Giant, Safeway workers approve 4-year contract Pact is wage-poor, but benefit-rich

September 17, 1992|By Michael Dresser | Michael Dresser,Staff Writer

Workers at Giant Food Inc. and Safeway Inc. stores in the Baltimore area voted overwhelmingly yesterday to ratify a wage-poor but benefit-rich labor contract after an early-morning breakthrough averted a possible strike.

Employees at Giant, the dominant grocery chain in the Baltimore market, approved the company's new four-year contract with the United Food and Commercial Workers union by a margin of 2,006 to 615 yesterday afternoon, a few hours after Safeway workers voted 437-12 to ratify a similar pact.

Constrained by a weak economy and falling grocery store profits, the union accepted significantly more modest wage increases than in its last round of talks in 1989. However, it gained enough in benefits that UFCW Local 27 President Thomas Russow declared the contract a victory.

Giant, too, seemed pleased with the agreement. "Giant was successful in eliminating some working restrictions that will make it more efficient for us to operate," said spokesman Barry Scher, citing the elimination of language requiring that a meatcutter be on duty overnight at 24-hour stores.

A Safeway spokesman could not be reached for comment.

The agreements set a pattern likely to be followed by other grocery chains that deal with the UFCW. For instance, the Super Fresh chain also has a union contract expiring, but that pact was extended during the Giant and Safeway talks.

Local 27 represents about 6,200 cashiers, meatcutters, store department managers, pharmacy and bakery clerks and other employees at Giant's 42 stores in the Baltimore area. Safeway, with 14 area stores, employs about 1,000 union members locally.

Mr. Russow said the negotiations were the toughest he has seen the grocery industry. By late Tuesday night, most of the key wage and benefit issues were settled, but talks hung up on two points: an extra personal-leave day and work rules involving meatcutters.

Early yesterday morning, it appeared the union was on the verge of bringing back the companies' final offer without a recommendation -- an action that would have put ratification in doubt.

However, the union leader said that shortly after the union's bargaining committee left the hotel where the talks took place, he received a call from Giant chief negotiator Roger Olson saying Mr. Olson and Safeway's representative were ready to discuss the two issues.

By 2:30 a.m., the two sides reached an agreement the bargainers could recommend, Mr. Russow said.

Workers at the two chains had been facing the possibility of a strike Sunday morning, when the contracts were due to expire. The ratification votes were held early because talks were coordinated with those involving Washington's UFCW Local 400, whose contract expired last weekend.

The Washington local ratified contracts with Giant and Safeway yesterday, avoiding a strike that could have started immediately after the vote.

Both the Baltimore and Washington negotiations took place in the shadow of a prolonged economic recession and fierce competition that have taken a brutal toll on grocery industry profits.

Giant, which maintained some of the most sparkling profit margins and impressive earnings gains in the industry through most of the 1980s, has slogged through five straight quarters of earnings lower than the comparable period the year before. Other grocery stores, with less room for error than Giant, have suffered comparable declines.

The wage settlement was modest indeed. A fully experienced food clerk hired since 1982 earns $12.55 now and will receive a raise of only 25 cents this year and 35 cents each of the following three years -- an increase of $1.30 over four years, for an average of about 3 percent a year.

Employees hired before 1982 will receive even smaller increases, an average 1.5 percent a year, as the union and companies move to phase out a two-tiered wage scale.

By contrast, the 1989 contract provided a typical raise of $1.90 a year over three years.

Mr. Russow said one reason the wage settlement was so low was that "we put our money into benefits and job security." He said the union made "substantial" gains in pensions and health and welfare benefits -- both for current workers and retirees.

The union president said the price tag on improvements in the pension plan will amount to about $70 million over the course of the agreement, while health and welfare enhancements would cost about $94 million. The costs would be borne by all participants in the plan, including Super Fresh, he said.

Mr. Russow said the companies had won few significant givebacks.

Most union members seemed satisfied with the agreement.

"I feel good about it," said Bryan Caudle, assistant manager of Safeway's Pratt Street store. "We saved a lot for the retirees, and the co-payments [on benefits] are way down."

At least one group of employees was disgruntled, however.

Giant courtesy clerks, the employees who help load bags into cars and assist in bagging, received only a 40-cent increase over four years. "It's really like not getting represented in this union at all," said Drew McMahon, a clerk in a Reisterstown store who voted to reject the contract.

Local 400 represents about 12,000 Giant and 6,000 Safeway workers in Washington and its suburbs.

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