Former AWG warehouse manager says union ‘bent over backward’

The bar at Chili’s is nearly empty except for Howard Terry. He sits reading a magazine, a frosty mug of beer before him. He has just come from the Associated Wholesale Grocers (AWG) warehouse in Kansas City, Kan., and he’s letting the world’s troubles slide by.

Terry worked for AWG for nearly 20 years before he walked away from his job as warehouse manager on April 3. It wasn’t really a tough decision for him, he says, after what he had seen happen to the grocery supply co-op’s workers and operations over the past six months. Officials with CS Integrated, the company now running AWG’s warehouse, asked him why he quit his job and tried to talk him back into it. “I told them I would send the company a résumé and left it at that,” Terry says.

He drinks slowly as he tells about his experience at AWG. He shakes his head now and then. Terry has striking blue eyes and appears healthy and strong. His handshake and physique are testimony to the work he’s done at AWG. Terry and his wife also run a small tanning salon they have owned since October.

Last August, Terry says, AWG management and Teamsters Union Local 955 ended monthly meetings they had been having for nearly three years. The contract between AWG and the union that represents some 494 warehouse and trucking employees ended April 1 without an agreement on a new contract. Terry says AWG management had wanted a contract by Jan. 1 or they would seek to outsource their operations.

After a few months of negotiations, AWG gave notice Feb. 1 that union workers would be laid off when the contract expired. Employees could apply to third-party companies AWG wanted to hire to run their warehouse and trucking operations — CS Integrated (CSI) and Perryman Trucking. Warehouse workers could apply for jobs with CSI; trucking personnel could apply to Perryman, where they would have to become owner/operators under a lease/ownership agreement with AWG. Both companies now operate out of the AWG warehouse. CSI is a New Jersey company, and Perryman is owned by Drake Trucking, a Texas company.

“The company never told the union what it wanted specifically, only that they could save money with the third-party contractors,” Terry says. “The two sides went back and forth for a couple of months, and the union bent over backward to meet the company’s demand for increased efficiency and were making great strides in doing just that. But in the end, only AWG management knew what it wanted, and they weren’t going to budge.”

AWG, Terry says, was undoing his success from the past three years. “When I arrived in 1997, the warehouse was in a state of chaos. I was not interested in watching them destroy what I had worked so hard to make right,” he says.

“I’m a lucky one. I have some time to get my head together, maybe look into expanding our business and sticking with that. Everything’s different now. I worked weekends, holidays, and days off. I was in there sometimes 60 or 70 hours a week. I was almost never home. I never really knew when I was coming home when I went to work.”

Terry came to Kansas City from Oklahoma City to manage AWG’s warehouse. He began with AWG in 1981, working in the company’s Springfield, Mo., warehouse, where he filled orders, stocked inventory, and loaded trucks. He was a Teamster until 1990, when he joined company management as a dock supervisor. He then became the lead warehouse supervisor in the company’s Oklahoma City facility. Eventually, he worked his way up the chain to become the top manager in the Kansas City warehouse operation. In January, when it was clear that the AWG/union talks were going to be rough, he was demoted to warehouse supervisor from warehouse manager. Terry suspects the demotion came because of his excellent relations with warehouse workers. Still, he decided to give the new position his best shot “for my family and my career.”

Working as a Teamster, Terry had helped negotiate the union’s 1990 contract with the company. The experience planted doubts in his mind regarding the sincerity of the Teamsters’ efforts during that round of negotiations. “It was a different time,” he says. “But the union leaders did not take it seriously…. The union guys would laugh at AWG’s offers. I decided I was in the wrong end of the business for a guy as serious as I was.”

While an AWG warehouse manager in Kansas City, Terry worked through contract negotiations with the union in 1997. “At that time, the company and the union sat down with a federal mediator,” he says. “It was then that the company and the union knew there were things that had to be changed regarding work rules. The mediator suggested monthly meetings between the two sides. We began to try to work these things through. The first was a big three-day conference in Clinton, Mo.” At the conference, both sides realized they had similar goals. Times had changed, and both the union and the company were hemmed in by work rules. The company and the union had to overcome decisions they had made through arbitration.

