Safeway plans to take over operations of its Prince George's County distribution center, hiring more than 700 people in a deal that avoids the closure of a major jobs base.
The agreement was announced Thursday by the Teamsters union. The plan reverses layoffs anticipated since October, when the firm running the center for Safeway said it planned to relocate operations, affecting about 700 full- and part-time workers.
Under the terms of the deal, Safeway will end its contract with C&S Wholesale Grocers and employees at the warehouse will work directly for Safeway.
Stacey Brown, vice president of labor relations and employment law, said the company is pleased with the outcome. Safeway is part of Albertsons Cos., which is expected to file to go public.
Ritchie Brooks, president of Teamsters Local 730, said pressure on Safeway from politicians, including state Sen. C. Anthony Muse, and assistance from state and county was critical to reaching the agreement.
Safeway initially estimated that it would cost $10 million to $15 million to renovate the facility and run it directly, said Aisha Braveboy, an attorney and former state delegate who was involved in the negotiations.
Union workers made about $7 million in concessions, including agreeing to pay 20 percent of the health insurance costs, take a $2-an-hour wage cut, and give up several holidays, Braveboy said.
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Local and state officials also pledged nearly $1.5 million in financial incentives — about $1.35 million in forgivable loans and a $97,000 grant — to keep the facility operating through the term of the new collective bargaining agreement, which goes into effect this spring and would expire in 2022.
The votes at two Teamsters locals, which represent about 600 people at the center, were strongly in favor of the deal, which also anticipates Safeway hiring about 25 additional people, Brooks said.
"I'm not making light of the concessions, but the alternative was no jobs," he said.
It is the second time public agencies have intervened in the fate of the Safeway's distribution facility in Prince George's County. The $91 million complex opened in 1998, after winning about $2 million in economic development incentives, as well as labor concessions from unions.
The distribution center, which is owned by Safeway, has been operated by C&S's Collington Services since 2000. Safeway's contract with C&S was due to expire this fall, Braveboy said. C&S did not respond to requests for comment.