company's Chairman.[24] In December 2014, Joseph Neubauer announced his retirement and Foss was elected as the company's next chairman.[25] In 2015, Aramark acquired Irish retail and hospitality business, Avoca Handweavers.[26] Aramark partnered with The Humane Society in August 2017, part of their initiative to increase plant-based food offerings for consumers. The training partnership includes a series of plant-based culinary trainings over a six-month period.[27] On August 26, 2019, Eric J. Foss retired as chief executive officer (CEO). Aramark created a position of "Office of the Chairman" consisting of Lauren Harrington, Stephen Sadove, Lynn McKee and Bramlage Stephen to handle day-to-day operations, until a new CEO was found.[28] On October 7, 2019, John Zillmer, who previously spent 18 years at Aramark, returned to the company and was named the new CEO.[29] On May 10, 2022, Aramark announced they would spin off its Uniform Services division into an independent, publicly traded company. The move is expected to be complete by the end of Fiscal Year 2023.[30] Three days before FY2018 management bonus payouts were to be paid, an internal communication told the management team that performance bonuses were postponed for three months. No explanation was ever given. This follows the company's 401k match at the plan minimum after a “phenomenal” year as reported by the CEO Eric Foss.[31] Labor law violationsIn April 2010, Aramark and the Coalition of Immokalee Workers reached a resolution that called for a 70−80% increase in wages for tomato pickers.[32] Aramark has also been the subject of a number of scandals regarding labor practices and business ethics. These include firing workers for reporting unsanitary food conditions, paying fringe wages, not paying for all hours worked, not paying backpay, and firing or eliminating the positions of those who file Equal Employment Opportunity Commission (EEOC) claims.[33][34][35][36][37] Food safety issuesIn 2013, an investigation by Pulitzer Prize–winning journalist Chris Hedges discovered that the food provided to inmates at Burlington County Jail in New Jersey was substandard and spoiled, and often made prisoners sick with diarrhea and vomiting.[38] Maggots found in the food preparation areas at Parnall Correctional Facility in Jackson, Michigan may have been the source of an outbreak of food-borne illness.[39][40] Maggots were also found in Aramark food products at Michigan's Charles Egeler Reception & Guidance Center[41] and two Ohio prisons, the Ohio Reformatory for Women and Trumbull Correctional Institute.[42] Aramark, however, was cleared by the Michigan Department of Corrections of any responsibility for inmate illness and for pests in Michigan.[43] Ohio and Michigan fined Aramark $270,000 and $200,000 respectively.[44] In April 2015, the managing board of The Cavalier Daily, a student-run newspaper at the University of Virginia, reported that Aramark literally "served garbage" to inmates in the Saginaw Correctional Facility in Freeland, Michigan. It also noted that Aramark has in the past "underfed inmates and fed them dog food, worms and scraps of food from old meals" and argued that the university should reconsider its relationship with the food services contractor in light of these ethical issues.[45] Michigan's oversight of Aramark's performance was criticized as inadequate in a report released in August 2015 by the group Progress Michigan after Michigan moved to end the contract.[46] Likewise, Aramark has been criticized for skimping portion sizes, food safety issues, and overcharging state governments (Michigan, Kentucky, and Florida) that have used their food in prisons; a Kentucky prison riot is reputed to have been caused by the low quality of food Aramark provided to inmates.[47][48] Direct provision asylum centresIn Ireland, Aramark has been criticised for its management of three 'direct provision' centres, where those seeking asylum in Ireland must stay until their application is complete, sometimes for a matter of years.[49] Activists have called for boycotting Aramark for profiting off the direct provision system, as well as the alleged mistreatment of asylum seekers in Aramark-run centres.[50] In 2014, asylum seekers in Meath launched a hunger strike over the "unacceptable living standards" in the Aramark-run centre.[51] In 2018, Aramark was forced to apologise after a mother of three from Zimbabwe was refused a slice of bread for her sick child.[52] Soon after, the Union of Students in Ireland voted to support a boycott of Aramark over its direct provision links, following on from the 'Aramark off our campus' campaigns in Trinity College Dublin, University College Dublin and The University of Limerick.[53][54] Aramark has been criticized for the "filthy conditions" in Chicago Public Schools following the privatization of janitorial services and Aramark receiving a $260 million contract for their management. Responding to these reports, Chicago Mayor Rahm Emanuel said "Aramark's job is to clean the schools, so our principals and teachers can focus on their fundamental responsibility: education. They will either live up to that contract and clean up the schools or they can clean out their desks and get out."[55] Wichita Falls Independent School DistrictAramark was hired for $2.65 million per year to provide janitorial services on 28 schools and three administration buildings by the Wichita Falls Independent School District in 2015. The district cancelled Aramark's contract and hired another firm because of numerous complaints about bad service. A report issued by the Wichita Falls-Wichita County Public Health District determined that one high school was infested with rats and mice. Janet Powell, the district's director of support services said, "Everyone on the committee felt lied to and deceived (by Aramark)."[56] Ohio Department of Rehabilitation and CorrectionSince 2013, numerous Aramark employees providing food services in Ohio prisons have been fired or otherwise disciplined for inappropriate behavior towards prisoners such as sexual relations, letter writing, and smuggling contraband. At least 204 Aramark employees have been banned from entering Ohio prisons for such violations. On December 1, 2015, inmates working in the kitchen under Aramark management held a strike because they were required to cut meat with pan lids instead of being allowed to use meat slicers. An Aramark employee was given a written reprimand over the incident.[57] Since the state started using Aramark in 2013, the Ohio Civil Services Employee Association has been trying to regain control of the food services contract. A bid submitted by the union in spring of 2015 failed after a state review found it did not properly reflect projected costs. Aramark's contract was renewed. The head of the union said Aramark “continues to violate their contract every day with food shortages, health and safety violations, bad employee conduct, low food quality.” As of late 2015, the union was pursuing arbitration against the state over this contract.[57] In 2014, Aramark was issued two fines totaling $272,200 for contract violations. The state offered to credit money spent on additional employee training towards the fines. The same year nine Aramark employees were fired for contraband violations and 15 were fired for "security violations."[57] In addition to this an inspection conducted by the Ohio State Corrections officials on 30 June 2014 discovered maggots in the Ohio Reformatory for Women in Marysville. Similar findings occurred in Michigan and Kansas correctional facilities.[58]
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