Crown lockout is over

pact OK'd

Union proclaims victory as labor rift ends after 5 years

January 18, 2001|By Kristine Henry | Kristine Henry,SUN STAFF

After a nearly five-year lockout and a vitriolic war of words, union members from Crown Central Petroleum Corp.'s refinery in Texas approved a new contract with the Baltimore-based company yesterday.

The Paper, Allied-Industrial, Chemical & Energy Workers Union International (PACE) did not release precise vote totals, but Joe Drexler, PACE's director of special projects, said the contract was approved by "a very healthy margin."

The approval came nearly three months after the workers rejected an earlier Crown contract 3-to-1.

"We view this as a victory because we are going back into the refinery with a union contract and our basic rights in place," Drexler said.

The new contract differs from the one voted on in October, in that it stipulates that aptitude tests for returning workers will not determine whether they will be accepted back and it allows all workers to have a clean slate in their records of absenteeism, said Mickey Breaux, a PACE representative who worked on the negotiations.

The contract provides for wage increases of about 11.5 percent over the next 13 months and job-security provisions that ensure workers can keep their jobs even if Crown is sold. Members will start returning to the refinery in the next few weeks, Drexler said.

"Crown is extremely pleased that the labor dispute has come to an end," Crown Chairman Henry A. Rosenberg Jr. said in a statement. "It is our intention to move as quickly as possible to return these employees to work. We look forward to a renewed and mutually beneficial relationship with the union."

Crown locked out 252 workers from its Pasadena, Texas, refinery in February 1996 after a breakdown of negotiations over a new contract. Crown accused union members of sabotaging the plant, a charge the union denies.

Over the past five years, the union has waged a bitter campaign against Crown, urging people to boycott its gas stations and even bringing a 20-foot inflatable rat -- dubbed "Henry the Rat" with a nod to Chairman Rosenberg -- to a shareholders meeting in August.

The boycott will end with the new contract.

Union members also have been involved in lawsuits against the refiner. Eight former Crown employees filed a class-action lawsuit against the company in 1997, alleging racial and sexual discrimination. A judge denied the plaintiffs class status in November, and Crown has denied the allegations.

A PACE member, who is a shareholder too, also filed a lawsuit alleging that Crown's board is not working in the best interest of its stockholders.

That suit came after Crown said in March that it intended to let a holding company called Rosemore Inc., owned by the Rosenberg family, buy all outstanding Crown shares at $8.35 each and take the company private.

That was a 13 percent premium on stock that was trading at $7.38, but still far less than the $36 a share the stock commanded in 1989 before it began to fall.

Before Crown's board could vote on the measure, a rival oil company from St. Louis, Apex Oil Co., stepped in and offered $9.20 a share. The two increased their offers companies incrementally, with Apex ultimately offering $10.50 a share and Rosemore offering $9.50.

Crown's board accepted Rosemore's lower offer, but shareholders said no in August.

Last month, Rosemore increased its bid to $10.50 and the board accepted the plan. A date has not been set for shareholders to vote on the proposal.

Crown has posted losses in eight of the past 11 years, an average loss of more than $10 million a year. In October, it reported a loss of $5.5 million, or 55 cents a share, on revenue of $479 million. Without the $6.2 million in one-time costs associated with its attempts to merge with Rosemore, Crown said it would have posted a profit.

Crown's Class B shares closed up 6 cents at $10.31 yesterday. The contract approval was announced after the markets closed.

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