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Published September 19, 2011, 10:47 AM

A prediction on American Crystal’s lockout situation

FARGO, N.D. — I’ve often been asked what I think the future of the labor lockout between American Crystal Sugar Co. and the Bakery, Tobacco Workers and Grain Millers International Union locals. So here’s what I think.

By: Mikkel Pates, Agweek

FARGO, N.D. — I’ve often been asked what I think the future of the labor lockout between American Crystal Sugar Co. and the Bakery, Tobacco Workers and Grain Millers International Union locals.

So here’s what I think.

First, Crystal long has been an ally of this union and vice versa.

“These are OUR workers,” said one Crystal administrator early in the process. This hasn’t stopped the company from being firm in its position to change the contract. But it still is true.

Second, costs of health care have gone up 15 percent annually. This particular union has been especially effective at making sure the company covers its workers as part of a comprehensive contract. But the union also makes the point that Crystal has been successful, financially, despite this increase.

Third, this union has had strong language that protects the position of the longer-term employee. That is an issue that other industries — even journalism — have had to grapple with. Some younger more tech-savvy people in journalism may rise to levels of grandeur in the editorial ranks, while other older luddites remain staff writers — or columnists. I am sure the union is considering this. I am not smart enough to say whether Crystal is union-busting (the union’s line) or not (the company’s line).

Fourth, it is the company owners — the shareholders, represented by their elected board members — who set the overall strategy for companies. This especially is evident in cooperatives such as American Crystal Sugar Co. It is this board that reviews the reports that lead to company managers getting 6 to 8 percent annual salary increases while lower-paid laborers get 2 percent annually. It is the board members who decide whether they want executives who are cultivated internally or selected from outside the company. It is these folks who determine the triggers that allow a president of the company to get $1.9 million in an annual compensation. It is the shareholders who have seen the annual beet payments continually look healthy and their beet stock rise, so that the executives can receive this kind of compensation.

The union workers, while important in the whole process, have skills that are not the same as company managers. I wonder if the company hasn’t also studied what welders, electricians and rest are being paid in a community, but the answer apparently isn’t the same as the study regarding executive compensation. Apparently, the farmer/shareholders, their boards and the managers of the company simply don’t want a compensation package — pay, benefits, rules — that they consider to be more than they need to offer.

But on to the prediction: I think the company has planned for this confrontation for a long time. It has its replacement workers (company term) or scab (union term) program for some period of time. I think the period of replacement workers will last at least through the pre-pile harvest at the end of September.

To make their point, the workers will have to prove that they can handle the 24-hour, full-scale harvest conditions that start Oct. 1. I think they’ll need to do that for a period of weeks — maybe a month or more. I don’t know what they’re paying these folks, but I’m betting they’re paying a premium to get people in for this period. They’ll have to do it without major safety or other processing incidents.

I think the issue will get solved before Thanksgiving, when the families of the farmer/shareholders have to rub shoulders with their relatives who work in the factories. I think the holidays will be especially uncomfortable in rural places such as Drayton, N.D., and Hillsboro, N.D., where unemployment benefits have not been granted, but also in Crookston, Minn.

Who will have blinked? That depends.

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