Union lockout ends decades of smooth relations

American Crystal Sugar workers locked out
Moorhead, Minn., resident and union worker Arland Woltjer, right, was among those gathered outside the American Crystal Sugar Co.'s processing plant in Moorhead, Minn., on Monday, Aug. 1, 2011.
MPR Photo/Ann Arbor Miller

In its third day of a labor impasse between American Crystal Sugar and its union employees, workers continue to picket outside the factories while replacement workers prepare for the October harvest.

The company locked out workers this week after the union rejected a final contract offer. No new contract negotiations are planned.

The dispute marks the end of 30 years of relatively smooth relations between American Crystal and it's workers at five plants in the Red River valley.

Many workers at American Crystal have years of experience there. Twenty or 30 years is not uncommon.

Union Steward Tony St. Michel started at the Moorhead factory in 1971. He was 19.

"It has been a very good place to work. I've been very proud to say I work for American Crystal Sugar," St. Michel said. "Now, not so much."

Union workers have had good pay and benefits, St. Michel acknowledges. They have also worked hard to make the company more efficient, and very profitable, he said.

St. Michel understands health insurance costs are increasing. Pay and benefits are negotiable, he said. But he won't budge from contract language he believes gives the company too much freedom to bring in non-union workers. The new contract includes a provision that would allow the company to replace union workers with subcontractors.

"It's not about the money. It isn't. It's about the language and job security and tearing down our union. Everybody feels very strongly about that."

On management's side is a sense of urgency about the future, also shaping the company position.

It's been seven years since the last contract was negotiated, said American Crystal Vice President Brian Ingulsrud. Health care costs have risen dramatically in that time. Hefty increases in energy costs put additional pressure on an operation that uses a great deal of energy to turn beets into sugar.

"We're very profitable right now because of the price of sugar being at historically high levels," Ingulsrud said. "But once that price of sugar comes back down to a more normal level, the profitability of this business isn't going to look so good. We need to be prepared for that."

Because the world sugar market is volatile and fluctuates rapidly, reducing labor costs is part of the preparation for an uncertain future, Ingulsrud said. Federal farm subsidies might be cut and trade agreements are likely to push the price of sugar down.

American Crystal has bowed to union demands in the past, but in considering the costs of a seven-year contract and anticipating costs of the next five-to-seven-year contract, the company simply could no longer accept the status quo.

The struggle between American Crystal and its workers is a reflection of a long trend in labor relations, according to Greg Cant, dean of the Offutt School of Business at Concordia College in Moorhead.

The issues of this labor dispute are not new, Cant said. Many companies used to pay most of employees health care insurance. But there's been a sharp shift of that cost to employees.

The use of non-union worker at American Crystal plants is a key issue of negotiation for union members.

That battle has been fought many times over the past couple of decades, Cant said. Companies want to retain or reward employees based on merit. The union wants to protect it's experienced workers.

"This idea of holding on to seniority is a very common theme. It tends not to win over the long haul," Cant said.

The unions that do win are those whose members have very specialized skills, Cant said. Examples are professional football players, or airline pilots who can't easily be replaced.

Cant said workers at American Crystal Sugar don't have a strong bargaining point.

"I don't want to infer there's no skill in their job, but if they're working with machinery, there's other people who can do that," Cant said.

"You're not in a strong bargaining position if someone else can come in and say, 'I can do that job, and come to think of it I'd be prepared to do it cheaper than you because it's better than being unemployed.' "

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