10/31/07

UFCW set to strike, Kroger to use replacements

Loyal Kroger customers braced for a weekend strike today as the company and its unionized workforce of 11,000 associates showed no change of heart on demands for higher wages, a fully funded pension and more from the company for health care.

Though the company and UFCW 1099 claim they wanted to return to the bargaining table for a renewed round of negotiations, the only movement today came when hundreds of union sympathizers prepared to gather on Fountain Square.

“No way am I going to shop at Kroger if there’s a strike,” said Denise Penn, a 36-year-old College Hill resident and teacher at Douglass School in Walnut Hills. She is a union member of the Cincinnati Federation of Teachers and will find someplace else to buy her groceries. “We union members have to look out for each other.”

But that feeling was not universal. Dave Mahaney, 68, Fort Thomas, could care less about picket signs in front of stores. “It won’t stop me,” he said. “You gotta eat.” In the parking lot outside the Bellevue Kroger, Betty Detmering, 75, said she, too, would keep shopping at Kroger. “It’s close to my home. I’ll be here,” she said.

Kroger company officials also turned up the heat when it distributed a two-page question and answer information sheet that suggested that workers should quit their union if a strike was called.

The memo indicated that workers who resign from their union would keep the same wages, maintain seniority and could cross picket lines.

“I think they’re trying to break the union,” said Audrea Landrum, 68, of Independence, Ky. She is a part-time worker at the Independence store as a bakery helper.

“One young lady I work with is eight months pregnant with her first child. Her husband just got fired from her job and she was told if she didn’t cross the picket line and come to work, she would have no insurance,” Landrum said.

“When I heard that it just made me so angry, and it sure doesn’t show much respect for workers. Already there’s a lot of hurt feelings.”

Contract talks ended Sunday with the union announcing on Monday that a 30-day contract extension would end on Friday at midnight. When that extension ends, the union has been authorized by the rank and file to call a strike. Kroger responded that it would seek replacement workers.

Experts say what’s at stake for the company and its workers if a strike occurs is that some shoppers may venture into a Kroger competitor, enjoy the experience or prices and, suddenly formerly loyal customers find that a stop-gap store has become a favorite.

And if that happens, it may be years before Kroger recovers its marketshare from competitors.

“This is one town Kroger doesn’t want to lose,” said Richard Bales, a labor law expert and professor of law/associate dean for faculty development at the Chase College of Law at Northern Kentucky University.

“If they have homefield advantage, it’s here. The last thing they want is a headline that Wal-Mart is beating them on their home field.”

Union workers will also feel intense pressure as the deadline nears and even greater stress if they go on strike. Household budgets for those workers will be slashed.

“If Kroger is able to bring in strike replacements, it will be painful for workers to see jobs being done by somebody else,” Bales said. “The economy isn’t great, so it’s going to be awfully tempting for folks to cross the picket line and work.

“A strike ratchets up the pressure on both sides.”

Another threat for the company in the event of a strike comes if truck drivers who are members of another union refuse to deliver because of pickets.

“If they’re union, they are likely to honor the picket line,” Bales said. “Kroger then has more difficulty filling its stores and stocking shelves.”

Doug Sizemore, executive secretary treasurer of the Cincinnati AFL-CIO, said there are 130 local unions representing about 100,000 people in the region and those households support the UFCW local.

“Already people are watching this and letting Kroger management know when they go into stores that they’re dissatisfied with the way these negotiations are going,” Sizemore said.

Kroger officials know the stakes are high, too.

Supermarkets such as Kroger make about two cents profit from every dollar spent, which leaves grocers more vulnerable to the whims of broad economic trends and selective consumer spending than many other retailers.

When a two-day strike hit a distribution warehouse near Louisville earlier this year, Dillon told Wall Street investors that it cost the company two cents a share on earnings in the first quarter - about $11 million a day.

Replacement workers were used in that incident.

And a 141-day California lockout in 2004 led to a $947 million write-down for the company.

In the wake of that dispute, Kroger Co. paid $70 million in fines and worker restitution under an agreement stemming from criminal charges that its Ralphs Grocery Co. subsidiary illegally hired workers under fake names.

As part of the deal with federal prosecutors, Ralphs pleaded guilty to conspiracy and identity fraud as well as violating laws involving employee benefits and record-keeping for the Social Security Administration and Internal Revenue Service.

Meghan Glynn, company spokesperson, said Kroger distributed the memos not in an effort to break the union but to inform its workforce that in the event of a strike, company-paid healthcare coverage would cease unless they keep working.

“We have a long relationship with UFCW,” she said. “But actions this union has taken lately, well, we want to make sure our employees have the facts.”

Interviews of replacement workers have occurred. “We have replacement workers ready to go if it comes to that,” Glynn said.

(news.enquirer.com)

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