One down, two to go.
After nearly a year of negotiations, Save Mart Supermarkets secured a new contract with its labor union Saturday, a deal that will help the struggling Modesto grocery chain lower its costs in a hyper-competitive climate. The contract will include wage and benefit concessions for about 11,000 employees at Save Mart and its Lucky subsidiary.
The agreement puts renewed pressure on Northern California's other unionized supermarkets, Raley's and Safeway Inc., to make their own deals with the United Food and Commercial Workers. Like Save Mart, the other two chains have been pushing since last October for labor concessions but so far haven't come to an agreement with the UFCW.
The union's agreement with Save Mart won't be set in stone until Monday, when the contract is expected to be ratified by the executive board of UFCW Local 5 in San Jose. Local 5 is the last of the three Save Mart bargaining units to go along with the deal.
The local announced Saturday that its members actually voted to reject the contract in balloting that ended late Friday, 52 percent to 48 percent.
But because the no votes came up short of the two-thirds supermajority needed to authorize a strike, Local 5's board plans to invoke union rules and approve the contract anyway. The local's president, Ron Lind, had warned his members a week ago that the board would take such action if members didn't approve the contract.
With Save Mart officials threatening to invoke terms of the contract anyway, Local 5 officials believe they have little choice but to ratify the pact even if it isn't popular with the members. The alternative a strike would be difficult to pull off because of the obvious split within the rank-and-file, and the likelihood that scores of members would cross the picket line.
"It's doomed to failure," said Mike Henneberry, a spokesman and vice president at Local 5.
He said leaders of the UFCW International union in Washington recommended that the board ratify the contract. He added that union leaders took similar action to approve a contract with Safeway in 2001, when workers rejected the pact but wouldn't endorse a strike, either.
The three unionized chains say they need concessions to regain market share from nonunion, low-cost competitors like Wal-Mart.
Save Mart did obtain some key savings. The new contract will require workers, for the first time, to contribute to their families' health premiums. It also eliminates cherished benefits like bonus pay for night work in most cases. However, Save Mart dropped some of its initial demands, such as the elimination of retiree health coverage.
The contract was turned down a month ago, when it was overwhelmingly rejected by Local 5 and San Francisco's Local 648. The Central Valley unit, Local 8 in Roseville, approved it, but union officials said it wouldn't go into effect until all the locals OK'd it.
The San Francisco local approved the contract on a revote earlier this week, leaving Local 5 with the last word.
Local 5 officials, urging their members to take a second look at the deal, said Save Mart has been losing money and a strike could result in tremendous job losses.
Still, taking concessions was a difficult pill for UFCW members.
Working in a union grocery store has been one of the last bastions of middle-class, blue-collar work, but that status is being eroded with the rise of nonunion competition.
Henneberry called the contract "distasteful" but added, "It may give this chain a chance to survive."
He suggested that members could recoup some of their losses when times are better.
"It will give us a chance to fight another day," he said.
A Save Mart spokeswoman said the company would withhold comment until Monday.