business news in context, analysis with attitude

In our piece yesterday about the Southern California labor strife, we chided both sides…but that didn't sit well with one MNB user, who wrote:

Your editorial is a classic fence-sitter approach to a situation where there really are right and wrong answers. While you touch on the consequences of the dispute, there can be no dispute that the cause of the problem is the UFCW's unwillingness to adopt the necessary changes to the contracts that will allow for the unionized chains to have a chance to survive in a competitive environment.

The grocery business is thus facing the same fork in the road that the steel industry, auto industry, airlines and any other place in the US where there is competition must make a decision. The problem is not Steve Burd, who is probably a SOB, but so what. The unionized companies are facing competition in the form of Wal-Mart and Costco and other big chains where labor costs are totally out of whack, and getting worse. The UFCW leadership is the only thing standing in the way of changing that, since management cannot make the change unilaterally. If the UFCW will not change, they can join the hall of failed union leaders who took the same kind of suicidal positions as the "leaders" at the unions who represented Eastern Airlines employees, the UAW, which now represents less than half of the number of employees it did in the US auto industry, the steel industry in the US which is a shadow of its former self, etc.

Sitting on the fence as you are doing, saying tsk tsk to both sides is really destructive and counterproductive. A lecture is not what is needed.

Employees need the cold hard facts and not more "come let us reason together" nonsense from industry observers. Stop being so political and just state the obvious;, that if the union doesn't come to its senses, there will be no jobs for its members. Management really doesn't have a role in this battle since it is a matter of the marketplace determining where it will shop, consumers will go to buy their groceries where they are the best value, and the consumers are saying that they will not pay for health and welfare programs that exist in few other industries in the country. Just because management was stupid enough to agree to these contracts in the past doesn't mean that they have any control of the future. That decision is entirely up to the union and its members. You ought to let them know that instead of trying to be a politician.

Gee, if you think we were trying to be a politician in what we wrote, you haven't been reading MNB for very long…

We weren't being political. We happen to think that both sides are wrong in not being willing to adjust to changing circumstances. And, quite frankly, to say that one side is right and the other is wrong is exactly the kind of arcane reasoning that has created this mess and prevents it from being resolved.

We don't usually attack MNB users, but this letter really got on our nerves.

Since when did "reasoning together" become an unreasonable expectation?

And another MNB user wrote:

I find it both sad and unfortunate that both sides have realized that past negotiations and failures on their part to look at the long-term have created the situation we are in now. It seems to me that all contracts are for short-term gains. No one looks past the immediate pay or benefits.

Now both sides will and should suffer because the corporations can't give anymore and the Union can't play any more trump cards. The well is dry and the Union is going to lose. Decertification is the program I would be trying to plant now.

Kiss another greedy and uneducated union good-bye and begin to put up the Welcome to Southern California Wal-Mart signs. What hand do you believe Wal-Mart has played in this scenario?

Again, we're not sure than you can say fairly that organized labor has a monopoly on greed. Or bad judgment.

Another MNB user brought a different perspective:

This is another example of the squeezing out of the middle class. You have 70,000 workers, most of whom make less than $20,000, forced to strike or be locked out to protect their wages and health care benefits. I don't think people understand that when you drive down these jobs that all other businesses in the area are affected too. These people go to movies, buy clothes, buy cars, etc. When they can't do these things, it has an impact on the community. As far as health care, that is the main reason a lot of these people are working in this industry. If the company's plan is implemented, most of these workers couldn't afford to have health insurance. When those who can't afford to pay for it stop getting the coverage, it will make the cost for those who still can, go even higher. The people who can't afford the coverage anymore will then turn to the public or state health plans, usually much later than they would if they had their own coverage. A lot of the time these visits are for much more costly treatment. The bottom line is we pay for these people's coverage out of our taxes. Back in the 40's, there was national heath care proposed for all Americans. The employers of the day said "Oh no, we will take care of the people. The government need not get involved." That is why most employers have some form of a health care plan today. But the employers are now saying "No way!" It is time for national health care. Our system as currently run won't last much longer if the projection that the cost of health care will double every 4 to 5 years is accurate.

We're not sure that most of the 70,000 workers actually make less than $20,000 a year…but even if they do, the fact is that both sides have to figure out a better way to deal with spiraling health care costs. The union can't expect the chains to just continue absorbing the costs as the competition gets tougher and tougher. It isn’t reasonable.

And we're not sure that universal, government-run health care will fix anything.

Regarding the seeming marginalization of new Dominick's CEO Randall Onstead from labor negotiations being conducted by parent company Safeway, one MNB user wrote:

I believe he was hired as a figurehead not someone who would actually make the decisions.

His easy going style, good looks and his Texas charm are being used as a smoke screen to cover the fact that it's the same as it was, Safeway expecting employees to make all the concessions.

Get in a guy that is able to talk with employees, make them feel worth-wild and needed but still offer the same contract that started the problem in the first place.....

The employees saw his video with him in an open collared shirt, used as a prop to make employees think, he was one of them. He's not a Safeway man, he's a worker! The fact that Safeway ruined his father's chain is always mentioned but he wasn't brought back there to fix its problems and there "are" problems in the Texas division!

Instead, they bring him into Chicago, tell employees that he wants to teach Burd a lesson and make this chain work. Wouldn't he know more about fixing a non-union chain that he used to run?

No one is buying it!

At least, not everyone…
KC's View: