No talks scheduled as American Crystal plans to keep using replacement workers

There appears to be no end in sight to the labor impasse between American Crystal Sugar Co. and 1,300 union workers at its facilities in North Dakota, Minnesota and Iowa.

There appears to be no end in sight to the labor impasse between American Crystal Sugar Co. and 1,300 union workers at its facilities in North Dakota, Minnesota and Iowa.

No talks have been scheduled between the two sides and an official with the nation's largest sugar beet processor said the Moorhead-based company doesn't have any current plans to resume negotiations.

Members of the union overwhelmingly rejected the company's "final" contract proposal on Saturday. The company responded by locking out union workers when their contract expired at midnight on Sunday, bringing in replacement workers.

Workers picketed outside American Crystal plants on Monday and Tuesday. Union representatives say workers will continue picketing outside the company's sugar beet processing plants in East Grand Forks, Crookston, Drayton, Hillsboro and Moorhead as well as packaging and transportation sites in Chaska, Minn., and Mason City, Iowa.

Brian Ingulsrud, vice president for administration at American Crystal, said replacement workers will remain on the job for the foreseeable future.


"We have no timeline at all at this time," Ingulsrud said on Tuesday afternoon. "We have no meetings scheduled. We are focused on making sure the contingency plan is implemented and we are able to continue shipping sugar of a high quality safely."

Local union representatives say they are willing to return to the negotiating table, but no meetings have been scheduled. Union officials have been in contact with the federal mediator assisting in the case lately, but Ingulsrud said the company has not talked with the mediator since it presented its final contract offer.

"We made our final offer," Ingulsrud said. "We felt it was a terrific one. We're still amazed the union voted no on it."

The out-of-town replacement workers at the plants have been contracted for the company by Minnetonka, Minn.-based Strom Engineering. Ingulsrud said he doesn't believe the replacement workers have much experience working at sugar processing plants. But he said the company is providing training and is prepared to use replacement workers during the fall sugar beet harvest season, if necessary.

"We have very experienced and skilled replacement workers on the job," Ingulsrud said. "We have no reason to believe they won't be able to operate the factories very efficiently."

But John Riskey, president and business manager for the local union which represents workers at the East Grand Forks, Drayton and Moorhead plants, said he is skeptical that replacement workers would be able to adequately replace experienced union workers.

"You just can't bring anybody in without training," he said. "We've spent many years learning it and working at the factories. We have some very skilled workers that make Crystal Sugar very efficient. They get peak performance out of their factories. It's going to be tough for replacement workers. It will hurt (the company's) bottom line. Then there is the safety aspect. There are some dangerous, dangerous elements in that environment."

Pay increases proposed


The company's final five-year contract proposal to union workers included an average 4 percent wage increase in the first year, followed by annual percentage increases of 3 percent in the second year and 2 percent in each of the final three years of the contract. If they had approved the contract by Aug. 1, workers would have also received a $2,000 "signing bonus."

Year-round full-time union employees at American Crystal have an average annual salary of about $50,000 per year, Ingulsrud said. He said when the value of their union benefits package is included, that number reaches an average of $75,000 per year per union employee.

But local representatives for the Bakery, Confectionery, Tobacco Workers, and Grain Millers International Union say the proposed wages aren't the problem.

The two major points of contention among union reps appears to be language changes the company inserted into the contract proposal and providing union employees with the same lower health insurance coverage currently provided to non union workers.

With about 97 percent of union members casting ballots, the company's contract proposal was voted down by a resounding 96 percent.

"The main problem is the language," Riskey said. "The language they have strips our contract rights away."

Controversial language

American Crystal did make some changes to the wording of its original contract offer in regards to subcontractors in response to concerns about the company replacing union employees. The company says the new wording prevents it from subcontracting work already done by union workers that would result in layoffs.


"It's not our intention to break the union with this," Ingulsrud said, adding that the implication that the wording would put union workers at risk of losing jobs or being demoted "simply isn't accurate."

The company had also sought to make changes to its attendance policy, seeking to crack down on absences and tightening restrictions for unscheduled absences.

Health insurance increases

American Crystal currently pays 94 percent of union employees' medical expenses under its health care plan, with workers paying the remaining 6 percent, Ingulsrud said. The company is seeking to provide union employees with the same health care coverage provided non union workers, with the company paying 83 percent and workers contributing 17 percent.

Ingulsrud said most union workers' monthly premiums would increase to $73 a month for those with family coverage and $24 per month for those with single plans.

"Health care costs keep rising at an almost uncontrolled pace," he said. "We felt that we needed to address the situation."

Ingulsrud said that while union workers would pay more for health insurance coverage, the average union worker would be $15,000 better off over the life of the new five-year contract then they were under the old contract that was approved in 2004.

Union officials disputed those numbers.

Dan Kressin, secretary of the union local at the Crookston plant, said the new contract would amount to an average 10 percent decrease in take home pay per worker when benefits are factored in during the first year of the contract, with the numbers getting worse after the first year.

"With that last contract we gave up a lot," Kressin said. "We have gotten 2 percent raises for the last seven years. We did that in order to keep our health insurance. We need our insurance. We have a lot of younger and older workers. Their families depend on the insurance."

Ingulsrud maintained that the company's contract offer was fair and suggested those with questions about the contract offer visit a Web site set up by the company detailing the offer, including a copy of the document, at

"We provided a very good final offer," Ingulsrud said. "We expected that final offer would be ratified. We put our cards on the table with that final offer. Where do you go from here?"

Schuster reports on business. Reach him at (701) 780-1107; (800) 477-6572, ext. 107, or email . Follow Schuster on Twitter at @RyanSchuster.

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