041022 Wage Concessions by Tyson Workers

On the labor front, Tyson has been able to extract huge wage and benefit concessions from employees in numerous plants. At one plant, Tyson was able to convince 87% of UFCW workers to accept a 19% cut in pay, even after a one year strike!

What's happening here? When was the last time the industry saw such extreme concessions by the UFCW? It looks like Tyson is having no problem setting itself up as the BIGGEST, LOW-WAGE, Competitor in the Industry. That means BIG problems for the rest of the industry.

Don't look now, but Tyson -- despite all its talk of concern for the "community" and the greater good -- has embarked on a course that will spell disaster for the rest of the industry. Read on...

Workers at Tyson Foods' deli meats plant in Cherokee, Iowa, approved a new contract reluctantly accepting Tyson's demands on pay and health care.

Since Tyson's 2001 purchase of IBP the company has harmonized employee health care benefits and narrowed some pay discrepancies between plants through new union contracts -- raising pay at some, lowering it at others.

The 600 workers in Cherokee, IA covered by the new five-year contract will pay 25% of their health care costs beginning in January 2006, as workers at other Tyson plants do now. The company has paid all health care costs at the Cherokee plant, and the issue was the main sticking point in nearly a year of negotiations. Workers had not had a contract since March.

Eighty-seven percent of workers approved the new contract.

The contract freezes hourly wages at $10.69 and lowers wages for new employees to $9, in line with similar workers at other Tyson plants.

As in other contracts at former IBP plants, Cherokee workers will get a $1,500 signing bonus. Workers also will get payments of 2% of gross pay at the end of each year.

Privately owned meat companies once based compensation on regional conditions, and pay and benefits varied widely. But as large publicly traded companies such as Tyson and Smithfield Foods have boosted their shares of the meat industry, profit margins have tightened, and wage and benefit disparities have shrunk.

John Kretzschmar, a labor studies professor at the University of Nebraska at Omaha, said that as unions lose their power, companies will compete to lower wages, but will be constrained by an incentive to lower employee turnover.

For some plants, that has meant lower wages and benefits. After a year on strike, workers at Tyson's Jefferson, Wis., processing plant in February accepted a contract that included a 19% wage cut for new workers, to $9 per hour; a wage freeze for existing workers; and the 25% health care payment.

At other plants, pay has risen. Production workers at Tyson's Dakota City, NE, beef plant signed a contract in August raising their hourly pay 13% over four years to $13.65.

Both the Jefferson and Cherokee plants had been owned by Doskocil Cos., known for its high wages, before becoming part of IBP and, later, Tyson.

Though the contracts have made pay more similar among Tyson plants, company spokesman Gary Mickelson said wages are still determined on a plant-by-plant basis.

Jim Brummond, president of the union in Cherokee, didn't hide his disappointment with the new contract. "It's the best we're going to do," said Brummond, president of the United Food and Commercial Workers Local 179. "It'll give the workers time to plan for the future" because the new health care costs -- $27 to $40 per week for families, $10 to $15 for individuals, plus higher deductibles -- don't begin until 2006.

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