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Economic Policy

Maryland warehouse workers save jobs from consolidation threat — at a cost

The Teamsters accepted big wage cuts in order to keep Safeway from letting its distribution facilities move far beyond their reach.

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January 21, 2016 at 4:47 p.m. EST
U.S. Rep. Donna Edwards (D-Md.) expresses her concern as Safeway employees, elected officials, and community and faith leaders rallied last October against the proposed closure of Safeway's two distribution centers located in Upper Marlboro and Landover.(Photo by Marvin Joseph/The Washington Post)

The 700 unionized warehouse workers who were slated to lose their jobs after the closure of two outsourced distribution facilities in Prince Georges County, Md. have won a reprieve -- but only after taking painful cuts to their wages and benefits.

Members overwhelmingly approved two six-year contracts calling for two warehouses to be consolidated under the direct control of Safeway, which had turned management of the facilities over to C&S Wholesale Grocers in 2000. To compensate for higher operating costs that would come with maintaining existing facilities, the workers accepted a $2 per hour pay decrease, gave up six days off per year, took a haircut on their pensions, and agreed to contribute 20 percent to their healthcare costs, which had previously been completely covered. The entry level wage will now be $10 an hour, escalating to $24 an hour with a few years of service, depending on worker classification.

"Both sides took huge concessions," says Aisha Braveboy, a former Maryland state delegate who worked with the Teamsters to negotiate a solution. "It couldn’t have been any better. We were like, we’ve just got to make this work."

Keeping the jobs was her top priority -- and a lot better than the reality the Teamsters confronted back in October of last year.

That's when the two Teamsters locals got the news that C&S had decided to move its Safeway distribution functions to highly mechanized facilities in Pennsylvania, where unions are not as prevalent. Everyone from Teamsters International President James Hoffa to truck drivers and forklift operators protested vehemently, accusing the company of killing jobs in Maryland. Local politicians got involved, with Prince Georges County Executive Rushern L. Baker III -- who has made aggressive use of incentives to woo and retain businesses -- taking a personal interest.

Over the course of a couple of meetings, executives from Safeway's new owner Albertson's agreed to take over management of the old warehouse, leasing C&S' operations systems until it could acquire its own. County and state government kicked in nearly $1.5 million in incentives to bring the deal over the finish line.

And the Teamsters are particularly pleased to be rid of C&S, which has cut hundreds of jobs over the years from warehouses for other grocers, both through technological efficiencies and by relocating operations elsewhere.

"We weren’t going to do it if they stayed," says Ritchie Brooks, president of Teamsters Local 730. "Now we don’t have to deal with C&S anymore, they’re gone." A C&S spokesman did not respond to a request for comment.