Around MN: No progress in American Crystal talks

Making Sugar

Making Sugar by gfpeck on Flickr

There’s no end in sight to the lockout at American Crystal Sugar Co. Union and company representatives met Thursday at the request of federal mediator Jeanne Frank, reports the Forum of Fargo-Moorhead. The American Crystal representatives arrived with the same offer the union rejected in July. Company representatives rejected a counter offer brought forward by the union during Thursday’s meeting.

Union officials offered to negotiate potential changes to employer health coverage and possibly expand the companyʼs substance abuse policy if the company removed all its controversial wording changes to the contract that union workers worry would erode collective bargaining rights and lead to the contracting out of union jobs.

No new talks are planned.

The Forum is reporting on another development in the lockout this morning. Locked out workers living in North Dakota are ineligible for unemployment benefits. The state forbids payment to employees involved in a labor dispute.

Workers on the other side of the Red River, in Minnesota, are able to collect unemployment benefits if they are out of work due to a labor dispute.

American Crystal Sugar Co. locked out 1,300 union workers at five processing plants – in North Dakota and Minnesota – and two storage facilities after union members rejected a final contract offer on July 30.

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  • Someone who cares

    This is a great story unfolding in the Red River Valley. It reminds me of stories about the Civil War where brothers fought against one another for little personal benefit just because the leaders had a plan. There are really four groups of stakeholders (beet farmers, beet plant workers, beet plant management and company management) to this lock-out and each has different motivations for a settlement, but all of them also want to better their payout as a result of any settlement. The problem is there is a finite amount of sugar beets to be processed and little chance that all parties can win, but there are many ways that can result in all parties becoming losers.

    Despite all the negative health impacts from eating too much refined sugar, the high use among the majority of Americans has so far kept the industry from being punished like the tobacco industry with huge taxation, health impact fees, mandatory negative labeling and advertising, and even higher health insurance cost for the users of the product. Perhaps that day is coming sooner than we might think, but so far sugar has not suffered that fate. In fact sugar affinity/abuse/addiction is so high, that it is deemed a critical supply for the majority of the world, so long term supply contracts often are negotiated between sugar supply countries and sugar consuming countries in order to avoid sugar wars.

    The US has decided to have a robust domestic sugar production strategy which assures ample profit to producers in exchange for the assurance that the majority of the country’s supply will produced locally. This is accomplished by limiting imports to a level which artificially keeps the price quite high. As a result of all these kinds of agreements around the world only a few countries buy most of their sugar on the world market. Nevertheless, the point is that the sugar production is nowhere near a free market situation, so all the beliefs and norms regarding people’s understanding of how the free market should be applied to the labor situation with the lock-out in the Red River Valley should be set aside until this issue is settled. Comments from all sides just make posters on various blogs look ignorant when they do not know hardly any of the specific facts. The artificial support prices in the US for sugar provide plenty of room for reasonable farmer and labor support and no amount of union concession is going to make any difference in the consumer prices for sugar.

    The beet plant workers spend nine months a year working rotating shifts with only one weekend off per month. They often wait for their one four day weekend to take care of all their family and personal needs like doctor visits. Frequently they are sick after seven swings, seven graveyards and seven days with only two days off between them if they did not need to work overtime to cover for someone sick or injured on another crew. No vacation is permitted during the processing campaign, but many of the year-round workers have earned five weeks of vacation for their loyalty and past service, so they get close to half of the summer off on vacation. Really there are two classes of labor in the plants: one group works only during the processing campaign and the only benefit they get is th ability to draw unemployment compensation during the summer fishing season, the other group works year-round and earns vacation, pensions and family healthcare. That is why one of the provisions the company offered was to take away all the vacation, retirement and healthcare benefits for people who worked less than 85% of the year rather than the current cutoff of 75%. The campign only workers are young single risk takers or mostly the spouses of people who have a job with benefits already, so the healthcare is not needed for their family. The pension and health care are the benefits for working the extra 2-3 months to rebuild the plant for the next process season.

