Members for Democracy Archive

How Loblaw funds the unionization of Wal-Mart
By Hugh Finnamore

There's seldom anything as riveting as a battle between good and evil. The supposedly good retailer Loblaw Cos. and its President's Choice union, the United Food and Commercial Workers Union (UFCW), are fighting mythically evil and resolutely non-union retailers like Wal-Mart and Costco.

In reality, Loblaw is hell bent on keeping Wal-Mart out of Loblaw's $25-billion share of the Canadian grocery business. Meanwhile, it is fiercely determined to horn in on Wal-Mart's multi-million-dollar turf by getting into the general merchandise game in a grand way.

For the past two decades, the UFCW has taken beating after beating at the hands of just about every employer it has come up against. The union is bleeding members, its bank accounts and pension plans are hurting, and its labour contracts are in full retreat from the halcyon years. The once-formidable food union is reduced to begging the big retailers and meatpackers for more members and less onerous contract concessions.

Meanwhile, Loblaw officials know the best way to fight Wal-Mart is to slash its own operating expense, the bulk of which are made up of labour costs. That benefit would be optimized if Wal-Mart's operating costs were forced upward with union contracts more costly than the ones Loblaw operates under.

However, for that Loblaw dream to come true, the UFCW would have to accept some pretty sweeping collective agreement changes, and a union would have to successfully organize a whole whack of Wal-Mart employees. Astrologers would say that there would have to be a mighty alignment of the stars and planets to make Loblaw's fantasy a reality. Voila! The stars did align in late 2002.

Loblaw got the UFCW to accept much lower wage rates and working conditions that rivalled non-union Wal-Mart's. In return, Loblaws has quietly pumped nearly $1-million into UFCW coffers and it has promised to add close to one-half million dollars more within the next 11 months. The money is a gift to three separate local unions to help the UFCW with "Education and Communication initiatives."

The $1.35-million gift could go a long way toward educating Wal-Mart employees to the misguided perception that they would actually benefit from joining the UFCW. It could go a long way toward communicating that Loblaw is good and Wal-Mart is bad.

The money and promises of much more materialized after a UFCW-controlled pension plan started heading for the rocks. The Canadian Commercial Workers Industry Pension Plan (CCWIPP), with a membership of close to 200,000 workers, was sick and much in need of huge cash infusions.

In mid-2002, the CCWIPP went cap in hand to Loblaw and other employers to beg a 30% increase in employer contributions. This was begging at its best because it happened in the middle of Loblaw's multi-year collective agreements. The employers could have legally told the UFCW to take a hike until the contracts expired in 2006, but Loblaw didn't.

Instead, Loblaw gave the CCWIPP a large cash infusion. Then the hugely profitable grocer put the arm on the UFCW for a multi-million-dollar deal of its own. According to a December, 2003, Ontario Labour Relations Board decision, Loblaw plans to open at least 40 mammoth Real Canadian Superstores in Ontario by 2005. Loblaw claimed that "would require changes to the collective agreements to allow the new superstores to be more competitive with its non-union competitors like Wal-Mart."

That's when Loblaw gave the UFCW an ultimatum: If the UFCW agreed to give Loblaw massive contract concessions, Loblaw would continue their mutually profitable partnership. If the UFCW refused, Loblaw would terminate the partnership by closing its unionized stores and opening non-union stores in the future. However, it didn't stop there. Loblaw got assurances that the UFCW was prepared to wage an expensive drive to woo Wal-Mart employees. Sometime after Loblaw discussed forking over the $1.35-million for communications, the UFCW began to boast that "A major effort is underway. The union has made a long-term commitment to persuade Wal-Mart workers to join UFCW Canada."

Even though the UFCW did the concessionary deal with Loblaw in secret, when the members caught on, the union did publish a sanitized spin on what was in most of the deal. However, little if anything was publicized about the $1.35-million for "Education and Communication initiatives."

Retailers operate in a fast paced, fiercely competitive marketplace. Change is swift and often radical. Industrial unions by their very nature oppose radical change unless that change involves death knocking at the door. In effect, Wal-Mart is no more anti-union than any other retailer. It's just more effective in keeping unions out.

"Loblaws is as anti-union as Wal-Mart and probably more dangerously so, says Ontario labour relations specialist Wanda-Marie Pasz. "The veneer of representation provided by the UFCW presence renders Loblaw workers more vulnerable to exploitation and less able to seek out real workplace representation than the workers at Wal-Mart."

