Nearly 10 months after the end of the bitter Southern California grocery strike and lockout, the three chains and the union that waged the longest labor standoff in U.S. supermarket history are still...
Nearly 10 months after the end of the bitter Southern California grocery strike and lockout, the three chains and the union that waged the longest labor standoff in U.S. supermarket history are still in turmoil.
Profits at Albertsons, Safeway-owned Vons and Pavilions stores, and Kroger-owned Ralphs are being pinched by the price cuts they’ve made to woo shoppers alienated by the 4½-month-long dispute. All three companies’ stocks have fallen since a new contract was signed in February.
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The supermarkets maintain that they’ll rebound, largely because the contract installed a two-tier system allowing them to give new hires significantly lower wages and benefits than veteran workers.
Safeway, for one, doesn’t want to wait for attrition to realize the payoff. The company, based in Pleasanton, Calif., plans to offer voluntary buyouts to roughly one-third of the 22,000 people who worked at 293 Vons and Pavilions stores in Southern and Central California to hasten their replacement with less-costly new hires.
People familiar with the buyout program said Safeway was prepared to spend up to $50 million on it.
“They want to get rid of the old-timers and bring in a new class of citizens,” said Rick Icaza, president of the International Food and Commercial Workers Local 770, which represents 4,266 Vons and Pavilions employees in Los Angeles.
As it is, the two-tier system is breeding division between experienced workers and new hires who aren’t happy about being paid less to perform the same tasks. Turnover among new hires is high, union officials said, and some are chafing at paying union dues that average nearly $50 a month. The grocery stores dispute that there is a turnover problem.
The Safeway buyout plan and the knowledge that the company’s goal is to thin the list of experienced, higher-paid workers is likely to hurt morale even more, employees said.
Ralphs and Albertsons haven’t proposed buyout programs, union officials said. Ralphs spokesman Terry O’Neil said the chain “has no plans” to do so. Albertsons didn’t return calls.
A cashier hired under the previous contract, which expired in October 2003, started at $9.78 an hour and was immediately eligible for health benefits. A veteran cashier’s hourly wage is $17.90 and is reached in about two years. Under the current contract, a new cashier earns $8.90 an hour, takes six years to top out at $15.10 an hour, and must wait a year to become eligible for health benefits.
The Safeway buyout plan is being negotiated with the union. A spokesman declined to disclose possible terms.