Safeway links jobs to union givebacks Layoff of 700 workers threatened if a new warehouse isn't built


Safeway Stores Inc., the national grocery chain, wants to close its outdated 50-acre distribution warehouse in Landover and build an $85 million state-of-the-art facility on land owned by Prince George's County near Bowie.

But Safeway officials said yesterday that they will build the new distribution plant only if they can get two Teamsters unions that represent workers at the plant to agree to labor contract concessions.

Otherwise, the 700 jobs at the plant could be in jeopardy.

"Unless we can get the union contracts restructured, we plan to get out of the distribution business in this area altogether," said Brian Dowling, Safeway director for public affairs.

The company, he said, plans to hire C&S; Wholesale Grocers, based in Brattleboro, Vt., to handle warehousing and distributing food and supplies to its 124 stores in the Baltimore-Washington area if Safeway is unable to get the concessions.

"The cost savings would be significant if we outsourced to C&S;," Mr. Dowling said, though he declined to cite a specific dollar amount.

"Our preference, though, would be to stay in the distribution business in this area. It gives us greater control on that operation, and we really don't want to eliminate 700 jobs."

Mr. Dowling said he could not comment on what concessions the company is seeking from Teamsters Local 639 and Local 730, which represent truck drivers and warehouse workers at the Landover distribution center.

The company said it would meet with representatives from the two union locals today to outline how Safeway would like contracts restructured.

(The company also is meeting with the union that represents retail store employees in the region, though those contract negotiations have no direct bearing on the company's decision to build a new distribution plant.)

Phil Feaster, president of Local 639, which represents about 175 Safeway truck drivers who work out of the Landover plant and earn $18 to $19 an hour, said his membership was "open to listening" to Safeway's ideas for restructuring the contract. He declined to speculate on what types of concessions the company might seek.

"Of course we want to do everything we can to protect our members' jobs," Mr. Feaster said.

County, state discussions

"We just hope they realize they have a good union working for them and that our members patronize their stores. I don't think the Teamsters would take it lightly if they decided to outsource the distribution."

Mr. Feaster said the union would make the argument in its meetings with Safeway that building the new distribution plant would be more beneficial to Safeway's store operations than hiring an outside firm in New England to take over distribution.

"Can you imagine what would have happened to Safeway's business in the Blizzard of '96 had they had to rely on trucks getting through the storm from New England?" he asked.

Dennis Murphy, president of the Prince George's County Economic Development Corp., a private nonprofit group that helps the county retain and attract business, said he and county and state officials have been in discussions with Safeway for about seven months about the company's need for a new distribution facility.

The Landover plant, opened in 1952, is considered outdated because its truck terminal is too small for today's large tractor-trailers and its warehouse is small by today's industry standards, Mr. Dowling said.

The company, Mr. Murphy said, would like to build the new facility on a 100-acre property in Collington Center, an industrial park on U.S. 301 just south of Bowie. Nordstrom's has its mid-Atlantic warehouse-distribution facility in the park.

The company and county, he said, have discussed possible lease-purchase and straight-purchase agreements for acquiring the land from the county. He declined to release specifics of those possible deals.

Safeway, Mr. Murphy said, won't make a decision on the issue until it determines whether it will build the new plant.

"We will doing everything we can do to retain Safeway," Mr. Murphy said. "That's of the highest priority. These are well-paying, long-term jobs we absolutely don't want to lose.

Governmental support

"Safeway is a major employer with national name recognition. Losing them would have a very adverse impact on this county and state not only economically but psychologically."

Mr. Murphy said Prince George's County and the state have given Safeway assurances that they would work out county and state "support" for the new distribution project, such as paying for road and utility improvements.

The county also would speed up the building review process so the project could be started and completed within the time frame Safeway needs.

Mr. Dowling said that if Safeway decided to proceed with the project, that the company would like to see it completed within 18 to 24 months. Safeway, he said, plans to make a decision by May on whether to move forward with it or hire C&S.;

Pub Date: 3/21/96

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