This whole Evil Empire thing seems to be more about stifling competition and maximizing union dues than about protecting the rights of oppressed workers.

This commentary appears in today's Financial Post. Reprinted with permission of the author.

I take your point, BN.

I sense from your post, one must not be having a sunshine fun-filled day.

Cheer Up, BN...I don't believe there are many forums that would permit such strong language, are there?

Tomorrow is another day, I wish nothing but sunshine and happiness for you! Cheers!

Fuckit Bugs? Fuck what? I'm not sure how ignoring labour-management collusion is going to help you organize people. Because you don't have a pension plan, millions of others shouldn't have one either or should stand idly by while their leaders plunder theirs? Perhaps you're a guy who just wants to be one of the rulers and your frustration is that the system just won't let you in.

You're not making a great deal of sense Bugs. I sense this is the spewing that comes before the flame-out. You're a pretty predictable guy.

If I'm wrong then please respond to the questions I've posed for you.

Don't be so coy bunny. You've been arouind a few forums in your day. This is just one forum you can't destroy.

What's even more scandalous is that the UFCW took Loblaw's Wal-Mart bleatings and passed them off as an imminent apocalypse.

The Toronto Star had a great article by David Olive on August 29 called 'Hitting the Wall.' Mr. Olive is one of the few to understand that Loblaw Companies didn't just fall off the turnip truck. They are known as one of the few retailers who can 'out-walmart' Wal-Mart.

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In pointing to its rosy future, Wal-Mart reminds stock market analysts that for all its size, it still commands just 8 per cent of the U.S. market. What it doesn't mention is its traditional reluctance to lay claim to the other 92 per cent, located in unionized markets with customers more demanding of smart store design and quirky merchandise. Which long ago prompted the Bentonville braintrust to seek growth offshore.

But here again, Wal-Mart has encountered tougher competition than expected, from entrenched retailers like Canada's Loblaw Cos., Germany's Metro, Aldi and Lidl, and Japan's Aeon Co. - companies that are accustomed to paper-thin profit margins, and have made a priority of replicating the logistics acumen and pricing formula that underpins Wal-Mart's success.

In Canada, Britain and Mexico, Wal-Mart's sole foreign triumphs, it has won largely by default, filling a void created by the weak Canadian players T. Eaton Co. and Hudson's Bay Co. and Britain's J. Sainsbury, and in Mexico through acquiring its largest retailer.

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There was no need for the concessions at this time and probably never.

Why did Loblaw need wage concessions when it readily bumped its pension contributions by 30% and readily coughed up a mil and better for the UFCW brass to play with as they saw fit?

David Olive'sHitting the Wall article about Wal-Mart.

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They should be putting the international's leadership on the backs of milk cartons.

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As funny as that is, I'd hate like hell to open my fridge and see brooke's mug on my milk carton. Do us a favour, use one of ufcw's media schemes if you're serious about finding them.

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Unfortunately, it ends there. Any effort to marshall a massive effort to stop this crap has been overruled. I know you guys are smarter than this. You have to understand where this will take us. Every time a new worker/member is stripped from participating in our benefit plans, it brings us that much closer to the funds collapse. With each new shitty contract ratified, we are closer to extinction.

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Sorry this just begs the question; has labour's soul already been sold? It's easier to believe that than to believe leaders stand silently by while workers/labour burns and employers thrive.

What if ufcw were successful organizing walmarts, what then? What's to be accomplished with 3 mil members (mainly disadvantaged workers) that couldn't be done with 1.4 mil (mainly disadvantaged workers)?

If one counts ufcw debacles (and we are), the blatant disregard for the retail battle in favour of a misguided political dream, and regression of workers rights while leaders appear to look on, it consistantly looks more like a capital venture.

The few locals still reflexing not withstanding, the thousands of members empowering themselves notwithstanding (pun intended)

It pains me to see what's happening with our way of life and to know there is virtually nothing I can do to stop it. I guess it's like being a pedestrian and knowing two cars are going to collide and people are going to get hurt and not being able to do anything more than shout. God knows this has at times eaten away at me to such an extent I've lashed out at more than one innocent bystander. There are some people at work who've never been members of a union and they regularly ask me questions about 'how' unions have failed working people, and 'why' anyone in such an important position would even do something so terrible. I find it difficult to contain my emotions so that my explanation isn't lost among all the frustration thereby compromising it's validity.

