Farmer Jack Employees Make No Concessions
By George Anderson
Even Victoria Collins can not believe that employees of Farmer Jack voted to reject a 10 percent cut in pay and other concessions that would have made it possible for The Great Atlantic & Pacific Tea Co. to sell the embattled chain.
Ms. Collins, president of the United Food and Commercial Workers (UFCW) Local 876, said in a recorded statement: “It is unfortunate when a small percentage of the members make
a decision, which will impact the livelihoods of thousands, seek other avenues to dispose of Farmer Jack … several of which could cost members their jobs or benefits.”
While no buyer has been formally identified, speculation has been that Spartan Foods may have an interest in acquiring Farmer Jack.
A report in the Detroit Free Press, said that had the agreement been approved, it would not have taken effect until an offer had been made for Farmer Jack.
Moderator’s Comment: What does the “no” vote on wage and benefit concessions by members of Local 876 of the UFCW mean for Farmer Jack and its employees?
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George Anderson – Moderator
It is unfortunate that, for many, Union has become synonymous with unproductive, overpaid workers, and work rules that make companies uncompetitive.
History repeats itself. Safeway workers wouldn’t take a pay cut and that decision marked the first exit by Safeway from Texas and Oklahoma almost 20 years ago (with a lot of empty buildings and bankruptcies by companies who bought many of the locations).
I don’t blame the workers alone. For all we know, poor strategic and tactical decisions by management are as much to blame for an unprofitable enterprise that is up for sale.
Or maybe it is the realization that the pressure applied by supercenters and competitors make a union shop wage structure and work rules truly uncompetitive. There is too large a gap between the aisle clerk and CEO wages, but that isn’t the issue here. If you can’t sell products and make a reasonable profit given the risks inherent in running a retail operation, then nobody in the organization has a job. It’s really just that simple.
If Ms. Collins would drop the arrogance and say what company the union is dealing with then perhaps the union members would be able to make an intelligent vote.
How can any union member decide what to do when they don’t even know who their employer will be? They might be willing to take a pay cut if the new buyer is a financially strong company that will offer job security and capital improvements. On the other hand, if the buyer is a group of poorly financed investors who are simply paying a premium price to A&P in exchange for cheap labor, with no intention (or ability) to operate the stores long term, then why take another pay cut only to be told you will lose your job in a year? Union members should keep in mind that the competition, like Kroger and Meijer, hope that A&P sells the stores for a high price to an incompetent operator. The union needs to name the companies they are dealing with so members can understand what they are really voting for.
If you think Farmer Jack is doing poorly now, most likely any company who buys them will see an additional 20% drop in sales. Starting out with a low paid work force with poor morale is a recipe for disaster. The best thing for the employees would be to have A&P sell the stores cheap to a proven operator who will pay decent wages. I’m sure A&P and their investment bankers only want the highest price and a low wage labor contract might get them their price. Legitimate buyers who are serious about operating the stores long term are probably making low-ball offers because they know the financial realities of acquisitions.
A quick response to Mark’s comments. The union situation here isn’t quite so cut and dried. Meijer workers are represented by a local out of Grand Rapids, not the Detroit-based 876 and already work with a different contract. Of course, always going back to the labor well is a time-tested way for management to make up for poor business decisions. One could also argue (assuming you could find someone naive enough to take the counter position) that A&P single handedly destroyed Farmer Jack. However, the fact remains it is destroyed and faces competition from both chains with different collective bargaining agreements and — in the city itself — and almost completely non-unionized workforce. I have sympathy for workers constantly hammered into concessions, especially when the performance problems of the company can be traced to management, but I’m not sure these guys have real robust options.
It’s puzzling for sure to see union leadership, especially in Detroit, to be defied and their recommendation turned down. The union’s recommendation couldn’t have been any more clear.
It was, however, pointed out in some media reports that there was a very low turnout in those that voted and the margin of the ‘no’ vote was very small. Possibly in short time, as a the reality approaches, the membership, who might not be fully engaged, will become more active and a new vote could occur. Although, in Detroit, when it comes to union activity, nothing is predictable.
Hard to say what happens from here. Nevertheless, it doesn’t bode well for the employees of a chain with a certain fate. Change is a ahead for them. Seems to me, maybe it needs be better explained to them. But then again…
It means the spirit of idealistic trade unionism is still alive here in the Motor City. It also means Spartan may have to wait until A&P shutters the stores and those workers drift off to find other jobs. For Local 876 it might well mean eventual decertification since (living here) it’s my bet that sooner or later enough people will want those jobs that they’ll be happy to throw the union out. Remember, while this is a city with a strong union heritage, it is also a city bearing witness to a massively futile Northwest strike, a strike in which even other unions aren’t hesitating to cross picket lines. Sure, this is tough for A&P and Spartan, but in the end it may prove fatal to Local 876.
To me, it just says that the union members figure the economy is strong enough that they can do as well or better elsewhere. I assume they’re smart enough to realize the potential consequences here.
It can be stupid to keep standing on the same stop on the curb cheering and supporting a parade that has already past by. Time marches on. Things change. And Farmer Jack hits the rack.
The moral: Stay in cadence.
I do not live in Michigan, so my knowledge of the details is very limited. However, the employees already reduced their compensation a while ago, and were again asked to do it, without any concrete details regarding the future. Clearly the union leadership and the A&P management failed to sell enough people. Although the union president mentioned that the voting was close, the newspaper article mentioned that the turnout was low. The low turnout shows that the selling job was poor. It is hard to give people a sense of confidence when you “go to the well” more than once and they don’t know anything about the alleged deal the company is negotiating. If Farmer Jack has to close some locations, it may help the remaining grocers survive, and they have not cut their compensation. The best way for the union to help preserve their members’ jobs is to organize the nonunion competition (WM, Target, etc.) ASAP.