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Meatpacking settlements.

Meatpacking settlements

Farmstead Foods employees in Cedar Rapids, IA, and Albert Lea, MN, accepted a 40-month contract proposal that was essentially the same as one they rejected 3 months earlier. According to the United Food and Commercial Workers local union in Cedar Rapids, Farmstead was unable to significantly improve the offer because of intense competition from lower cost nonunion firms. The company also faced the possibility of competition from Quality Pork Processors of Dallas, TX, which was reopening a hog slaughtering line in a Geo. A Hormel & Co. plant in nearby Austin, MN, after negotiating wage and benefit terms with the union's Local 9. The slaughtering line-but not pork processing-was closed in January 1988 because of high labor costs, according to Hormel.

The Farmstead contract, covering 2,700 hog slaughtering and processing employees, provided for three hourly wage increases of 10, 12, and 18 cents, bringing base pay to $9.10 in January 1992. The employees will also receive a lump-sum payment in December 1990 equal to 10 cents for each hour worked in 1989.

Local 9's settlement with Quality Pork Processing included a company pledge to hire the employees it will need (variously estimated at 250 to 600) from a pool of 950 people who lost jobs when Hormel closed the hog slaughtering line. The agreement calls for an initial base wage rate of $7 an hour, rising to $9.10 in 1992.

The wage rate drew criticism from leaders of the union's locals at the two Farmstead plants. They contend that Quality Pork would have a cost advantage in buying hogs from farmers. However, Local 9 officials in Austin maintain that the combined wage-cost of the Quality Pork- Hormel operation would be comparable to that at Farmstead. Hormel, which buys carcasses from the Quality Pork slaughtering operation, pays its workers $10.20 an hour, rising to $10.70 by March 1990 under a contract with the union. Meatpackers such as Hormel provide higher compensation for processing employees because profits are higher on such operations than on slaughtering.
COPYRIGHT 1989 U.S. Bureau of Labor Statistics
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Title Annotation:Developments in Industrial Relations
Author:Ruben, George
Publication:Monthly Labor Review
Date:Apr 1, 1989
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