The UFCW is in such a huge hole. There is simply so much fat that needs to be trimmed from the top it's mind boggling. 1518 alone has more than 40 business agents! That's just ludicrous! That money should be put into education and training, health and dental benefits for retirees and pensions. Not to mention properly building and maintaining sufficient war chests to deal with employers who both need to be organized, as well as 'reminding' current unionized employers that the company's other major stakeholder is entitled to proper respect and consideration. But alas that isn't happening because in order to accomplish this the membership would have to be brought back to the forefront of power and responsibility, and system insiders simply don't believe Joe Six-Pack can be trusted.

What a predicament we little guys find ourselves in huh? My employer for instance has an unprecedented record for treating it's employees with the utmost respect. Which for me, a 3rd year employee is darkly humorous at best. I wonder if the 14 year employee who had the audacity to have family troubles (thus effecting the persons 'attitude') would agree after they were just recently unceremoniously let go without so much as an explanation? I know my own personal opinion. Or how about the other 12 plus people in the past 6 months alone? Not to mention the subtle threats from management that if anyone is caught talking about this they too will be fired.

Yes sir, it was only a year ago I let my instructor at school talk me into contacting the owners of our company to submit a 25 page report I wrote on how to make our company a high performance, superior employer. I remember my entire class cheering when I told them the owners were interested, they seemed to think I'd really have an impact. For my part I supposed I just wanted to believe there was an employer out there who practiced what they preached, and truly cared about their employees if for no other reason the 'Service Profit Chain' doctrine professed it was in the employers best interests. To date we have not had that meeting, nor have I made public that document. What for?

I think most of us understand that executives are in business to make money but what I believe confuses us is that we fail to recognize that that only translates into 'personnel' income for the individual executives involved. The same is true of union executives. These people sit around a table and discuss how to share the pie for 'themselves' and even the best interests of the company itself is secondary. Enron was merely a public example of what I'm suggesting. Who cares if the company is profitable long term, how much cash can we milk out it now?

The people hurt are principle stakeholders such as the employees and to a lesser extent the taxpayers who need that business revenue in the form of taxes to offset community development needs. All so a very small few can make themselves filthy stinking rich. I'd like to know why these people feel they are entitled to ride to work in a limo while the people who make their life style a reality are forced to take the bus?

Personally, the idea that an employer is working together with the union in matters of education isn't in an of itself a bad idea. Personally, in such a competitive industry employers who co-operatively work with union staffers to develop and pay for education such as leadership, conflict resolution, public speaking, marketing, accounting etc only benefit themselves long term. Unions can open education and training centres and receive a tax break or government grant and I think employers are foolish not to invest into programs co sponsored by the union. Imagine the value in building that kind of workforce when competition for effective managers really heats up?

I guess even courses on effective organizing techniques would be in a unionized employers best interests too but I'd be more than just a little bit worried about the potential for abuse. I think that's what's really at issue on this thread is it not? This isn't about employee and/or community development it's about dirty tactics and in that sense I think it's wrong. I don't believe the underlying interest for this employer is fair competition and an equal playing field, it have a hunch it's about a 'relationship/Partnership' with a corruptible union the company hopes to use to it's advantage over the competition. That to me boarders on the illegal.

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Not so in the US of A-holes.

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There's a teachable moment here for our friends in Canada UN. If anyone from CA wants to jump in, it might help, because i'm not that familar with the details. Here's my recollection.

In the mid 90's, the California locals and retailers were making bushelbaskets of money. The economy was good, the benefit plans were soaring from excess investment income, and it looked like it would never end.

Strangely, the locals got sucked into this fear that walmart was coming, and rather than create better contracts, they struck deals that made no sense. They reached partnership agreements that allowed employers to stop making payments to the trust funds.

Called benefit holidays, they saved the employers millions/billions(?). In return, the locals were given back part of the savings. Seems to me some of it went to the members and some the locals used to develope programs to fight walmart.

About that same time, they formed a national Joint Labor Management (JLM) committee. Once again it was under the guise of a concerted effort to combat the non union retail operators entering the grocery business. For all practical purposes, it no longer exists. The employers ended their contributions; they found it was easier to fight the union than to fight walmart.

