Labor Worries Continue For American Crystal

American Crystal's locked-out workers claim that CEO Dave Berg likened them to a "cancerous tumor," while the company claims that Berg's words were taken out of context.

In an ongoing labor dispute, the union representing Moorhead-based American Crystal Sugar Company's 1,300 locked-out workers on Wednesday released audio tapes of a November 7 shareholders meeting, along with a statement saying that the speaker-identified as American Crystal President and CEO Dave Berg-“likened the workers to a 21-pound cancerous tumor.”

The union said that in an audio recording of the meeting, Berg told the story of a sick friend who was diagnosed with cancer and had a massive tumor removed. “That's a scary deal,” the union's announcement quoted Berg as saying. “We can't let a labor contract make us sick forever and ever and ever. We have to treat the disease and that's what we're doing here.”

The union called Berg's remarks “another serious blow” to an “already strained relationship” between the company's management and the workers, who have been locked out since August 1.

The workers-who were employed at the co-op's sugar beet processing plants in North Dakota, Minnesota, and Iowa-were locked out after their union and American Crystal failed to agree on the terms of a new five-year labor contract meant to replace a seven-year agreement between the two parties that expired on August 1. American Crystal made an initial contract offer before the last contract expired, and the union rejected it in late July. The company made a second offer in November, but it was also rejected.

A company spokesman told the Forum of Fargo-Moorhead that Berg “regrets using an analogy that compares our union contract to cancer,” but that the union's statement takes his words out of context.

In one of the audio clips attached to the union's release, Berg says, “I'm not saying a labor contract is cancer, but it affects you. It will drag you backward. You cannot do what you have to do.”

He adds: “And I'm not saying we're trying to get rid of the labor contract. We're not about union busting. Take that one home with you. We are not about union busting. But we can't let the labor contract make us sick … We have to treat the disease, and that's what we're doing here.”

Meanwhile, American Crystal reported record earnings in its 2011 fiscal year, according to an Associated Press (AP) report. The company's revenues reportedly totaled $1.5 billion, up from $1.2 billion the previous year. High sugar prices, a strong crop, and good storage weather added up to record earnings, Brian Ingulsrud, the company's vice president of administration, told the AP.

The success triggered incentive-driven increases in compensation for Ingulsrud and other top executives, according to the AP. Berg's compensation reportedly climbed 23 percent, from about $2 million to $2.4 million, while Ingulsrud's compensation reportedly rose from about $700,000 last year to $809,000 in 2011.

Ingulsrud told the AP that the value of incentive-driven increases rises and falls with the fortunes of the company.

John Riskey, a union member, meanwhile, told the AP that the company should share the prosperity with its workers.

However, money didn't seem to be the issue for union workers. The company has reportedly offered 17 percent pay increases to union workers over the next five years. But the workers don't like proposed changes to health insurance coverage that would more than double their maximum out-of-pocket costs for family coverage.

Ingulsrud told the AP that the company is trying to strike a deal that will hold up in less-profitable years as well as in record ones. Riskey said that the union has offered shorter-term deals to prevent the company from committing to an untenable position.