The Teamsters, says Terry, were able to keep workers in the warehouse when working conditions normally would have forced them out. Warehouse operations were inefficient, says Terry. Job attendance and employee accountability and discipline were problems. But, he says, those difficulties had less to do with the Teamsters than with AWG management. “I came in and began to enforce the efficiency standards,” he says. “At the time, workers had to meet their work goals 95 percent of the time.”

Terry says he had to fire more than 200 inefficient and problem employees from the warehouse over the next three years. He says it was a difficult task. When he was a Teamster at AWG in Springfield, he himself was fired for fulfilling only 93.7 percent of his work requirement. “The Teamsters could see I was a young guy who was cocky,” he says. “But they could also see that I had potential. The union went to bat for me, but I had to meet those work requirements or I’d be out. Thank God they did (the union defended him) or I never would have gotten where I did.”

Even under Terry’s stricter management, union employees worked with him to increase efficiency and reduce turnover, he says. In 1997, AWG took 3,500 applications for jobs, according to Terry; of those, only about 500 applicants made it past background checks and drug tests. “Then if we were able to keep just 5 percent of them, we were lucky. The turnover is tremendous. The bottom of the seniority ladder was where the turnover was. But the job is so tough and demanding, that seniority is the only way to get relief from that work schedule. Teamsters live and die by seniority,” he says.

Both sides used the monthly meetings to move toward resolving issues for a contract in 2000. However, the discussions, Terry says, sometimes were “bitch sessions.” Even so, Terry says, “AWG and the Teamsters had been able to work through work-rule problems. They were to the point where the Teamsters were breaking their own contract. Over time, the company said they needed to get more people in the door. They wanted more casuals (employees who work for a time before receiving permanent union positions) and temporary workers. The union went for that. The only thing they asked was to let employees have their days off instead of being forced in to work.”

But last August, Terry says, the company ratcheted up demands, including changes in work rules that “flew in the face of the contract.” The two sides then ended the monthly meetings, breaking off talks in favor of contract negotiations.

After that, Terry says, “It was rocky right out of the gate. AWG said it wanted workload evened out between senior and junior employees. AWG also stepped up efficiency standards to 100 percent of work requirements. They wanted further increases in overtime and production. Still, the union went for it. AWG will say they were working with the union for three years and never got anywhere. But that just isn’t true.”

The faster pace and new job demands increased the attrition rate of longtime employees. Turnover rose as even casual workers stopped coming to work, sometimes within a few days of being hired. Even temporary workers declined to work under the new company requirements, Terry says.

About six months before the end of the contract, AWG decided it wanted to contract out the trucking operations, Terry says. “It would have saved them about $8 million a year and could have been a good move for them. But they knew the union would not leave those truckers — some who have worked for the company for 25 and 30 years — out to dry. AWG figured it might lose all the union workers.”

The company gave union employees 60 days’ notice that they would lose their jobs. On Feb. 1, Bobby Davidson, leader of Teamsters Local Union 955, and Jim Kabell, leader of Teamsters Local Union 245 (which represents AWG’s Springfield warehouse and truck employees), met company officials at a Springfield restaurant. “I expected it would be a discussion of contract negotiations,” says Davidson. “Instead, they slid the warning notice across the table and told us we won’t have jobs after April 1. They said we were done, that it was over.

“But Jim and I told the company people we could get where they wanted to go. We (the union) have an interest in making sure the company can compete, that they make money. The more money they make, the better off we would be. At the very least, Jim and I had 1,200 workers we had to keep employed.”

Davidson remembers the meeting as he sits behind a worn desk at the Teamsters union hall at 4701 Van Brunt. Around him, union workers answer telephones and coordinate workers handing out informational fliers at AWG member stores. They are all brawny, work-worn men from 30 to 55. They are plainly dressed. Their hands are, without exception, big, rough, and strong. Some of the men were close to retirement when the April 1 contract deadline hit.

