Stalled grocery talks to resume
Talks between Southern California’s three major supermarket chains and a union representing grocery workers, which were abruptly halted Wednesday, are expected to resume in a little more than a week.
United Food and Commercial Workers union representatives said Thursday that they left the negotiating table after Albertsons, Ralphs and Vons declared they would lock out union workers if any one of the companies was struck.
“We walked out in protest,” said Rick Icaza, president of UFCW Local 770 in Los Angeles. “But we are going back. We want to settle this.”
Negotiation details are under a news blackout at the behest of a federal mediator, but individuals familiar with the situation said the two sides were scheduled to meet again April 16.
Although the verbal barbs being traded by the two sides make it seem as though Southern California is careening toward a strike like the one that turned grocery shopping into chaos more than three years ago, any potential work stoppage is weeks away.
Here’s a look at the likelihood of another strike and lockout and the issues behind the negotiations.
What is the earliest day another strike or lockout could occur?
Technically, the region could see a strike or lockout take shape April 13. The timing is dictated by prior contract extension agreements. But with talks resuming April 16, a strike is unlikely anytime in the next two weeks.
Union members have authorized a strike against Albertsons, but the UFCW has not set a date. The union also hasn’t made any effort to take strike authorization votes against Ralphs and Vons.
What happened in the last strike?
When the UFCW struck Vons on Oct. 11, 2003, Albertsons and Ralphs refused to let their unionized workforce enter their stores. The companies remained open with the help of management and replacement workers.
The 141-day strike created jammed parking lots and long checkout lines at retailers that were unaffected by the labor dispute, including Stater Bros. and Trader Joe’s.
What’s the likelihood of a strike happening again?
At this point, everyone from UFCW activists to Wall Street analysts are downplaying the chances of a strike.
Goldman Sachs analyst John Heinbockel points out that there have never been back-to-back strikes “in the annals of food retail negotiations.... The appetite for a fight usually isn’t there.”
Any strike, if it happened, is a long way off, said Michael Shimpock of SG&A; Campaigns, a Pasadena media and political consulting firm hired by the United Food and Commercial Workers union to speak about the talks.
The employers said they remained “committed to working toward a peaceful settlement.” But one industry executive placed the chances of a strike at 60%.
What’s this all about?
Basically, wages and benefits, especially health insurance for workers.
The current contract, signed three years ago after the bitter 141-day strike and lockout, divided the unionized supermarket workforce into two groups.
Veteran workers received small wage bonuses and kept favorable health benefits. But the deal created a second tier of workers: people hired after the contract was signed.
These workers receive lower wages and benefits. For example, a new hire must wait at least 12 months, sometimes longer, to become eligible for health insurance. The waiting period for family coverage is 30 months.
The 65,000-member workforce is split almost evenly between those two groups. The union wants to get a better health plan for the new workers and is pushing for a pay scale track that gradually elevates all employees to first-tier benefits.
The employers said they liked the current system because it lowered their labor costs and made them more competitive with discount retailers.
What’s different from last time around?
Replacement workers. In 2003, the chains prepared for the work stoppage by hiring substitute workers starting six weeks in advance.
There’s no indication they are doing that now. Moreover, the grocers say they are not stocking up on goods in anticipation of a rush by strike-fearing consumers who want to stockpile.
What’s the same from last time around?
The mutual-aid agreement among Albertsons, Ralphs and Vons. The agreement calls for the lockout of employees from the three chains within 48 hours of a strike against any one of the companies.
The agreement also calls for the chains to provide financial assistance to any of the companies struck by the union.
Kroger Co., which owns Ralphs and the Food 4 Less chain in Southern California, paid a combined $146 million to Vons and Albertsons during the last work stoppage, according to the California attorney general’s office.
That money helped those companies to hold out during the long work stoppage, according to union officials and labor analysts.
But the deal might not have been legal. The state has sued the chains, alleging that the agreement violated federal antitrust laws. The employers insist that this type of agreement is legal. The companies said this latest pact did not allow for revenue or profit sharing, but they declined to disclose the terms of the financial assistance.
Should I begin stocking up on food and other packaged goods?
That’s a choice you have to make based on your budget and cupboard space. But consider this: Combined, Albertsons, Ralphs and Vons sell about half the groceries bought every year in Southern California.
Still, there are more choices now than three years ago. Most Targets sell packaged food and even have a frozen food section.
Many drug chains and convenience stores also sell packaged goods and have refrigerated milk cases. There’s always Costco, Wal-Mart, Trader Joe’s and Stater Bros., stores that were jammed during the last work stoppage.
How many stores might be involved in the work stoppage?
More than 65,000 members of the UFCW work at a combined 785 Albertsons, Vons and Ralphs stores from Bakersfield to the Mexican border.
Vons has 274 stores, Ralphs has 262 and Albertsons has 249.
Two other local chains, Stater Bros. and Gelson’s, which together control about 12% to 15% of the grocery market, signed labor agreements this year and would not be struck.
