AWG CEO EXITS; CFO IS PRESIDENT FOR INTERIM

ELLIOT ZWIEBACH

KANSAS CITY, Kan. -- Associated Wholesale Grocers here said Gary Phillips, the distributor's chief financial officer, has been named interim president following the abrupt departure of Doug Carolan -- an event that closely followed the resolution of the company's months-long dispute with the Teamsters union.

It was unclear last week whether Carolan had resigned or been terminated as president and chief executive officer after two and a half years in that position.

Phillips, a 26-year AWG employee, was appointed as Carolan's interim successor by the cooperative's board. In announcing that appointment, AWG's statement did not mention Carolan's name at all.

The company did not indicate any timetable to name a permanent successor to Carolan, or whether Phillips' appointment would be made permanent.

Phillips and other company officials declined to talk about the change last week, and Carolan could not be reached for comment. Several board members contacted by SN last week did not return phone calls.

Phillips, who joined AWG in 1974, has been executive vice president and CFO since 1996. He previously was senior vice president and general manager of the company's Springfield, Mo., division for 14 years.

Carolan joined AWG in 1983 as vice president of marketing and held various positions before being named chief operating officer in 1996 and then succeeding Michael De Fabis as president and CEO in March 1998.

The labor dispute involved AWG and two locals of the International Brotherhood of Teamsters, the 1,200 members of which were ousted by AWG in April in favor of third-party distributors. They were ultimately hired back on a permanent basis in June by one of the third parties.

Speaking with SN last week, Teamster officials made no attempt to disguise their pleasure at Carolan's departure.

"I'm not sure why he's gone, but I'm glad he's gone," said Jim Williams, president of Teamsters Local 955 here. "He put a lot of people through hell for no cause, and he hurt our members, the stores and the company."

Jim Kabell, president of Local 245 in Springfield, Mo., echoed those remarks. "There were no tears shed by anyone in the Teamsters organization because of our belief that he caused our members a lot of grief -- and not just our members, but also the 350 owners of 850 stores [supplied by AWG] as well -- in terms of money and stress, and all of it was uncalled for," he said.

"The deal we got at the end could have been made at the beginning if Carolan had allowed it. But he wouldn't let us negotiate contracts for warehousemen and drivers with a single party -- he insisted we deal with separate contractors -- and that was a sticking point with the union."

An editorial in the Springfield, Mo., News-Leader also condemned Carolan a few days after his departure. "Few, if any, tears were shed over [Carolan's] departure -- by Teamsters or by store owners ...

"If any business professors are looking for a textbook example of how not to handle labor negotiations, this is it ...

"Carolan underestimated the Teamsters, overestimated his company's ability to run the warehouse with temporary workers, bungled public relations and misread the National Labor Relations Board," the editorial said.

The dispute between AWG and the Teamsters involved employees at AWG facilities here and in Springfield, whose three-year contracts expired April 1.

Just prior to a session Feb. 1, Kabell told SN, AWG's negotiators handed the union a notice warning it the company planned to outsource its distribution and that AWG would lay off its work force when the contracts expired.

Williams told SN the union did not see the shift to outsourcing coming, "although every time we tried to accommodate AWG in negotiations, they would tell us it wasn't enough, and we were beginning to feel they were moving in that direction."

Teamsters began picketing retail stores supplied by AWG, and when the outsourcing contracts took effect on April 2 -- eliminating their jobs -- the union filed an appeal with the NLRB.

In late May, the NLRB urged AWG to reopen negotiations after ruling the employer had bargained in bad faith.

Two weeks later AWG said it would allow one of the third parties -- Elite Logistics, a division of Toronto-based Tibbett & Britten Group North America -- to be the sole manager of its warehouse and transportation operations, which cleared the way for the union to reach an accord with Elite.

The union continues to work under the expired contract, Williams and Kabell told SN last week, while the two sides iron out several issues.