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Published July 28, 2011, 08:15 PM

American Crystal Makes Final Offer to Union Employees: 17 Percent Wage Increase

Union workers at American Crystal Sugar Co. will decide Saturday whether to accept what management calls its final offer or risk a lockout at the company's five sugar beet processing plants.

By: Wendy Reuer,

(AP) — Union workers at American Crystal Sugar Co. will decide Saturday whether to accept what management calls its final offer or risk a lockout at the company's five sugar beet processing plants.

The offer given to union negotiators Thursday night includes an 8 percent pay increase the first year, including a $2,000 signing bonus. Another 9 percent pay increase would be spread over the remaining four years of the contract for a total of 17 percent over five years. Pension fund payments also would increase.

The company also modified language on the hiring of subcontract workers, which had been a key concern of the Bakery, Confectionery, Tobacco Workers, and Grain Millers union. The new language prevents American Crystal from subcontracting work now being done by union employees if that would result in layoffs.

Union negotiator Mark Froemke said the wage offer was very fair, but higher costs for health care benefits would offset the pay raise.

"So even though you're making more on your check actually you're making less because of the cost of health care," said Froemke, head of the AFL-CIO's Red River Valley council.

Union leaders decided to make no recommendation to the 1,300 affected workers on how they should vote, said John Riskey, president of Local 167G.

American Crystal has said that if there's no agreement by midnight Sunday, union workers would be locked out Monday morning. The company said it threatened a lockout if there's no contract by Aug. 1 because the harvest begins in mid-August, and the beets are perishable.

But Vice President Brian Ingulsrud said he doesn't expect a lockout.

"The bottom line is we think we've presented a very attractive offer, and we're hopeful the union members will ratify it," Ingulsrud said.

The company's union workers make about $40,000 on average, according to the union, but the company says they average $50,000 with overtime. The company's offer would put union workers under its corporate health plan, not a separate union plan, so union workers, who currently pay no premiums, would pay more than $850 a year for family coverage.

About 100 union supporters rallied late Thursday on the Veterans Memorial Bridge.

"We're just asking for a fair contract," said Tony St. Michael, a union member at the rally.

American Crystal, the largest beet sugar producer in the U.S., is a cooperative owned by about 3,000 shareholders who raise 500,000 acres of sugar beets in the Red River Valley of Minnesota and North Dakota. It has facilities in both states.

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