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26 September 2003
Maple Leaf gobbles Schneiders
No one's saying — yet — how merger
will affect workers
Schneider Office Employees' Association | TNG Canada
Local 30009
The "repatriation" of
Schneider Corp. by Maple Leaf Foods Inc. was hailed Thursday
as a huge win for the Canadian food industry. But none
of the exhilarated executives wanted to talk turkey about
whether it might prove to be a loss for Canadian workers.
Maple Leaf, Canada's largest meat processing company with 18,000 employees, announced
the $413-million deal to buy Schneiders from U.S. pork giant Smithfield Foods Inc.
(Smithfield acquired Schneiders five years ago after a lengthy and bitter takeover
battle triggered by Maple Leaf's hostile $130-million bid for the 107-year-old Canadian
company.)
Schneiders, with 20 facilities and 5,000 employees
— among them the 160 members of the Schneider Office Employees' Association
at headquarters in Kitchener, Ontario — is Canada's second-largest
meat processor.
"Welcome back to Canada, Schneiders," said Michael McCain, CEO of Maple
Leaf, at a press conference in Toronto. He described the deal as "somewhat a
repatriation of a great Canadian organization."
"The Canadian food industry is overwhelmingly dominated by U.S. multinationals,"
McCain told reporters. "There are very few Canadian companies buying back important
heritage assets like the Schneiders organization from U.S. or multinational ownership."
Arnold Amber, Director of TNG Canada, while noting that the deal still requires the
blessing of the Canadian Competition Bureau, sees a big upside if it does go through.
"It would remove an extremely anti-union American company from our midst,"
he says.
Art Lacroix, president of the TNG Canada Local in Kitchener, which
represents administrative, finance, information technology and clerical
workers, experienced Smithfield's butchery when their contract came
up for renewal several years ago. In the end, the company managed to exterminate
retiree health benefits and made "significant cuts"
to workers' rights and health benefits. The company "absolutely refused
to negotiate wage increases." Instead, it dictated salary nudges that
were less than the Consumers Price Index.
The existing contract expires in October 2004. Maple Leaf expects to add Schneiders
to its many IOCs (Independent Operating Company) early in the new year, and it will
likely bring a new tenor to negotations in the fall. But the union isn't expecting
a cakewalk.
While not as extreme as Smithfield, says Amber, Maple Leaf is also
a "difficult
employer that works hard against unions in its shops."
TNG Canada, he adds, will be girding for the predictable. "Whenever there's
a buyout, one has to be on guard against (the parent company's) 'rationalization'
— we call it 'downsizing' — of the workforce" and plant closures, says Amber.
"On the optimistic side, the sale quite obviously has something to do with longevity
of the workforce. It stabilizes Schneiders," he observes. "It could also
lead to TNG Canada doing more organizing at Schneiders."
Lacroix confirms that Schneiders "is doing amazingly well right now. The Kitchener
operation is a large part of that." He says he believes "Maple Leaf admires
what we're doing and how we're doing it."
Schneiders CEO Douglas Dodds, who in a news
release described the merger as "an excellent strategic fit,"
summoned the Kitchener Local's officers and representatives of the plant's union
to an 8 a.m. meeting Thursday at which he announced the deal.
Dodds "explained how our main competitor and the Evil Empire of the 1998 acquisition
fight had come to be our future," says Lacroix. "For Smithfield's part,
it was purely an investment decision, and for Maple Leaf and ourselves, it was a
growth opportunity.
"The spin is that this deal will see us as 'equal partners' in a 'highly complementary
partnership' to create a 'world-class international consumer foods company'. "
Although "management is saying all the right things" at the moment, the
union does expect that, long term, there will be a "rationalization." Lacroix
says the Local "needs to be proactive" on that issue.
So far, says Lacroix, "they're brushing off questions about layoffs and
plant closures with cheery talk of 'growth opportunities' in our new $3-billion
company.
"In the end we're left with vague comments that we shouldn't see any changes
for 12 to18 months. We'll just have to wait and see what tomorrow brings."
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