    The plant management is made-up largely of former union laborers and beet farmers who had higher levels of network connections, education, ambition or enthusiasm. They get the slightly better pay and opportunities for bonuses, but they give-up all the protection that the union gave them, so they become purely at will employees. The first signs of disagreement those people display with regard to the upper management decisions, then they often see their position eliminated. The attitude seems to be that they are either for or against the company plan, so they are forced to do the bidding of the Moorhead bosses even if it perhaps the last thing they might choose to do personally. In the last labor dispute in the early eighties the company attempted to run just one of the five plants by combining all of the management from all of the plants to start that plant. Together with as many replacement laborers as they could find to work seven days a week they barely managed to get it running to make non-salable sugar for the most part. The replacement workers they have now with just a few managers in each plant will likely not be able to even start the boilers safely to generate the steam and electricity needed to even thing of processing the beets. Yes, each plant has coal-fired steam turbines which operate at extreme temperatures and pressures to generate electricity and boil beet juices. Even if Strom Engineering says they can supply licensed boiler operators, few if any of them will have the experience needed to safely run the specific boilers in those plants. Death, injury and property destruction are near certainties if they try to do so unsuccessfully, and gross negligence will be the claims of all the victim’s families, so there will be no worker’s comp immunity or liability limits placed upon their lawyers. I really doubt that any of the plant management teams want to even be personally present when they try to start those plants if they place any value on their own personal safety.

    The beet farmers have enjoyed many years of huge beet payments. They have averaged around $1200 per acre for many years. That is 2-5 times the value they can get out of raising alternative crops on the same land. This is about ten times the amount the union laborers get in total wages and benefits for their part of the process. If management could use magic to process the beets instead of union labor they could increase the beet payment by no more than 10%, but they could give the union all they asked for by reducing the beet payment by about 1%. I believe most of the farmers would rather do this than risk losing much of their crop to poor management decisions, or to not have to give-up most of their winters, to work in their own plants to try make them work with replacement workers. The farmers also stand to lose government protection of their industry if the laborers team-up with tea party members to demand the elimination of the sugar protection laws that prevent imports. Sugar customers would gladly support this too.

    The final group of stakeholders is the professional management team in Moorhead. They are the ones who have taken the double salaries in the last few years like the CEO and they are most likely the ones who wanted to hire the union busting firm to somehow offset those increases so they felt justified in taking that compensation. Unfortunately they likely have golden parachutes in their contracts so that even if they end-up getting fired by the farmer board for their involvement in screwing-up the entire sugar industry for the communities involved, they will likely be rewarded for that as well. That means that the farmers stand to lose something or potentially everything no matter how this turns out. It looks like the least they can lose is by telling the union they are sorry that they let the wildcat management team try to bust the union in the first place.

    Keep in mind that most of these stakeholders all live in the same communities, attend the same churches and send their children to the same public schools. Nearly every time any of the leave their home, they are going to be face to face with the people who are trying to ruin the best part of their existence. Current employees who work in the plants will likely be the mayor and city council members who will determine the treatment the plants get with regard to noise, smell, pollution, load limits on roads, traffic and taxes in the future. It seems that going out of their way to be fair to the union is in everyone’s best interest.

  • Chris Halligan

    The post by Someone Who Cares, could I have permission to repost/reuse your comment?

    Much appreciated!!!

  • Someone who cares

    The purpose of posting a comment is to have others see it as frequently as possible. I believe MPR would appreciate a reference to the address on which you find it if you are going to repost any or all of my comments.

    I grew-up in the Valley and knew some workers, farmers and plant management people. None of them are enjoying this situation at this point. I’ve known some of the people who have died or been injured at the plants; I do not think many of them would suggest that replacing the approximate 20,000 years of union experience with a few weeks of training is a safe way to start the new campaign.

    Good luck to all of you.

  • Someone who cares

    I saw last week that Halliburton’s plans to hire 11,000 people in North Dakota’s Bakken Shale oil fields over the coming few months. The executive said that many of those people could be making $125,000 to $130,000 within a year of being hired. I would love to see the majority of the 1500 Crystal workers move a few hours west for a year while the executive team and the quiet farmers bet the entire year on their replacement workers being more productive than the union team they had at their disposal just a few weeks ago. It may not be as easy as clicking their heels to get everyone back home again.

  • Someone who cares 2

    I saw last week that Halliburton’s plans to hire 11,000 people in North Dakota’s Bakken Shale oil fields over the coming few months. The executive said that many of those people could be making $125,000 to $130,000 within a year of being hired. I would love to see the majority of the 1500 Crystal workers move a few hours west for a year while the executive team and the quiet farmers bet the entire year on their replacement workers being more productive than the union team they had at their disposal just a few weeks ago. It may not be as easy as clicking their heels to get everyone back home again.