Sunday, October 24, 2004

Kroger contract reached


Marathon bargaining ends with early-morning deal

By Mike Boyer
Enquirer staff writer

AGREEMENT
The latest: Kroger Co. and the union representing 8,500 local workers reached tentative agreement on a new contract Saturday.
What's next: Union members will get details of the proposal Wednesday, then vote.
In the balance: If union members reject the proposal, negotiators could go back to the bargaining table. The union also has been authorized to call a strike with 72 hours notice. Kroger has been interviewing possible replacement workers should a strike affect its 70 stores in the region. Other strikes earlier this year cost Kroger an estimated $228 million, and it is facing increasing local competition from Wal-Mart Supercenters.
UNION MEETINGS
Members of United Food and Commercial Workers Local 1099 will vote on a new three-year contract Wednesday. Meetings will occur at 8 a.m., 11 a.m., 2 p.m., 5 p.m. and 7 p.m. at the following locations:
• Dante's Restaurant at the Imperial House Motel, Interstate 74 and Rybolt Road, Cincinnati.
• Local 1099 assembly center, 913 Lebanon St., Monroe.
• Clarion Hotel and Suites, 5901 Pfieffer Road, Blue Ash.
• Eastgate Holiday Inn, 4501 Eastgate Blvd., Clermont County.
• Fort Mitchell Inn, 2100 Dixie Highway, Fort Mitchell.
An overnight breakthrough capped a 16-hour marathon of talks as Kroger Co. and the union representing 8,500 local workers reached agreement Saturday on a proposed three-year contract that might avert a strike at the company's 70 area grocery stores.

Neither Kroger nor union leaders would discuss specifics of the agreement, which they said came after Kroger put a new wage proposal on the table at midnight. A 2 a.m. handshake sealed the deal.

John Marrone, a spokesman for the United Food and Commercial Workers Local 1099, said union leaders will fan out in the next few days to brief Kroger employees on the agreement. A ratification vote has been scheduled for Wednesday at five locations in the region.

Kroger workers contacted Saturday said they had yet to see the proposal but were optimistic. "From what I've heard, it's looking good," said Dan McKnight, an employee at the company's Mitchell Avenue store in Cincinnati.

After earlier reaching agreement on health-benefit costs and pensions, the bargaining session that began at 10 a.m. Friday focused on wage proposals and contract language, Marrone said.

Marrone said highlights of the agreement include:

• Hourly wage increases and bonuses.

• Increased cost sharing between employees and the company on health care.

• Continued overtime provisions and other unspecified job protections. The company initially sought to limit overtime.

Both sides said the agreement gives workers in Kroger stores in Greater Cincinnati, Northern Kentucky and Southeast Indiana more pay and benefits while allowing the company to hold down expenses as competition grows with Wal-Mart and other nonunion retailers.

"This new contract provides union members with affordable health care, across-the-board hourly wage increases plus bonuses and long-term security for the pension," Lennie Wyatt, Local 1099 president, said.

Kroger spokesman Gary Rhodes said the company was pleased to work out an agreement that balances the employee compensation and the company's desire to control costs.

If workers approve the new contract, it would be the ninth major settlement between Kroger and the union this year since a 141-day California strike and lockout that ended Feb. 29. Talks are continuing between the company and the union in Denver and Las Vegas.

Local 1099 said the proposal continues members' overtime provisions while maintaining full-time jobs. The union said the company initially wanted limits on the number of hours available to the roughly 3,000 workers who hold full-time status under the old contract.

In addition, the union said the agreement calls for about 600 Kroger workers covered under a separate nonfood/general merch-andise contract to be merged into the grocery and meat cutters agreement in June. The union, which included that provision in its initial contract proposal, said those workers will receive opportunities for advancement and higher pay.

The union said the agreement also includes "a generous buyout option" for workers at or near retirement, an apparent concession to the company's push to reduce labor costs.

Federal mediator Earl Leonhardt, who helped broker the agreement, commended negotiators.

"Both sides took their responsibilities very seriously, and the tentative agreement that we have ... is a product of their commitment to get the job done," he said.

Labor interests and investors have been closely watching the local negotiations. The strife in California and a brief strike in West Virginia, southeast Ohio and parts of Kentucky cost Kroger an estimated $228 million in lost profits. Kroger has said it is struggling to win back customers captured by its competitors during the strikes.

The company's stock has been falling and Friday closed at $14.97, not far off its 52-week low of $14.70. But the strikes also took a toll on the union, which settled with the company for less than its original proposal in California.

Saturday's early-morning settlement culminated weeks of negotiations that began Aug. 31 and included two contract extensions and a strike authorization. The union's five-year agreement with Kroger expired Oct. 9, but both sides agreed to continue talking under a contract extension. A second extension Oct. 15 came with strings attached: More than 97 percent of the 5,000 union members who voted rejected the company's previous offer and authorized union leaders to call a strike with 72 hours notice.

As the talks continued, Kroger began advertising for workers who would take the place of union members if a strike came. The company said it would not close stores but would use the substitute workers and managers to stay in operation.

Bargaining sessions last week resolved sticking points over health-care cost sharing and pension benefits.

In its initial proposal to Kroger, the union sought annual wage increases of as much as 50 cents an hour for department heads and assistants and smaller increases for other workers.

One earlier offer by the company was for a bonus when the contract was signed, an hourly-wage increase in 2005 and another bonus in 2006. But not all workers would have received the bonuses or wage bumps.

Marrone said the union resisted the bonuses, insisting any agreement specify hourly-wage increases. "Bonuses come and go," he said. "Our emphasis was on hard money."

Kroger operates more than 2,500 stores with 290,000 employees nationwide. Its annual sales total about $55.1 billion.

E-mail mboyer@enquirer.com




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