Monday, June 04, 2007

CEO Cream Sour Milk for Workers

Explain this to workers laid off who do not get golden parachute and may not even qualify for EI for weeks if not months. Or those who were sold out for a sweetheart contract to improve Loblaws capacity to compete with Wal-Mart.

For those CEOs ousted for poor performance or because their companies are targets of takeovers, golden parachutes are also getting bigger, and not only because they are based on multiples of ever-increasing base pay. Loblaw Cos. Ltd. president John Lederer, who left the struggling grocery chain last fall with almost $22-million, including a $12-million payment under the terms of his employment contract.

Sometime in 2002, senior executives at the hugely profitable Loblaw Co's summoned their UFCW partners , to a high-level meeting where they announced that they had competition. Wal-Mart was coming to town with its Sam's Club warehouse stores and its Wal-Mart Supercenter's. The Supercenters sell groceries and, for this reason, must have been a major part of the selling pitch. In response to the impending invasion the hugely profitable Loblaw Co's had come up with a business strategy to make it more competitive.

It planned to launch a chain of new stores, called Real Canadian Super Stores (RCSS's) which were going to sell groceries and some department store merchandise, sort of like Wal-mart's Supercenter stores in the US. The company intended to get the RCSS's happening really soon. No more conventional Loblaws, Zehr's of Fortino's supermarkets would be opened. From here on in, it would be RCSS all the way. Some RCSS's would be newly built stores while others would be existing supermarkets converted to the RCSS format.

So that these new stores had a good shot at keeping the company hugely profitable, the guys from Loblaw Co's told the union leaders that they wanted to put the Loblaws, Fortino's and Zehr's "banners" on them. This was because the grocery-shopping public recognizes these "brand names" and is more likely to shop at the RCSS's if they think they're pretty much like Loblaws, Fortino's or Zehr's.

Doing so, however, would mean that the RCSS's would be stuck with the current contracts with UFCW Locals 1000a, 1977 and 175 and that's not what the hugely profitable Loblaw Co's wanted. Wal-Mart pays its workers low wages and provides minimal benefits. The RCSS's would be that much more competitive if they could pay low wages and provide minimal benefits too. So the representatives from the hugely profitable Loblaw Co's put a deal to their UFCW partners: We'll fork over the thousands of new RCSS workers to your bargaining units if you agree to lower wages and benefits for them. If you don't, we'll screw you and your current members and what are you going to do about it? According to President Corporon, the hugely profitable Loblaw Co's threatened to close unionized stores, throw unionized members out of work and open new non-union supermarkets.


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