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Giant, drivers clash over future union membership Outsourcing deliveries is at heart of strike, not salaries, benefits


Rather than a traditional tug of war over wages and medical benefits, the Giant Food truck drivers have gone out on strike over their futures.

It comes down to this: How will that jar of peanut butter or bunch of lettuce get into the food stores? Will it be driven in by a Giant employee who is a member of the union, or will it come through a wholesale food distributor who might be able to get it there more efficiently and cheaply?

As the strike entered the fourth day yesterday and negotiations seemed stalled, small groups of Teamsters began picketing in front of about 20 of the 174 stores. With 320 truck drivers and 174 Giant stores, the union has decided to concentrate on high-volume stores.

"We are asking customers not to cross the picket lines and to go to other grocery stores," said John Steger, vice president of Teamsters Local 639, which represents the truckers.

"This is about looking out for our future. The union wants to grow with the company," said Steve McNutt, a truck driver from Pasedena who was picketing in front of the store on York Road yesterday.

Giant Food Inc. has guaranteed the truck drivers their jobs, but the company wants the flexibility to use distributors as well, particularly as the company expands into southern New Jersey, Delaware and Pennsylvania.

But the Teamsters say they will lose if they agree to let the company "outsource" its distribution by having food delivered directly to individual stores rather than through the Landover warehouse.

"This is life and death," said Steger. For instance, he said, if the company chose to have a distributor in the Pennsylvania area haul all fresh produce to the nine new stores there, the union would lose.

"That is nine loads a day. That is nine fewer drivers that they need. As the chain grows up there, that is fewer and fewer jobs," Steger said. "What the company wants to do is limit the future."

Quite the reverse, the company argues. It says that in order to remain profitable in the future, it needs to compete with lower-cost competitors.

Today, about 90 percent of the items on Giant's shelves come through a warehouse in Landover and are hauled by union truck drivers to the stores.

But it would not make sense, said Giant spokesman Barry Scher, if a wholesaler's truck carrying produce or canned goods passed within a mile of a Giant store in New Jersey on its way to the Landover warehouse and couldn't drop off groceries there.

Agreeing not to use wholesale distribution "would lock the door on potential efficiencies. It is a very important point to this company," he said.

Analysts say food stores throughout the industry are looking toward the use of wholesale distributors.

"As grocery store chains expand into new areas, they don't want to invest in building a warehouse so they go to outside wholesalers," said Kurt Funderberg at Ferris, Baker Watts Inc. in Baltimore.

Keeping costs down is a particularly important issue for Giant, because it is considered a high-cost operator, said Ed Comeau, an analyst with Donaldson, Lufkin & Jenrette in New York.

"There are a lot of changes going on in the retail food industry. Giant wants to remain flexible to make those decisions," Comeau said.

Some analysts forecast a long strike, saying that they believe Giant is prepared to hold out on the issue. But others said that if the United Food and Commercial Workers, Locals 400 and 27, decide to honor the Teamsters picket lines it would be difficult for the company to maintain operations.

"They have a brave face. They have to," said Kenneth Gassman at Davenport & Co. in Richmond. But if the other workers go out during the holiday season, he said, "I think you will see a difference in customer service levels and then the company has to decide whether it is worth the possible loss of customers."

Yesterday Giant closed the warehouse and distribution centers, laying off 2,100 other Teamsters who produce Giant-brand baked goods and dairy products.

Pub Date: 12/19/96

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