Supermarket Industry’s Peacemaker Gets the Ax Quickly

Lucky Stores’ approval of a $2.5-billion takeover by the owner of the Alpha Beta grocery chain is yet another deal made by financial manipulators with no apparent concern about the drastic consequences that workers can expect.

The mergers and acquisitions that have swept the nation in the past few years usually have meant massive layoffs and attempts to slash wages and benefits as deal makers try to reduce huge debts accumulated in the frenzied transactions.

Lucky and Alpha Beta employees better brace themselves for similar treatment from manipulators looking for ways to pay for the high cost of the Lucky takeover.

The impact of the Lucky-Alpha Beta deal may be even harsher on the firms’ employees because of the strange, brief career of Anthony Verdream as president of the Food Employers Council, which represents the diminishing number of supermarket chains in California.

The Verdream story might also have negative implications for the future of labor-management cooperation around the country.

Verdream, who has an excellent national reputation as a peacemaker between unions and management, was hired to head the powerful employer council early last month.

He was fired 19 days later.

Verdream and council executives are still discussing financial terms for his departure, so none of them want to publicly discuss the surprise move.

There has been speculation that some food industry personnel executives were startled to find, when Verdream took over as president, that he really wanted to end destructive adversarial relations between labor and management. Instead, he wanted to encourage cooperation and worker participation in corporate decision making.

Those industry officials were said to prefer the old “let’s fight” approach.

But an informed employer being surprised to learn about Verdream’s wise labor-management philosophy is like a movie producer being surprised to learn about Fred Astair’s ability to dance.

Verdream’s entire career with such major corporations as A&P; and American Can Co. was built on his effort to end the traditional, confrontational style of labor relations.

And he was hired as council president only after an exhaustive search that was aided by the well-known executive search firm of Korn Ferry International. Still, some sources said, while the top executives knew about Verdream’s reputation as a non-confrontational sort, some were, as one put it, “surprised that he really meant all of his preachings.”

Others, who also don’t want to be identified, said that some labor relations executives for individual food chains carefully listened to Verdream’s philosophy for the first time during a meeting shortly after he was hired.

According to this report, the second-echelon executives decided he was too much of a peacemaker in his dealings with the unions in these turbulent times. They reportedly passed along their views to their chief executives, who then reversed themselves and dumped Verdream.

Still others say Verdream was dismissed abruptly because he used bad judgment by trying to move too quickly from an adversarial to a cooperative system.

Others were reportedly annoyed because he immediately raised questions about the substantial salary and legal fees paid by the council to Joseph McLaughlin, who has replaced Verdream as council president and has been associated with it as an attorney and sometime president since 1955.

McLaughlin, according to one estimate, earns several hundred thousand dollars a year--some say much more--serving as acting president off and on for about four years and as attorney for both individual food companies and the council itself.

Yet another reason suggested for Verdream’s dismissal was the unhappiness caused in some council members when they found out that he was going to use Robert K. Fox as an adviser in labor relations.

Fox retired in 1983 after holding the council presidency since 1948. While he was admired by management during his long tenure in office as a tough executive, some food executives were said to believe that Fox has become too conciliatory since his retirement and would be a handicap now.

Whatever the real motive for his dismissal, unfortunately Verdream’s ideas for achieving labor-management peace didn’t go over well enough with the food industry executives to offset the antagonisms that developed so suddenly.

Rick Icaza, president of the UFCW Local 770, said he and other union officials had heard about Verdream’s ideas for ending “crisis bargaining”--settling contracts at the last minute after around-the-clock negotiations--and his non-confrontational approach to labor relations.

“We were hoping he would make some much-needed changes and help heal the wounds that are still there after the nine-week strike that meat cutters and Teamsters had to call in 1985 to avoid major losses for workers,” Icaza said.

As for now, McLaughlin is in charge of the industry’s negotiations with the unions as he was at the time of the last big strike.

His long experience could help avert a walkout, but the sudden shift in the employer council leadership may make his task more difficult.

The problems facing the Southern California food industry workers go beyond this region. Sadly, the apparent rejection by management of Verdream’s philosophy could slow the spread of the cooperative spirit around the country.

Moreover, no workers can expect management generosity in the turbulent setting that comes almost automatically when companies are taking over one another, in either a friendly or a hostile manner.

Rarely involved directly in union contract negotiations are the enormous expenditures for takeovers. They include such things as leveraged buyouts, costly “golden parachutes” for discarded executives, handsome fees for lawyers, accountants and investment bankers and “greenmail money” to persuade hostile raiders to go away.

But these crucial issues indirectly but strongly affect the outcome of negotiations over wages and benefits of workers who are trapped and pay a heavy price for the complex financial maneuvers of their employers who are involved in corporate guerrilla warfare.

The United Food & Commercial Workers Union or the Teamsters could strike soon if the chains push too hard for contract concessions to help pay for the many recent acquisitions in the food industry.

Once again, the workers almost surely are going to be the victims of corporate warfare.

L.A. Labor Leader Courts Political Role

The Rev. Jesse Jackson, who is ardently courting support from organized labor, was praised warmly by William R. Robertson, the politically influential head of the Los Angeles County Labor Federation, when the union leader introduced the presidential candidate to a labor audience of more than 500 on May 6.

In fact, the introduction was so warm and appreciated that when Jackson and his rival, Massachusetts Gov. Michael S. Dukakis, met for a debate in San Francisco last Wednesday night, Jackson threw his arm around Robertson and claimed he had the labor leader’s support.

Dukakis laughingly snapped back, “You won’t have it after the Democratic convention.”

Actually, Robertson has made no endorsement for president, in line with the no-endorsement-yet policy of the national AFL-CIO, which will endorse the candidate picked at the Democratic convention.

When he introduces Dukakis to a labor breakfast here Friday, he will be as warm as he was to Jackson.

But Robertson is considering a move to publicly throw his support--but not a formal endorsement--to Jackson, enabling the labor leader to go to the Democratic convention in Atlanta in August as a Jackson delegate.

Some naturally may see the action as an indication that the Los Angeles union official prefers Jackson over Dukakis, which could hurt Robertson with Dukakis supporters.

But his motive may be to just find a way to get another union delegate to the convention. Presumably, it will be easier for him to be named as a Jackson delegate.

The AFL-CIO estimates that, as in 1984, there will be about 600 union delegates to this year’s convention, although union leaders are trying to get more. By increasing the number of their delegates, unions can help keep a relatively progressive agenda for the party.