031040 Kroger Workers Expected to Reject Contract

Kroger workers in Indiana are expected to reject contract offers today that would limit health care benefits and wages for new hires -- a move that sets the stage for a possible strike as early as Nov. 2.

Throughout the day, employees represented by United Food and Commercial Workers Local 700 voted on proposals similar to ones that already incited 75,000 union workers in California, Kentucky, Ohio and West Virginia to walk off the job.

The vote tallies for the offer were to be counted by 10:30 p.m. today, said Rian Wathen, organizing director of the Indianapolis-based local. Local 700 represents about 4,000 Kroger clerks and meat cutters statewide.

In light of an outcome that followed the union's advice to reject, Kroger's management plans three negotiation sessions next Thursday through Saturday before the current accord expires at 12:01 a.m. Nov. 2, Kroger spokesman Jeffrey L. Golc said.

"We would like to get a ratified contract," Golc said today while voting was under way. "This is the best proposal that we know of."

Union leaders continued to prepare for a possible walkout.

"At this point, I think you have to be pessimistic," Wathen said.

Health care issues have become pivotal in talks with Kroger's organized labor force nationwide. Although each of its regions has a separate agreement, concerns over soaring costs have swept across state lines.

Kroger now pays all health insurance premiums for local union workers. But it wants to cap its exposure to premium hikes at 8% annually for the life of the two proposed contracts -- one for meat cutters and one for clerks -- with Local 700 that would expire in February 2008.

If premium increases exceed 8%, workers would be responsible for paying the surplus on health care claims, Golc said.

Under the current plan, 20% co-payments are required on claims, with no paycheck deductions. Kroger's proposal could call for employee co-payments of at least 25%.

Kroger also wants to cut costs by requiring employees to use generic drugs and by asking employees' spouses with non-Kroger jobs to get their primary insurance coverage from their own employers.

Ben Carter, vice president for collective bargaining for Kroger in Indianapolis, said the company did not ask employees to share in premium payments because the union had previously opposed that idea -- an assertion to which Wathen declined comment.

Golc said similar 8% caps were accepted last year for union workers in Fort Wayne and Terre Haute. Wathen called it a "temporary fix" and "unique situation," but declined to say if that was reflected in the wording of those contracts.

Wathen said the issue now lies with the 4,000 workers who fall under the Indianapolis contract.

"Kroger understands that everything depends on what Indianapolis says," he said.

Other issues include wages and pension benefits, which Kroger says would increase by $30 million. Pay raises approaching 12% also have been proposed for some employees, along with a 36% rise in pension fund contributions, Kroger officials said.

Under a current two-tiered system, most Kroger clerks start at $6.50 per hour, Carter said. Some clerks earn up to $12 an hour, with some meat department workers making slightly more, he said.

Wathen countered that employees with three years or less of service would see only small increases. Under its pension proposal, Kroger would contribute less into the plan over the contract and extend the time it takes for employees to qualify for their pension, he said.

Carter said the proposal continues to be far better than grocery workers in nonunion stores in Indiana, but that its labor costs run up to 5% higher than its biggest rival Wal-Mart.

Although Kroger had a net income of $1.2 billion last year, Wal-Mart -- with its non-union work force -- has surpassed Kroger as the nation's No. 1 grocer.

When asked how Kroger makes up the difference, Carter said, "We don't. That's why Wal-Mart makes all that money and we don't."

Wathen was not impressed.

"We feel like they can afford this," he said.

Golc said the company is willing to talk, but is resolute on its health care stance.

"We are not willing to have an open checkbook," he said.

While Kroger seeks replacement workers in case of a strike, Indianapolis-area shoppers offered varied opinions on how a walkout might affect them.

Far Southside shopper Therese Hawkins doesn't blame Kroger for advertising to hire temporary workers in case of a job action.

"I think it (a strike) is ridiculous because I don't agree with unions," she said.

Judy Wallman said she would boycott its 5911 S. Madison Ave. store on the city's Far Southside if a strike occurs. Union loyalty runs in her blood -- she grew up in a union family, was a member for about 30 years as a phone company worker and shops at union stores, she said.

"I grew up understanding that you don't cross a picket line," she said as she loaded plastic bags of groceries into her trunk.

Christine Leclerc, who carried two bags out of the Kroger at 1217 S. Range Line Road in Carmel, said she might avoid the store for a different reason -- convenience.

"If the lines get long, I might go to other places," she said.

Picket lines won't keep Mary Boarini from Kroger's Rockville Road store on the city's Far Westside. Product selection and favorable prices make her a frequent customer, she said.

"I love Kroger," she said.

Crossing a picket line isn't worth it, said Judy Fackenthal, who favors Kroger's workers. Her sister in California recently did so at a different grocery chain and was verbally harassed, she said.

Mark Kennedy, who shops at Kroger's 10450 E. Washington St. store on the Far Eastside, cautions against a walkout. An employee of Olin Corp. until January 2002, he took part in a four-month strike.

"They'll never make up what they lost," he said. "It's probably not worth striking."

The message is not lost on Kroger employee Brian Gaddie, who appreciates his $13-an-hour wage given he has no high school diploma.

"That's what makes Kroger unique from everybody else -- they treat their people good," he said. "They need to try to find a way to cut back, but keep what they've got for the employees.

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