Negotiations affect 29,000 area workers; Deadline for deal is Tuesday; Five-month Calif. strike hangs over regional talks
By Stacey Hirsh Sun Staff March 27, 2004
Giant and Safeway supermarkets in the Baltimore-Washington area and the union representing 29,000 of their workers are fast approaching a Tuesday deadline for a new contract - and the threat of a strike that could cripple hundreds of local supermarkets and send tens of thousands of workers to the picket line.
Safeway Inc. and Giant Food Inc. are negotiating jointly with the United Food and Commercial Workers International Union, which represents cashiers, meat cutters and other workers. Their contract has been extended to expire Tuesday.
The local negotiation comes on the heels of a tumultuous supermarket strike and lockout in Southern California that lasted five months. Although it is difficult to predict what will happen here, industry analysts say both sides showed a willingness to endure a bitter, extended battle out West.
The effects of that strike could play out across the country, starting in this region, labor experts say. California-based Safeway is also negotiating contracts in several other cities across the country, including Seattle and Denver and in Arizona.
If Giant and Safeway workers strike, it would be the first time in at least three decades. The supermarket business has changed greatly during that span, particularly in recent years as Wal-Mart Stores Inc. and other nonunion retailers have picked off shopper dollars.
"My clear sense was that employers in retail around the country were very closely watching the Southern California dispute, and I think both the union and the employers saw this as something that would set the trend for bargaining in this industry in other parts of the country," said Paul Clark, a labor studies and industrial relations professor at Pennsylvania State University.
Other unionized supermarket chains in the area - Metro, Super Fresh and Eddie's - are part of separate contract negotiations not under way, so a strike would mean employees at those stores would continue to work.
UFCW Local 400 of Washington and Local 27 of Baltimore are scheduled to vote Tuesday on a contract still being negotiated. Giant and Safeway supermarkets in the region will be closed from 7 a.m. to 3 p.m. Tuesday while their employees vote.
If the members reject the contract and more than two-thirds of those at Tuesday's meeting vote to authorize a strike, union leaders can use the strike vote as a bargaining chip at the negotiating table or begin a strike. A strike would send all union workers at Giant and Safeway across the region, including on the Eastern Shore, to picket lines outside stores as early as Wednesday.
Nonunion competition
A key issue in the talks is health care - an issue that dominates most collective bargaining negotiations nationwide and was the overriding issue in the long California strike and lockout. Both sides decline to discuss their talks in detail, although a union spokesman said the costs of health care benefits are at issue nationwide.
"The UFCW, nationally, is committed to maintaining affordable health care benefits for workers in the supermarket industry," said Greg Denier, the UFCW spokesman. "The supermarkets in this area are profitable; they're in a very strong market position."
Giant and Safeway officials counter that they are trying to structure wages and benefits to compete with nonunion stores, which pay their workers considerably less. The average hourly wage of a clerk at Safeway or Giant is $13.19, compared with $7.68 for a nonunion clerk, according to Safeway.
"The main threat is the nonunion competition," said Harry Burton, the lead negotiator for Giant and Safeway. "They essentially do not have pension benefits as we have; and they pay very little in heath benefits."
Wal-Mart opens about 220 "supercenters" a year - large discount stores with grocery stores attached, said Andrew Wolf, a retail analyst for BB&T Capital Markets in Richmond, Va. The supercenters are typically in suburban and rural areas, he said. Wal-Mart said it has five supercenters in Maryland, none of them in Baltimore. That's not nearly as saturated as in Virginia and Pennsylvania, where it has about 60 apiece, Wolf said.
"They do a lot of business, and they are opening more stores than anyone else," Wolf said.
But the unionized grocers' struggle to adapt benefits and wages to compete with Wal-Mart also represents a shift in employer attitude, said Bill Barry, director of labor studies at the Community College of Baltimore County. It used to be that nonunion employers would adopt the wages and working conditions of union companies, spreading unionism beyond its members. Now, the opposite is true, he said.
"For decades, the unions have set the tone for all of society and established things such as paid vacations as 'normal,'" Barry said. "What we're seeing now, probably due to the decline of unionism, is things that were always considered normal are now up for grabs."
The union argues that Giant and Safeway have a marketplace advantage over stores such as Wal-Mart because of the quality customer service its workers provide.
"If Safeway thinks it can compete against Wal-Mart by chasing them to the bottom, they will never win," said Denier, the union spokesman.
California strike
In Southern California in October, about 70,000 members of the United Food and Commercial Workers went on strike for five months at more than 850 stores owned by Safeway, Albertsons Inc. and Kroger Co., owner of Ralphs. By the time the strike ended weeks ago, the businesses had lost an estimated $2.5 billion in revenue and workers had forfeited five months of wages.
Neither side wants a repeat of that in the Baltimore-Washington area. Given the sums lost, neither side came out a winner in California, analysts said. The terms of that settlement, however, could set the standard for what employers here and elsewhere expect to gain and how much supermarket workers are willing to give up.
"It may well be that the battle was fought out in Southern California and that a pattern was set that will enable the parties in other places to settle," Clark said.
The California grocers didn't get near the relief they sought in terms of wage and benefit concessions to better compete with Wal-Mart, analysts said.
The union, which resisted cuts in health care for many of its members, agreed to a structure in which new workers would get fewer benefits than existing employees. Unions typically dislike such "two-tier" arrangements because they create two classes, with new employees receiving fewer benefits and lower pay than existing workers who do the same job, Clark said.
"They took such big hits in that strike," Clark said, referring to the supermarkets and the union. "It's kind of like two boxers who have gone 15 rounds. They're just exhausted in a sense, and I don't know if either of them can afford to take another punch."
Landover-based Giant Food is a unit of Royal Ahold NV, the Dutch supermarket conglomerate that has been struggling after an accounting scandal at its Columbia-based food distribution subsidiary US Foodservice Inc. Ahold may not be able to weather a lengthy labor battle, said Wolf, the retail analyst.
Ready 'to stand up'
Area Teamsters, the union that represents truck drivers who deliver food and other items to Giant and Safeway, have said they would honor a strike by not crossing the picket line for deliveries. The supermarkets say they will be able to operate and keep their shelves stocked in any event.
Mike Nelson, 39, has worked at Safeway since high school. He has tried his hand in nearly every department at 10 stores - a career that's enabled him to buy a nice home and support his wife and three children.
But lately his days have been filled with "a lot of tension," he said. Nelson, who works at the Safeway on North Charles Street in Baltimore, says his coworkers are upset about the negotiations and are willing to fight for their benefits.
"They're willing to stand up for what they believe in," he said. "They're willing to go on strike."
Posted by UFCW 227 at March 27, 2004 03:03 PM