American Crystal Sugar’s locked out workers reject contract for third time

Locked out American Crystal Sugar (ACS) workers on Sunday  rejected for the third time the company’s final contract offer by nearly a 2 to 1 margin. The company locked out 1,300 members of the Bakery, Confectionary, Tobacco, and Grain Millers Union (BCTGM) in August after they rejected the company’s first final best offer, which called for steep concessions by the workers.

The union and company resumed negotiations in May with the help of a federal mediator to resolve the dispute. The union offered a comprehensive proposal that addressed the company’s concerns raised during negotiations last summer, but the company refused to make significant changes.

The company’s final offer if accepted would have eliminated the workers’ comprehensive health care benefit, eliminated seniority, allowed the company to outsource more work, reduced overtime pay, eliminated weekend premium pay, eliminated health coverage for retirees,  and made it more difficult to file and win grievances.

The final offer would have cost workers, whose average salary is about $40,000 per year, thousands of dollars in lower overtime pay, reduced pay rate protections, and higher health care premiums and expenses. Furthermore, it would have eliminated any control that workers had over their jobs and busted their union.

ACS, the US’s largest sugar beet processor, operates five plants in Minnesota, North Dakota, and Iowa. It processes 38 percent of the nation’s sugar beets and produces 15 percent of the country’s sugar. It reported profits of $1.54 billion between 2009 and 2011. In 2011, it paid its CEO David Berg $2.4 million in annual compensation.

ACS is a cooperative of 3,000 beet farmers, who have received generous subsidies from the US government. Farmers belonging to the ACS cooperative received approximately $82 million between 1995 and 2010 through sugar beet subsidies alone.

According to John Strand of the High Plains Reader, the ACS Board of Directors chairman received farm subsidies, including the sugar beet subsidy, totaling $425,889 between 1995 and 2010.

Congress is now considering changing the sugar subsidy program, and ACS has spent $951,3000 on lobbying to protect the subsidies. Open Secrets reports that the company’s PAC contributed $2.2 million in 2010 and $1.4 million in 2012 to support candidates who support sugar subsidies.

While ACS spends lavishly to protect its federal subsidies, the lockout has taken a toll on its business. The Twin Cities Star Tribune reports that because ACS is relying on replacement workers to staff its processing plants, productions costs have increased $137 million during the first half of 2012.

As a result, this year’s projected payout to sugar beet farmers in the cooperative will be $59 per ton, well below the $73 per ton payout paid by another sugar beet cooperative in the Red River Valley.

The lockout has also affected local communities where the locked out workers work and live. A report by the Minnesota AFL-CIO estimates that the lockout cost local communities about $12 million between August and December because the company’s workers had less money to spend at local businesses.

“(American) Crystal sugar executives apparently can’t stand prosperity, and would rather waste millions trying to starve workers into submission than engage in constructive negotiations,” said a statement issued by the union after workers rejected the company’s last offer.

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