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Workers locked out by American Crystal Sugar in August 2011 rejected a contract offer from the company for the fourth time this weekend. Each time the workers have voted, the margin rejecting the contract has shrunk, with 55 percent of the workers voting against it this time.

The five-year contract proposal offers workers a $2,000 signing bonus and 13 percent pay raise over five years, but raises their health care costs substantially. Another major issue is that:

[...] it would give management more rights in determining key workplace issues. For instance, seniority—a basic union tenet—would lose its importance in worker advancement.

"This is about power—a shift in power from a partnership to unilateral power on management's part," said Peter Rachleff, a history professor and organized labor expert at Macalester College in St. Paul.

Gaining unilateral power is so important to management that it has sacrificed profits to break the workers and get its way. The company's annual report shows that:
  • Profits have fallen. Net proceeds fell more than 30% in fiscal 2012 to $555 million, compared to $811 million for the fiscal year that ended August 31, 2011. The amount received by growers per ton of beets fell more than $14 to $58.67. In contrast, farmers at Minn-Dak Farmers Cooperative are projected to receive $74.05 per ton in 2012. Western Sugar expects $82.70 per ton, and Michigan Sugar expects $87.74 per ton.
  • Production is down. Tons of products produced and sold declined more than 15% in fiscal 2012, to the lowest level in a decade. Production of molasses—a less valuable product compared to sugar—grew 124% due to storage problems and production delays.
  • Debt continues to rise. Short-term debt increased to $110 million at the end of August 2012, a 66% increase from the $66.2 million in debt at the end of fiscal 2011, and a 2100% increase from $5 million in debt at the end of fiscal 2010. American Crystal had its lender increase its line of credit by $60 million.
  • CEO pay remains high. CEO David Berg received $1.7 million in total compensation in 2012, including take-home pay of $659,000.
Last year, Berg insisted that the union contract was a tumor and that the costs of the lockout were an investment. That's looking like a pretty costly "investment."

During the 16-month lockout, more than 500 of the 1,300 locked-out workers have retired or quit. Those who are still holding on have exhausted their unemployment benefits.

Originally posted to Daily Kos Labor on Mon Dec 03, 2012 at 09:07 AM PST.

Also republished by In Support of Labor and Unions.

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