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Settlement Near in Grocery Strike

Times Staff Writers

Grocery store and union negotiators neared a deal Wednesday to end the California supermarket strike and lockout, according to people familiar with the talks.

A settlement could be reached as early as today, they said, although they cautioned that negotiators continued to struggle with certain aspects of the contract they were sketching out under the supervision of a federal mediator.

The deal on the table would trim supermarket employees’ health benefits and create a second tier of new workers who would earn less than those hired before the dispute began, according to sources who know the rough details of the proposed contract.

Negotiators for the UFCW and the companies -- Albertsons Inc., Kroger Co., which owns Ralphs, and Safeway Inc., the parent of Vons and Pavilions -- met into the night Wednesday. It was their 15th straight day of talks aimed at ending a dispute that has cost the companies combined sales of about $1.5 billion, inconvenienced millions of consumers and left tens of thousands of people without steady work for nearly five months.

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Union and company executives said they couldn’t comment on any progress made, citing a news blackout imposed by Peter J. Hurtgen, head of the Federal Mediation and Conciliation Service. And the UFCW leadership urged the rank and file not to leave their strike posts.

“Do not be misled by rumors or false information that a settlement has already been reached,” UFCW Local 770 in Los Angeles said on its website.

But word about a possible breakthrough raced up and down picket lines.

“I’m feeling cautious optimism,” said Ed Tillerson, a strike captain in Riverside County. “I’ve gotten my hopes up before and they have been crushed. I’m waiting for some good news.”

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In Pacific Palisades, where strikers carried umbrellas along with their picket signs to fend off the rain, the buzz had started late Tuesday, when an official from UFCW Local 1442 left a message on the union hotline saying he hoped to have “good news” to report Wednesday. Stories fast made the rounds: One picket captain in the Inland Empire told his troops that the UFCW was arranging to rent meeting space that could serve as a polling place for union voters Saturday and Sunday.

“There have been rumors since Day One,” said Kim Mosher, a union representative for Local 770. “Until I see something in writing, I’m not going to get my hopes up.”

Any new contract would have to be ratified by union members.

At the daily sessions of the latest round of talks that started Feb. 11, the two sides have come to terms on key issues, the sources said. The UFCW has accepted the two-tier system under which newly hired employees would receive lower wages and lesser benefits than the 59,000 union members in Central and Southern California who were idled when the strike and lockout began, people close to the talks said.

Sources also said the two sides were considering a wage hike for employees hired before the dispute began, or at least providing them with two lump-sum payments during the contract. In the last formal offer from the companies, made Dec. 2, there was no pay increase.

Under the contract that expired last year, a top-scale cashier earned $17.90 an hour, and more on Sundays and holidays. Under that contract, according to the union, the average grocery worker earned $13 an hour and didn’t put in a 40-hour week.

Negotiators also were debating whether employees should pay for some of their healthcare coverage, which always had been fully funded by the companies. Sources said the negotiators also were considering whether to cap the companies’ contributions toward the workers’ healthcare coverage at a certain level.

The UFCW has long insisted that the supermarkets’ efforts to lower their health benefits contributions would make coverage virtually unaffordable for union members.

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The UFCW has been on strike against Vons and Pavilions since Oct. 11. Ralphs and Albertsons, which are bargaining jointly with Safeway, locked out their union workers the next day.

As the strike and lockout have dragged on, the pressure on both sides to settle has mounted. This week, UFCW Local 1442 became the last of the seven locals in the dispute to cut strike pay for picketing workers. The Santa Monica-based local’s 3,800 members had been averaging $240 a week; now they average $125, said Local 1442 President Michael Straeter. He said the local had to make the move after 19 weeks “to stay in the fight.”

With a labor battle as long and bitter as this one, labor market and consumer experts said, workers’ morale could suffer when they return to work. That could pose a challenge for the supermarkets in their effort to lure shoppers who have been avoiding picketed stores.

“Not only do they have to work on the morale of the people” returning to work, “but they have to manage the perception of their customers,” said Imran Currim, a marketing professor at UC Irvine. It’s important that consumers perceive there was “an amicable settlement because that may impact the speed to which people go back” to their old stores, Currim said.

Some shoppers said they wouldn’t need to be wooed and were relieved the strike might soon be over. The Vons in Echo Park was “the place I went to all the time,” said John Kilduff, a 38-year-old artist. “I am definitely looking forward to going back.”

A swift recovery of regular shoppers is viewed as vital for the grocery companies. They are forgoing combined sales of roughly $10 million every day, based on figures from the companies and financial analysts.

In last year’s fourth quarter, Safeway alone chalked up more than $600 million in lost sales, analysts estimate. Kroger and Albertsons are due to report their fourth-quarter results March 9.

Times staff writer Ronald D. White contributed to this report.

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