The point is, these employers used the union leadership to get their needs met and when they didn't need them, kicked them to the curb. As i watch this same crap unfold with Loblaws, you know it's only a matter of time before they do the same shit in Canada.

In fact, as i read Johnny Roberts post on elimiminating full time jobs, it's pretty obvious. That won't be a conscession; laying off ft workers will be a necessity due to business needs.

Brotherwolf2's post is so on target. Forget all the spin and hype from employers on how they value their employees. When push comes to shove, the employer will take what they want and leave the crumbs for those who survive.

The salvation for organized labor is creating a massive movement of workers who will demand social and economic justice. That won't happen through partnerships, but through force. I guess the good news is, as more workers get pummeled we get that much closer.

We were out with friends last nite that have never been union. They are republicans ( i don't hold that against them ), and they said the husbands employer just cut his salary by 30% and took away his expense account...it happens every day...and workers just take it.

The time is coming when workers will look for real solutions. It's clear the path the UFCW is on isn't the answer. In fact, in a coming thread ,we will explore what path the UFCW is on. As unionnow pointed out, there was no help for US benefit plans, the employers goal is to destroy them; and is doing a damn good job of it.

I'd like to know if Mr. Finnamore has qualified any of his data.

In his claim about Loblaws contributing to ccwipp, I don't understand because the vast majority of Loblaws' unionized workerd are not members of ccwipp.

Loblaws unuionized workers are not part of ccwipp as the FSCO informed me.

Zehrs, No Frills and who knows else are part of CCWIPP.

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posted by bb:
Loblaws unuionized workers are not part of ccwipp as the FSCO informed me.

Zehrs, No Frills and who knows else are part of CCWIPP.

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BB. did you actually need to contact FSCO to find out that you were not a member of ccwipp?

Would National Grocers like to comment Mr. Green?

Getting back to the subject of this post...it occurs to me that all these millions that the Loblaw Companies are giving to the UFCW to get a competitive advantage on Wal-Mart are, of course, money down the drain if the purpose of these payments has anything to do with the UFCW's efforts to organize Wal-mart. It's never gonna happen people - not in a million years.

Wal-Mart knows how to work the labour relations system to its advantage. The system will not change to suit the UFCW or Loblaw Companies.

Even if the system could be changed to prevent companies for dicking around, the UFCW has painted itself into a corner with its track record of concession bargaining. Wal-mart workers have no incentive to want to join a union that bargains wages, benefits and working conditions similar to the ones they've already got.

With each successive organizing loss, the UFCW acquires the image of a loser. The union that can't organize Wal-Mart.

I'd say that neither party to these funding transactions is thinking with its head.

I don't get it. The "business" of the UFCW is to, supposedly, represent all working people on the face of the earth (and apparently three of the planets). Another part of its business is to organize the unorganized.

They recently crowed about raiding another union for members (but that was okay 'cause that union wasn't an "affiliate). However, they are dismal failures at organizing Wal-Marts. However, since Loblaws started funding the organizing of Wal-Mart, the UFCW has finally gotten off its over-sized ass.

In my opinion, it would seem that the UFCW lacks the money to organize Wal-Mart and, therefore, it has to rely on employers to help it to organize. That's not very good.

Loblaw got a cheap contract out of the deal. The UFCW was promised millions of dollars in cold-hard cash, locked-in access to new members, pumped-up contributions to its oh-so-sick pension plan and a pledge that there would be no concessions in the 2006 contract.

No concessions sounds like a good deal, but what's missing is any mention that there will be an increase in the 2006 rates or benefits.

Now, a six- or 10-year contract with no increases is just the same as a contract with concessions. Inflation will eat the crap out of the existing wages and benefits.

The new cut-rate contract mirrors Wal-Mart's wages and benefits. Therefore, doesn't it stand to reason that the 2006 contract will stay the same as Wal-Mart's benefits and working conditions?

At one time, Loblaw used to set the bargaining rates, and now everyone will wait for Wal-Mart to set the baseline.

Could the UFCW's new motto be similar to Zellers'?

