1,300 workers locked out at American Crystal Sugar

MOORHEAD, Minn. – About 1,300 union workers at seven American Crystal Sugar plants found themselves locked out of their jobs Monday, sitting outside company gates as a contract battle centered mostly on health care benefits and job security continued.

Workers were locked out of facilities in Minnesota, North Dakota and Iowa in the company's first labor impasse in 30 years. The union's contract expired at midnight Sunday after workers overwhelmingly rejected what the company called its final offer.

Replacement workers were on the job, although the company is currently in off-peak mode and not processing beets.

"It's not fun to be locked out," said Mike Haley, 52, a company mechanic who was holding a "No Lock Out" sign Monday outside the Moorhead plant.

The largest beet sugar processor in the U.S. had offered a 17 percent pay increase over five years during negotiations that began May 6, but workers were upset about provisions covering job security and health care costs. Although American Crystal accounts for 38 percent of the country's production of sugar from beets and 15 percent overall, the company said it doesn't believe the lockout will affect sugar production or the industry outlook.

"We don't intend to miss a beat," said Brian Ingulsrud, vice president for administration.

The union disagreed that employees were easily replaceable.

"The jobs we do, it's not rocket science, nor are we brain surgeons," union representative Mark Froemke said Monday. "But the jobs we do in the factory are very skillful jobs. I just don't believe they are going to be able to run factories with transient workers who have never been in a sugar factory."

The company has plants in East Grand Forks, Moorhead, Crookston and Chaska, Minn., and in Hillsboro and Drayton, N.D. and Mason City, Iowa. Replacement workers arrived before dawn Monday. Officials were specific to describe the new workers as temporary and said there were a few hundred of them on the job, but refused to provide further details.

The last negotiations came in in 2004, when the union approved a contract that raised salaries by 2 percent and locked in health care costs for the 7-year life of the pact.

Union officials in Moorhead said they will have members stationed at six gates, 24 hours a day. A couple of workers sat at each gate Monday afternoon, holding signs and waving at people driving by on a nearby street.

"Hang in there, guys. I hope you make it," yelled one man from his pickup truck.

Law enforcement reported no arrests and Moorhead city workers on Monday afternoon took down parking barricades placed to keep traffic from backing up in front of the plant. Union officials called the protest "informational picketing" and promised it would be peaceful.

Brad Byklum, 60, a 35-year employee who was seated in front of a sign marked "Sugar Loading Gate," said relations between workers and management has never been worse.

"It's terrible," he said. "I think the public has only heard the company's side of the story."

Union officials said its workers earn between $30,000 and $50,000 a year, without overtime. Ingulsrud said the average wage is $50,000 a year, or $75,000 including benefits.

Some of the highest-paid workers at the plant are electronic control technicians, who operate the factory from multiple computer screens. Other workers include with skilled welders, mechanics, boiler operators, pay loader operators and warehouse workers. Company officials said the plant needs "a very large contingent" of maintenance workers to keep the factory operating when it goes around-the-clock for about 250 days.

Sugar beet processing generally begins at the end of August each year and is wrapped up in May. The plant is currently in its so-called inner campaign, when workers spend most of their time retooling and replacing equipment.

Ingulsrud said the company is "shocked and surprised" that employees rejected the deal.

"We offered what we thought was a terrific contract," he said. "Where do we go from here? I'm not sure."

Froemke said employees are upset about language in the contract on job security, as well as increased costs in health care and short term disability.

"This is a brutal contract," he said. "This is the destruction of 70 years of negotiations."

Ingulsrud said workers are being asked to pay more for health care, but claims it's a better plan than most. He highlighted the 17 percent increase in pay over the five-year span of the contract, and a clause that would not allow the company to hire subcontractors if it meant the loss of any union employee's job.

"We went back and modified the language that caused them concern," Ingulsrud said.