They're munchy, crunchy, sweet and salty and, let's be honest, plain addictive. So when Granny Goose, the Oakland, Calif., maker of those tasty potato chips, nachos and caramel popcorn, announced it was closing its plant in the summer of 1995, one man balked at the bleak vision of a snackless future. "It was like a bomb dropped on the city," says Keith Kim, '85. Overnight, Oakland faced the loss of a 45-year-old manufacturing plant and 600 jobs.
That's when Kim stepped in. In July 1995, with the help of a loan from Oakland, he purchased Granny Goose for almost $5 million. This October, he repaid the last of that loan, making him the "best investment Oakland ever made," according to the San Francisco Business Times.
Kim was born in Seoul, South Korea, and emigrated to the United States with his mother and two brothers when he was 11. After high school in the Southern California town of Chatsworth, he came to Stanford and majored in economics. While he was a student, he qualified for his real estate broker's license. After he graduated, he developed real estate in Sacramento, where he bought his first house for $59,000, charging the $2,000 deposit to his credit card. He moved to Oakland in the late '80s, founded a construction company to work with his real estate firm and started building homes and developing small apartment buildings.
In 1994, Oakland's Merritt Bakery, with 100 workers, was threatened with bankruptcy, and Kim decided to buy it. "There's no bad business," Kim says. "There's just bad management." With this mantra, he was able to turn the business around to 10 percent profitability within 18 months.
It was then that Sunshine Foods announced it was closing its Granny Goose subsidiary. "When we first met with Kim, Granny Goose was a patient in intensive care," says Ron Parades, business agent for Teamsters Local 78, which represents more than half of the company's workers. But Kim was ready to nurse the Goose back to life. He sold the Merritt Bakery for a healthy profit and, together with the loan from the city, bought the snack food company. He immediately began, he says, "to shrink it into profitability," negotiating a 20 percent wage cut with the union, reducing management from 120 to 65 and dumping unprofitable lines.
"Kim was able to work and deal with the Teamsters," says Oakland Councilman Ignacio De La Fuente, who helped shepherd the negotiations. "He convinced them of the wisdom of working with him and being part of the solution."
By the end of 1996, Granny Goose had annual sales approaching $100 million. "It's a message that the local city government and small businesses can create a partnership for the benefit of both," De La Fuente says.
And what of the jobs that were saved? "I don't want to be hypocritical," Kim says. "I've made a ton of money out of this. But is that my only motivation? No. There are 600 jobs and that means 600 families. That's a tremendous responsibility."
by Raymond Hardie