THE LOWEST WAGE IS THE LAW

another way for the corp to save a buck
just do a endrun around the rcss deal and do this:

http://www.strathroyagedispatch.com/story2.html

Zehrs staff at risk as store plans change to No Frills

The 175 unionized employees of Strathroy's Zehrs grocery store could be out of work in the new year.
Last week, the company informed the store's 34 full-time and 141 part-time staff of its intention to close the local store as of Jan. 8, 2005, and reopen it as a No-Frills store.
Employees will then have the option of bumping union employees at another store in another town, or applying to work at the No Frills store.
"This is purely, in our view, the employer's greed," said Scott Penner, secretary/treasurer of Local 1977 of the United Food and Commercial Workers Union (UFCW) which represents the workers at the store. "They're just changing the sign on the store, and that's not right."
Union members were told the change was being made to allow the store to keep up with competition, like Walmart and Sobey's, which the company says are coming to Strathroy, said Mr. Penner.
Local Zehrs manager Dave Switzer was unavailable for comment on the store changes. No response from Zehrs head office was received by press time Monday.
The news of the store's closing came as a shock to employees, Mr. Penner said. Originally, he said, the company signaled its intent to expand the store and negotiated an appendix to the union contract based on turning it into a Real Canadian Super Store (RCSS) like those in other towns. The expanded size was intended to allow it to compete better with stores like Walmart.
Instead, the company went in the exact opposite direction with its decision to close the Zehrs store and reopen as a No Frills, said Mr. Penner. "This is the company not living up to what they said they were going to do."
The union is disappointed that the company decided to make the change to the store without trying to compete, he said.
The store has a long history in Strathroy, since opening in 1978, he added. "Not only have our members done a good job serving the public, but the employer has been making money."
The issue is not over yet, said Mr. Penner, adding that the union will fight the decision wherever possible.
"The local union is prepared to go and fight it at the labour board," he added. The union will ask for succession rights, which apply in situations where the name of a business changes, but the same type of operation remains in the same location. If succession rights are granted, the union would retain its status at the new store.

Yikes! Sweetheart deal turning sour.

Zehrs wants union to scrap Real Canadian Superstore agreement signed last year

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Zehrs management has threatened to close its Strathroy, Ontario store in early January unless UFCW Local 1977 ignores a key provision of the Real Canadian Superstore agreement reached last year to protect the wages, benefits and job security of existing Zehrs supermarket workers.

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Oh yes, and didn't Loblaws promise to not ask for concessions in the next round of bargaining?

The UFCW is acting like it went on a date, dropped its laundry did the dirty thing and has been sitting by the phone waiting for it to ring. They now realize it wasn't love. Oh my gosh! They've told all their friends too!

The UFCW should have realized that is was strictly a business deal when it woke up to find a pile of quarters and dimes left on the dresser with a note saying here's a little to help with your pension and don't forget to use the rest to screw Wal-Mart.

Bugs Bunny had a saying: "What a bunch of maroons!"

No resolution yet to Strathroy Zehrs closure threat after discussion between UFCW Canada leader and senior Loblaw management

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TORONTO – A discussion on Wednesday between UFCW Canada National Director Michael J. Fraser and Loblaw Companies Industrial Relations Vice President Roy Conliff ended without a resolution to Strathroy Zehrs crisis. Both parties agreed to continue discussions.

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< insert remarks that mean the opposite of what they seem to say and are intended to mock or deride here >

So they've called in Mike Fraser. What the hell is that supposed to mean? Isn't he the guy who smoothed over the deal in the first place?

The union mentions his name as if it's supposed to elicit a chorus of ooh's and ahhhh's from the multitude. The company bumped up the pension contributions to the CCWIPP. The company committed close to $1.5 million to three UFCW locals and the company committed another $1.5 the UFCW national office. And the company promised to not ask for concessions in the next round of bargaining.

Did the company have to funnel millions into the UFCW mid-contract? No.

Did the Union do a major communications initiative to tell all the members about all the wads of dough the company pumped into the UFCW? No.

Is it reasonable to think that the company might want some "value" for its investment in the UFCW?

Think about this critically. The company wants more concessions. They are using the same M.O. as in late 2002, erly 2003. Do you think the UFCW will do anything different than they have done in the past? Has the company kept its promise to not ask for concessions in 2006? Hell, yes! This is only 2004. They've got well over a year before the couple of months of bargaining in 2006, and then they have a life time of claw backs waiting to be taken right after the bargaining in 2006.

Have you ever heard of a "limited time offer"?

Ya, Mike Fraser is back at the table with the Loblaws big boys. I'll hold my ooh's and ahh's for another day.