3/28/08

UFCW takes dues hit

After working at the Western Grocers warehouse for more than 20 years, Wayne Sansom decided he would spend the rest of his career at the Melville Street facility. But an announcement Wednesday by Loblaw Cos. Ltd., the company that owns and operates the warehouse, has put a serious dent in Sansom's long-term plans.

Now Sansom and more than 300 other Western Grocers staff will have to find new employment by the time the warehouse closes in 18 to 24 months. Sansom says he and his co-workers were caught off-guard by the news.

"There's a few people who are probably not so much disgruntled, but hurt," said Sansom, a forklift operator. "There's kind of a lack of motivation right now, which is understandable I suppose."

While there had been threats to shut down the distribution centre in the past, the announcement that the Saskatoon site would permanently close in favour of a new warehouse has a new tone, Sansom said. Most Western Grocers employees, he added, are still thinking about what the closure of the centre means, and for now the workplace atmosphere is unusually quiet.

"They've said things like that for years, but usually it's just been a negotiation scare tactic -- 'If we don't turn it around we're going to shut it down,' " Sansom said. "I don't think this is a scare tactic, this is pretty much set in stone."

According to the company, the closure of the Saskatoon distribution centre is part of Loblaw's overall business strategy. Elizabeth Margles, vice-president of communications, said the company -- which also operates the Superstore grocery chain -- has a multi-year plan to upgrade Loblaw's supply chain capabilities.

A new warehouse, to be operated by a third party, is set to be built somewhere in the province to replace the Saskatoon facility, she said. Margles could not be more specific on a location for the new distribution centre.

"Our business plan is to make the supply chain as efficient and effective as possible, and to do that we will be transitioning the Saskatoon DC (distribution centre) over the next 18 to 24 months and will open up a new one that will be managed by a third party," she said.

Severance packages, along with one-on-one discussions about the closure, will be offered to employees, said Margles.

"We have a very thorough plan in place to support them through this transition. That's the reason why this is happening over 18 to 24 months; this is not something that's happening imminently," she said. "We want to help them be prepared for it. We want to take care of them and help them the best we can."

Meanwhile, the president of the union that represents the warehouse employees, United Food and Commercial Workers (UFCW) Local 1400, wonders why the company decided to close the warehouse so soon after the two groups completed a new collective agreement. Paul Meinema plans to ask Loblaw representatives when they decided to close the facility at a meeting between the union and the company on April 2.

"We're very upset with the way that this has come about because we just concluded a new collective agreement this past June. We believe the company must have known about it then, and we have several questions that we want to ask the company and obviously a lot of other issues that we need to discuss," Meinema said.

The union leader said he has heard from several upset employees since the Ontario-based company made the announcement this week. Meinema said he and the UFCW team will be looking into options, legal and otherwise, through the collective agreement and the labour code to help members.

Saskatoon isn't the only area to see Loblaw cut back on jobs, said Bob Gibson, a retail analyst with Octagon Capital Corp. in Toronto. The company has been streamlining its supply-chain model to compete with Wal-Mart, he said.

"They've been having a lot of problems with their supply chain," he said. "You've got to . . . cut costs wherever you can so you can remain competitive and keep their prices down because you're competing against Wal-Mart. That's what it is, it's rationalize the business -- and as that's happened, of course, there's problems that crop up because nothing ever runs as smoothly as you'd like it to."

(canada.com)

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