Mike Morris was just seven weeks from being able to collect his pension. “That’s something to think about,” he says. “I devoted nearly 30 years to the company, and now I’m wondering whether that will pay off for me.”

The hall’s noise and activity drives Davidson into an empty room. On the wood-panel walls are union bumper stickers and posters with medical and health information. He sits at a folding table, leaning wearily on the table’s edge. He has had little sleep since April 1, and he has deep, dark rings under his bloodshot eyes. “Our people get paid well; they get good benefits,” he says. “But they work hard to get that. They have worked holidays and days off. They have worked night shifts when they already worked the day. Many of our members suffer family problems because of their hours and the dedication they have to the company.

“During negotiations, the company said it had no problem with wages, benefits, pensions, and holidays. They wanted work rules changed. We had problems there and wanted them changed ourselves. Most of what they wanted, or what we thought they wanted, could be meted out with common sense. We made changes, significant changes. We made proposals, but each time they said they needed $43 million in savings over five years. We did everything we could. We wanted to work with them.”

Davidson says the company never made a counteroffer, nor did it state what it wanted from the union. “We couldn’t figure out where they were coming from. We wanted a moderate raise over three years, way below inflation (from 1.4 percent to 1.7 percent a year for six years). We wanted to work it out with them, give them what they wanted. But they never showed us the numbers, where the inefficiencies were. They never wanted to negotiate a contract.”

Kansas City attorney Joe Moreland represents the Springfield and Kansas City Teamsters locals, which have filed a complaint with the National Labor Relations Board. He says the company gave the union notice Feb. 1 because it had to. Under federal law, any company with more than 500 employees must notify workers 60 days in advance of firing them. “If it hadn’t, AWG would have owed those workers a lot of money,” he says. “AWG said what they wanted. If the union couldn’t get there, the union employees were fired.

“Then the company never made a proposal the union could take back to workers to vote on so they could keep those jobs. The company came to the table and said it could save $43 million in the next three years by subcontracting truck, maintenance, and warehouse operations to other companies. AWG said they had bids and that they intended to follow them through unless the union could convince them otherwise. The Teamsters asked for proposals, then made their own to make all operations more efficient and cut costs. AWG continually said it was not good enough. AWG basically said they would work with a union proposal when they saw a good one.”

“It was like shooting at a moving target in a dark room. You don’t know what you have to shoot for,” Moreland says.

Terry kicks back in the booth at the restaurant. “I worked for CSI for three days, and warehouse operations were disorganized,” he says. “CSI employees had no experience in warehouse operations and had to be trained by supervisors. This lack of know-how created situations that demanded that managers move stock around the warehouse, fill store orders, and load trucks.”

The situation caused severe delays, he says, and dangerous working conditions for new employees. “In one instance, I saw a forklift driver push a pallet of picante sauce and a pallet of pickles off a top rack,” Terry says. “That fell 30 feet, and if anyone had been standing there, they would have been killed. It is a situation we would normally write up a safety report on. But in the chaos, we cleaned up quickly and continued on.

“This whole thing is not about work efficiency. If it were, AWG would have stuck with the union. They went out of their way to make that place work. But it’s about the union. From 80 to 85 percent of those people working in the warehouse are from out of town. AWG has flown them in from all over the country. They are putting them up and, in some instances, feeding them. The cost of bringing in the security for the place, including cops they recruited from elsewhere, has been incredible.”

TWI Personnel, a North Carolina company, has provided workers for CSI who are housed at three local hotels. Falcon Global Security of Montoursville, Pa., is providing security for AWG. According to its Web site, Falcon Global offers “labor crisis management” for company management, which “may not want to involve them in a labor dispute as they have to live in the community and possibly be neighbors of some of the strikers.” CSI spokesperson Hal Leddy did not return repeated calls from PitchWeekly. AWG Executive Vice President of Marketing Jerry Garland referred calls to Sarah Hall of the Fleishman-Hillard public relations firm, who did not return calls for this story.

Contact Patrick Dobson at 816-218-6777 or patrick.dobson@pitch.com.

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