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Meatpacking company cuts compensation.

Meatpacking company cuts compensation

The troubled labor-management relationship at John Morrell & Co. was exacerbated when the company imposed cuts in wages and benefits on 2,000 employees of its Sioux Falls, SD, meatpacking plant. The company's action came after it declared an impasse in its bargaining with Local 304A of the United Food and Commercial Workers on a contract to succeed one that had expired in late November 1988.

Included in the imposed 4-year contract proposal, which had been rejected by more than 99 percent of the employees voting, according to the union, was a $1.75 an hour reduction in the $9.75 base wage rate. Even the $9.75 rate was $2 lower than the rate in 1982, reflecting the intense economic competition in the industry resulting from the growth of nonunion firms, new processes, and shifts in customer preferences.

Despite the cut and a history of work stoppages at company plants, including stoppages in 1987 at the Sioux Falls plant and the Sioux City, IA, plant, the president of Local 304A said the employees would not strike because a stoppage could negate awards for back pay or weaken filings of unfair labor practices charges against Morrell. The local maintained that the company's unilateral action "virtually destroys 50 years of bargaining" and will ruin the standard of living for the employees.

A company executive defended the reduced pay rate and benefits, contending that compensation was now in line with other plants in the industry. The official also said that the new $8 pay rate was still above the $6 rate that is "the real thing out there."

In addition to the intense union-management disagreement over employee compensation, Morrell and the union continue to clash over union complaints that Morrell is not correcting unsafe working conditions, underreports resulting disabilities, and returns disabled employees to their jobs before they are completely fit. Morrell was appealing a $4.33 million fine proposed by the Department of Labor's Occupational Safety and Health Administration for allegedly willfully exposing workers to unsafe conditions.

Elsewhere in the meatpacking industry, the Momence (IL) Packing Co. and United Food and Commercial Workers Local 546 negotiated a contract that called for lump-sum payments in lieu of wage increases. The payments, totaling $2,500 over the 3-year term, apply to all employees on the payroll at the time of settlement. A company general manager said the decision to freeze wage rates for the 250 pork processing employees was necessary because rates at competitors were at the lower end of the $7-$7.75 range existing at Momence.
COPYRIGHT 1989 U.S. Bureau of Labor Statistics
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Article Details
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Title Annotation:Developments in Industrial Relations; John Morrell and Co.
Author:Ruben, George
Publication:Monthly Labor Review
Date:May 1, 1989
Previous Article:Charges against Teamsters resolved.
Next Article:Pennsylvania Turnpike accord.

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