090310 Smithfield Faces Difficult Union Negotiations

(Newport News, Va., Daily Press) -- Before Smithfield Foods Inc. closes one of its two local pork processing plants and transfers some of those employees next door, it must first determine how to integrate two sets of workers represented by two labor unions - each with separate contracts with the company.

As the company gradually shuts down its South facility over the next several months, it plans to transfer roughly 750 of its 1,375 employees represented by the Laborers International Union of North America to the adjacent North Plant, whose 1,600 workers are represented by the International Brotherhood of Teamsters.

In the coming weeks, Smithfield hopes to forge agreements with both unions that would allow the displaced Laborers to join the ranks of the Teamsters. The company plans to work to ensure that workers will be able to make the move with their union seniority preserved, thus ensuring that long-time workers will continue to get benefits similar to what they've got now, said Jeff Gough, Smithfield's vice president of human relations, in an interview this week.

But the negotiations, which Gough said should begin within a month, are expected to be difficult, especially with the Laborers still smarting from the company's decision to cut 630 local workers from the payroll.

Several South Plant workers told the Daily Press in recent weeks that they're concerned about losing seniority if they're forced to leave the Laborers union to join the Teamsters. Those workers fear that as new members of the Teamsters, they'd move to the back of the line, with their hourly pay dropping to an entry-level scale and retirement benefits accrued over several years resetting.

"Our goal is to not have that happen," Gough said. "We're taking the approach that the South facility is being shut down, and those employees who transfer will be employees at the North Plant and part of the Teamsters union with their seniority intact."

Essentially, the company intends to eliminate the Laborers union in Smithfield, an effort that would allow Smithfield to more efficiently negotiate with its workers.

Although the unions have similar labor deals with the company, an agreement that would combine workers under singular representation also could eliminate potential strife among employees. Without a deal, for example, two workers with equal experience and tenure working side-by-side on the same production line could be earning a different wage and receiving different benefits.

"We have a good relationship with the Teamsters, and I hope we'll be able to work out a fair deal," Gough said. "We're going to do everything we can to protect and take care of (South Plant workers), and I think we'll be successful."

Anthony Foster, business manager for the Laborers Local 1046, declined to comment on the upcoming labor talks.

But if the Laborers fold, Foster would likely lose his leadership role, a full-time position that paid him $44,000 in 2006, according to public records.

"We're still trying to figure out what the company's plans are right now, so I have no comment on anything," he said.

Vanessa West, the secretary-treasurer of the Teamsters Local 822, did not return several calls made to her office and cell phone this week.

Smithfield announced plans to shutter its South Plant as part of a large- scale consolidation intended to save the company $125 million a year by 2011. Of the plant's 1,375 workers, the company said 1,035 will be offered transfers - about 745 to the adjacent North Plant and 290 to company plants in North Carolina, for an effective loss of 630 jobs locally.

Gough said this week that South Plant workers who will be moved to the North Plant, also known as the Gwaltney facility, will begin the transition over a several month period beginning in June. The transition is expected to be completed in January.

To increase capacity at the North Plant to accommodate additional workers and product lines, Smithfield plans to spend about $25 million on a capital construction project that is slated to begin in the second quarter this year, Gough said.

A majority of workers whose jobs are eliminated locally will have the opportunity to move to other Smithfield plants across the country, but whether those employees will opt to relocate "will be a personal decision for those workers."

Because the company and the unions have yet to start formal talks, it's unclear whether workers will be offered relocation assistance. Other details, including severance pay, job-placement assistance and an extension of benefits for displaced workers also will likely be on the table once negotiations begin.

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