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Stephen J. Lee and Marino Eccher , Forum Communications Co. , Published January 16 2012

American Crystal calls union's latest offer 'publicity stunt'

MOORHEAD – American Crystal Sugar Co. rejected Monday the latest union proposal to end the company’s labor lockout and called the union’s approach to the most recent meeting “a publicity stunt.”

Union officials, Crystal negotiators, and a federal mediator met last Wednesday to discuss reopening talks to resolve the lockout, which has left 1,300 Crystal workers off the job since August. The meeting was not officially a negotiation.

John Riskey, president of the Bakery Workers local 167, said the union offered new proposals – including an offer on health insurance costs, a major sticking point in the labor fight – and asked the mediator to call for a new negotiating session. He wouldn’t specify details of the concessions.

“I think our committee went farther than what our members really wanted to,” Riskey said Sunday. “But in order to get this moving, if the company is serious about negotiating, this should help substantially in the process.”

On Monday, an American Crystal website posted letters to the union and to company employees from Brian Ingulsrud, the company’s vice president of administration and primary spokesman during the lockout to date.

In the letters, Ingulsrud said the company was rejecting the latest proposal as insufficient. He also said the union’s conduct at last week’s meeting stepped outside the guidelines set forth by the mediator.

“The Federal Mediator asked that this meeting be off-the-record and informal, and both the Company and the Union agreed to those ground rules at the beginning of the meeting,” he wrote.

The company offered a handful of ideas for resolving the lockout, he said in the letter.

About 35 minutes into the meeting, the union presented a new formal proposal and then issued a press release, Ingulsrud said.

“What was intended to be a good faith informal exploration of issues requested by the Mediator was turned into a publicity stunt by the Union leadership,” he said in the same letter.

Riskey, the local union president, said in a statement Monday the union is “disappointed, but hardly surprised” by the rejection.

“We think it is ironic that on this day, as we honor the legacy of Dr. Martin Luther King – one of this nation’s greatest advocates for workers’ rights – the company has once again decided to reject its workers’ sincere attempts to resolve this dispute,” Riskey said.

Monday’s exchange came after Riskey said in a news release Friday that American Crystal is losing money during the lockout because of its replacement workers.

According to a filing made Friday by American Crystal with the Securities Exchange Commission, in the first quarter of its fiscal year – the three months ended Nov. 30 – the company reported consolidated net proceeds, or profits, fell 39 percent compared with the same period in 2010.

The primary reason given in the report, which is available online, was a 29.8 percent drop in the beets processed during that time.

“The news is actually surprising,” Riskey said in the release. “We never expected the replacements to match our productivity, but processing 30 percent fewer tons over the quarter must be a serious disappointment to the farmers and executives. How long is (President and CEO) Dave Berg going to continue with this unnecessary lockout? Is he trying to do the company permanent damage?”

Ingulsrud said the drop-off in quarterly results was mostly because of the difference in harvest and production start dates, not the productivity of replacement workers.

In 2010, he said, work began in mid-August because of a large crop. In 2011, work did not begin until Sept. 11 because of a smaller crop.

While there were also some productivity differences with the replacement workers, “they were pretty insignificant compared to the impact of the start date,” he said.

American Crystal continues to seek local replacement workers – with advertisements running in The Forum and the Grand Forks Herald.

Crystal initially brought in workers from across the nation in August, hired by Strom Engineering in Minnetonka, Minn., to replace workers locked out after the union rejected the company’s proposed new five-year contract July 31.

Company officials have admitted replacing the workers has been expensive, partly because the company has to pay for room and board for the out-of-state workers, as well as transportation costs.

Before Thanksgiving, the company began advertising replacement jobs to local residents. It just makes economic sense to replace the out-of-state replacement workers with locals over several months, because the lockout has lasted longer than expected, Ingulsrud said at the time.

Federal law prohibits a company from permanently replacing locked-out workers.

In an ad Sunday, American Crystal touted “multiple positions,” for “non-union, full-time, limited duration jobs in our five Red River Valley factories.”

The listed jobs range from general workers, at $12.50 to $14.75 per hour, to certified welders at $24 an hour and “electronic control techs” at $24.50 per hour. The jobs include “day-one benefits, including medical, personal time” and flexible spending accounts for medical care.

While stressing the company wants its union workers back, Ingulsrud said last week the hiring process is going well.

“We are making excellent progress in hiring employees,” he said in an email. “We are very pleased by both the volume and quality of the applicants we are receiving for these open jobs. I think it speaks to the fact that (the company) is offering an excellent pay and benefits package that is attractive to many people.”

But he declined to give figures on how many locals have replaced out-of-state replacement workers.

Sandy Driscoll, a company employee locked out from the East Grand Forks plant, says it doesn’t look like many locals have taken replacement jobs.

“When I am picketing, you still see a lot of out-of-state licenses on the vehicles driving in,” to the factory, she said.


Stephen J. Lee writes for the Grand Forks Herald.

Readers can reach Forum reporter Marino Eccher at (701) 241-5502