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Dave Olson, Published December 01 2011

American Crystal Sugar CEO anticipates deal to end lockout

FARGO – American Crystal Sugar President and CEO David Berg talked Thursday about when – not if – the company will resolve differences with locked-out workers.

“We do anticipate that at some point we’re going to have a labor settlement, and the people who have run those factories well for a long time will be back on their jobs,” Berg said at a news conference during the joint annual meeting of American Crystal Sugar Co. and the Red River Valley Sugarbeet Growers Association.

Earlier in the day, locked-out workers held a news conference in a different part of the Holiday Inn, where the annual meeting was being held.

Speaking for the union, John Riskey said workers want American Crystal to say why they were locked out four months ago.

“Was it to reduce productivity and farmers’ profits? To starve your neighbors?” asked Riskey, the local union president.

State Sen. Tim Mathern, D-Fargo, said the lockout needs to end.

Mathern went on to say he was shocked by comments Berg has made regarding a need to reduce wages and benefits to make Crystal Sugar more profitable. Mathern said wages and benefits must be kept attractive if young people are to remain in the area instead of going elsewhere to find jobs.

Countering Mathern’s comment, Berg cited a Crystal Sugar contract offer made prior to the lockout.

Under that offer, workers would be better off by about $3,000 a year each year of the five-year contract, Berg said.

On the subject of the company’s health care benefit, Berg said it is “dramatically noncompetitive” for the company and needs to be brought in line with economic realities.

“Basically, we need to have employees take on some share of that cost,” he said. “We just can’t eat that cost forever.”

Security a ‘precaution’

Security was evident at the shareholder meeting, a detail that surprised Riskey.

“I don’t know what they’re afraid of,” Riskey said. “We are their neighbors. We are their friends. We thought we had a good working relationship.”

Asked about the security, Berg said he didn’t view it as important.

“You take precautions, but I don’t see things going to that level,” he said.

Kevin Solum, a locked-out worker from Barnesville, Minn., who worked at the Moorhead plant, said he and fellow workers are ready to return to their jobs.

The lockout, he said, is creating divisions within communities and families.

“I’ve heard stories of family members not speaking to each other because one may be a grower and one may be a worker,” Solum said.

“For this to come to that is really an unfortunate situation,” he said.

Berg acknowledged the divisive nature of the labor dispute on Thursday.

“Human beings have emotions, and emotions have been hurt in this process,” he said.

But Berg said that when a settlement is reached, he’s confident everyone will be able to move forward.

“Bruises take awhile to get healed, but we’ll get over it,” he said.

Profits and costs

Crystal Sugar’s annual report shows the company saw $1.5 billion in net revenues in fiscal year 2011, which ended Aug. 31.

Strong sugar prices were a major reason for that success, according to Berg, who said what goes up also goes down.

He said steps to control labor costs, which amount to $90 million to $100 million a year, must be taken now if Crystal Sugar is to remain profitable long-term.

Riskey sees it differently.

“When the company’s profitable, they should share that with their employees, their hard-working employees. Why use that money to lock us out?” Riskey said.

Berg said the majority of growers he hears from tell him not to back down in negotiations, but he added that there is room for concessions and compromise.

“We are ready to negotiate this afternoon,” he said.

On the subject of safety, Berg said the situation at Crystal Sugar factories is no different from in past years.

“Yes there have been accidents, but nothing out of the ordinary,” he said.

Readers can reach Forum reporter Dave Olson at (701) 241-5555