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Patrick Springer, Published December 06 2012

Union barred from meeting as American Crystal stresses long-term view

FARGO – American Crystal Sugar workers, who found themselves locked out of their jobs 16 months ago, found the door to a shareholders’ meeting closed to them Thursday.

That meant the union, whose members have rejected the Moorhead-based company’s contract offer four times, were unable to present what a union official said was more than 100,000 petition signatures urging an end to the dispute.

The spurned petitions came as American Crystal sugar beet growers met to discuss long-term strategies at a time of decreasing sugar prices and uncertainty over the provisions of the next farm bill.

Before the 2,800 owner-growers convened their annual meeting, union leaders and supporters appealed to the company to return to the negotiating table to end a dispute that has thrown 1,300 union members out of work.

The union staged its news conference in a crowded room in the restaurant of the Holiday Inn, just down the corridor from the hotel’s Great Hall, where American Crystal held its annual meeting.

“The community wants you to know that we want you back to work,” Mark Altenburg, a Moorhead City Council member, told union members at the news conference. “We want what’s best for your families.”

Altenburg and fellow council member Heidi Durand, whose father is a locked-out worker, joined former council member Diane Wray Williams in saying the city of Moorhead has supported American Crystal Sugar over the years.

“This is appalling, what’s happened in our community,” said Durand.

Two clergy members made moral appeals to American Crystal to settle with the workers, and the union event culminated when leaders walked down the hall and tried to present two boxes containing the petitions.

But they were met in the hallway by Holiday Inn managers and security staff and told they could not enter the meeting, which was in progress.

Later, at a news conference with reporters, American Crystal’s top executive said growers and managers were too busy to interrupt their meeting to receive the petitions.

“We have a sugar company to run, and that’s what we’re doing,” said David Berg, American Crystal’s chief executive officer.

When called to the negotiating table by a federal mediator, the company has engaged the union in good faith, and it has provided replacement workers the same pay and benefits the union rejected, Berg said.

Expenses associated with the labor lockout had “a lot to do” with a steep drop in payments to growers during American Crystal’s 2012 budget year, he said, which saw a 31.9 percent decrease per ton of beets purchased.

“Those expenses are down significantly,” Berg said. He noted weather conditions also played a big role in payments, which still were the second-highest on record.

“It was a challenging year but it was not a failure,” Berg said.

Despite ads run by the union calling attention to rising debts, Berg said those increases apply to short-term debt. More importantly, he added, long-term debt has steadily fallen in recent years.

The farm bill is “not dead in the water,” but might be part of a comprehensive budget deal, he said.

So far, versions that passed the Senate and House Agriculture Committee have left the sugar program “largely unscathed,” according to a summary in Crystal’s annual report.

Last month, American Crystal paid its growers more than $400 million, the largest initial payment on record, based on a projected payout of $65 per ton. This year’s processing, now a third complete, is going very well, Berg said.

During the annual meeting, speakers stressed the importance of keeping an eye to the future and touted a “culture of productivity.”

American Crystal must strive to increase efficiency in order to provide “good jobs” long term, Berg said in his remarks to growers, which stressed long-term viability.

The message managers hear from growers, Berg said, is to avoid the pitfall of complacency. “Don’t just sit back and let things go sideways,” he said.

Berg also spoke of the need to control costs, since sugar growers cannot set their prices.

The long-simmering labor dispute was not mentioned explicitly in podium speeches, but managers praised nine employees singled out for their contributions and rising to “challenges,” three of whom were replacement workers.

Frank Day, vice president of global commodities for the Hershey Co., a major buyer of Crystal sugar, told growers that brand-name companies nowadays are held accountable for their entire supply chain.

He gave as an example pressure on Wal-Mart after more than a hundred workers in Bangladesh perished in a fire at a factory where the doors were locked.

Hershey is auditing its environmental emissions, and plans to do the same with its suppliers in the next five years. The chocolate company also plans to monitor its suppliers’ labor practices.

“I know you’re responsible citizens in North Dakota and Minnesota,” Day said, though he again said branded companies must now live with “new realities,” including the need for sustainability.


Readers can reach Forum reporter Patrick Springer at (701) 241-5522