No progress at Crystal Sugar

  • Article by: MIKE HUGHLETT , Star Tribune
  • Updated: June 8, 2012 - 9:19 PM

Mediators brought together representatives from Crystal Sugar management and the union, but to no avail. The lockout drags on.

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Locked-out American Crystal Sugar Co. union members gathered for a rally this week in a parking lot across from Crystal Sugar headquarters in Moorhead, Minn. The contract dispute has lingered since Crystal Sugar management locked out about 1,300 union workers from sugar beet processing plants on Aug. 1.

Photo: David Samson, Associated Press - Ap

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The bitter lockout of 1,300 American Crystal Sugar Co. workers recently entered its 11th month, and no end is remotely in sight.

Management and union representatives met Friday for the first time in about five months -- and only the fourth time since the lockout began -- but the talks went nowhere.

The union offered "detailed proposals" addressing management concerns about health care, seniority and other issues, said John Riskey, president of Bakery, Confectionery, Tobacco Workers and Grain Millers Local 167G.

He declined to specify the proposals but said Crystal Sugar's management "made clear they are not willing to compromise on any issue and intend to prolong the lockout until every single one of their terms is met."

The company, in a news release, said the two sides "remain far apart." The union's latest "contract demands continued to ignore many of American Crystal's proposals and the realities of the workplace today," the company said. "The union also continued to demand wage and pension increases significantly above those contained in American Crystal Sugar's final offer."

Riskey said the union has not asked for wage increases above what Crystal has offered, and only slight pension increases.

The two sides were brought together Friday by a federal labor mediator at the request of the union.

The company locked out workers at five Red River Valley plants after workers resoundingly voted down a contract that would have raised wages 13 percent over five years, but would have increased health care costs and altered some key contract language to workers' detriment.

Moorhead-based Crystal Sugar, a farmer-owned cooperative, is the nation's largest beet sugar producer with three plants in Minnesota, one each in Moorhead, Crookston and East Grand Forks. The other two are in North Dakota.

The plants have continued operating with temporary replacement workers. By law, locked-out workers can't be permanently replaced, but lockouts can drag on indefinitely.

Locked-out workers are losing $1,000 to $2,300 per month, the union says, with North Dakota workers hit hardest, since unlike Minnesota employees, they're not eligible for unemployment insurance.

The lockout has also nicked the bottom line of the company and its farmer-owners. Federal securities filings say that partly due to the lockout, Crystal Sugar's production costs were up $137 million during the first half of its fiscal 2012 compared with a year ago.

The company estimates that its payout to beet farmers this fiscal year will be $59 per ton, which compares with around $73 per ton for Minn-Dak, another beet grower co-op in the Red River Valley.

"There's no question there was a significant impact on our payment by the lockout," said Brian Ingulsrud, a Crystal Sugar vice president. However, he noted that this year's payout to Crystal Sugar farmers would still be the second-highest on record.

Crystal Sugar has been working to reduce lockout-related costs by hiring local replacement workers. When the lockout started, the firm brought in replacements recruited by Minnetonka-based Strom Engineering.

It was an expensive proposition since Strom workers needed housing and meal per-diems, which were ultimately paid by Crystal Sugar. Plus, Strom got its cut as a labor contractor. But in November, Crystal Sugar began advertising to hire local replacements.

Currently, about 70 percent of the plants' workers are local, and 30 percent were supplied by Strom, Ingulsrud said, bringing down the company's costs. "We feel pretty good about the future."

About 240 union workers have informed Crystal Sugar they have retired or quit, he said.

Mike Hughlett • 612-673-7003

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