MORE CLOSURES AT FARMER JACK AS WORKERS REJECT CONTRACT

Jon Springer

MADISON HEIGHTS, Mich. -- After Farmer Jack union workers voted against revisions in their contract that might have made the chain more palatable to a buyer, A&P responded by saying it would close additional stores.

According to Victoria Collins, president of United Food and Commercial Workers Local 876 here, A&P informed the union in a letter that it would close four stores as a cost-cutting measure. According to a report last week, union sources said up to 30 additional stores may close.

Officials at A&P were not available for comment.

A&P, which announced intentions to sell the Farmer Jack chain in May, has already closed dozens of Michigan and Ohio Farmer Jack and Food Basics locations this year in an attempt to make the chain marketable to a single buyer.

Negotiating with A&P and an unnamed potential buyer, union leaders came to a tentative agreement on a revised contract, only to see its members vote down the deal last week. In a statement, Collins called the results of the vote "unfortunate," and "a cause for great concern." She added the turnout was "very low."

No further talks between the union and A&P are scheduled, Local 876 said. The union quoted the letter from A&P as saying: "The company's needs remain the same as before the vote and therefore, there is nothing new for the parties to discuss."

According to the union, the proposed contract would have provided a buyer of the chain with 5% overall savings in operating expenses. Wages would have been cut by around 10% -- overtime rate changes could have reduced some workers' pay by 25%, according to a report in the Detroit Free Press -- but benefits such as health insurance and pensions would have been preserved. The contract would only take effect if a deal to sell the chain was consummated.

That the identities of potential bidders were kept confidential may have been a factor in the results of the contract vote, suggested David Livingston, a consultant based in Pewaukee, Wis.

"If I'm going to vote for a pay cut, I'd want to know who would be buying the company," Livingston told SN. "Is it a group of local investors with no supermarket experience, a real estate investment trust trying to make money on the real estate, or is it a Kroger or a Giant Eagle?"

A spokeswoman for Local 876 declined to comment on the identity of potential bidders, and declined to say what workers knew when they went to vote, saying only that "there's rumors circulating out there." A message on the Local 876 Web site acknowledged confusion among union members -- apparently, some had mistakenly believed the union would count those who didn't vote as being in favor of the revisions.

A&P has said it hoped to sell Farmer Jack by the end of its fiscal year in February.