Local supermarket needs Twinkie defense

Nov. 18, 2012

Katy Grimes: The Nov. 6 election has clearly emboldened blockheaded union leaders into thinking that they drive business. But the smarter leaders know that they are merely putting off the inevitable with their election wins, and across the board tax increases.

The inevitable insolvency facing California, and even the federal government, doesn’t make union attacks any less painful.

Keep your hands off my Twinkies

Two weeks ago Hostess Brands, the maker of Twinkies, Wonder Bread and Ding Dongs, announced that the entire company would liquidate if its striking employees don’t return to work. This would result in the loss of nearly 18,500 jobs in 33 facilities.

Thousands of Hostess employees went on strike after voting to reject a contract offer that cut wages and some benefits.

Hostess is currently already in Chapter 11, it’s second bankruptcy reorganization in 10 years. According to news reports, Hostess reports that increasing pension costs, and health care cost increases necessitate more employee contributions toward their benefits.

When the union and employees refused to return to work, Hostess permanently closed three plants as a result of the work stoppage. The company has filed a motion with the U.S. Bankruptcy Court seeking permission to close its business and sell its assets, including its iconic brands and facilities. Bakery operations have been suspended at all plants.

Supermarket not feeling so super

Raley’s Supermarkets, in Sacramento, CA, is a privately held, family-owned supermarket chain that operates all of the Raley’s, Bel Air Markets, Nob Hill Foods, and Food Source stores in Northern California and Nevada.

Raley’s is the classic American dream story. Founded in 1935 by Tom Raley in Placerville, CA, which Raley called “Raley’s Drive-In Market,” Tom Raley grew his company over the years to 85 stores, and more than 13,000 employees.

But Raley’s has been locked in a nasty battle with the United Food and Commercial Workers union over health care costs and wages. Negotiations between the company and union went on for 15 months before employees went on strike – the first strike ever in Raley’s 77 years in business.

Raley’s asked for a two-year wage freeze and the elimination of the premiums paid for employees working Sundays, nights and holidays, KGO News reported.

Raley’s spokesman John Segale said at the time that Raley’s urgently needed to cut costs in a “fiercely competitive” market. He said the Sacramento-based chain, which includes Raley’s, Nob Hill Foods and Bel Air stores, has closed five stores in the past year and seen the opening or expansion of 240 non-union stores in its markets since 2008. Perhaps that is really the crux of the issue.

While it was recently announced that the strike is over, this is not over.

Union strike, union intimidation

Union intimidation is real. Union thugs accosted store employees and shoppers. Striking employees screamed at coworkers, and even threatened their fellow Raley’s employees who dared to work throughout the strike. Shoppers were accosted for crossing the picket line.

I know. I witnessed it first hand. I shop at a Raley’s in Sacramento.  I’ve gone shopping several times since the employees went on strike. While I was appalled at seeing Raley’s clerks picketing, it was not all Raley’s employees doing the striking.

Last week, I got into a hassle with a picketer as I tried to enter the store. “Support store employees, support the strike,” she yelled in my face as I walked by. I told her that she should be happy she had a job with benefits in this economy.

That did not go over well.

“Unions are our defense against the rich,” one woman yelled, holding a picket sign.

“It’s our hard work that makes the company profitable,” another striking employee said.

A friend who crossed the picket line to grocery shop at a Sacramento Raley’s got into a tangle with a mouthy picketer. When she returned to her car, one headlight had been smashed, and was hanging by electrical wires.

On November 7, during the strike, United Food and Commercial Workers Local  5 Communications Director Mike Hennebery was arrested for battery on a Nob Hill Foods store director. Raley’s reported that Hennebery connected one punch to Store Director John Morin’s face, grabbed his phone and threw it to the ground.

The Director tried asking Hennebery to leave, as Henneberry was illegally trying to collect employee checks. Several employees reportedly told Morin that Henneberry’s presence within the store made them uncomfortable.

Henneberry was arrested using a a citizen’s arrest, and was booked into Alameda city jail. A police report was filed with Alameda Police Department, case number 12-6218.

Many of the picketers were actually non-union temps, as well as Safeway and SaveMart employees, according to one source close to the fracas.

Unrealistic demands

Northern California grocery workers are the best paid in the nation. But more is never enough for a demanding union.

Most of the striking workers that I encountered did not understand what they were talking about. They used a few sound bites in their repertoire, but seemed to have no concept of the big picture of running a business. They had been told that Raley’s wanted to cut their wages and benefits, and that was what they were fixated on. They seemed more like zombies going along with the agenda, unable and unwilling to understand the serious difficulties the company has faced.

Union leadership ignored the financial and competitive challenges that Raley’s is up against, and made too many ridiculous demands the company simply could not afford.

Raley’s must reduce its operating costs or risk going out of business.  40 of the company’s stores are losing money, some as much as $2 million a year, according to Raley’s President, Michael Teel, grandson of Tom Raley.

By striking, the union put its strikers on the picket line rather than encouraging them to earn their paychecks. The union is now feeding on it’s own. If Raley’s closes more stores, jobs will disappear.  The union leadership has put Raleys in a position of having to close stores, and union employees in danger of losing their jobs.

Raley’s offer was far more generous than what the union got from recent negotiations with other local grocery stores. Perhaps that is also part of the problem – give an inch, and the opposition will want a mile.

During negotiations the Union leadership made demands that were simply outrageous. They wanted Raley’s to grant “amnesty” to those union members who assaulted customers who crossed the picket line, and to hire back strikers who vandalized store property.

Another union demand included “signing bonuses” for all employees to end the strike. Whether emboldened or just stupid, the demands were ridiculous.

The agreement, which will not be made public until it is ratified by the Union members, ends 15 months of negotiations between the union and the store.