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American Crystal Sugar Co. continues to advertise for local replacement workers, including in the Herald, in the sixth month of the lockout of its union employees.

Meanwhile, union leaders claim the company’s Friday filing with the Securities and Exchange Commission shows that the replacement workers aren’t doing a very good job and are hurting profits.

On Sunday, a union leader also said at a meeting last week, the union put more proposed concessions into the hopper, hoping it will lead to a third round of negotiations.

Crystal initially brought in workers from across the nation in August, hired by Strom Engineering in Minnetonka, Minn., to replace about 1,300 union members locked out after the union rejected the company’s proposed new five-year contract July 31.

Company officials have admitted replacing the workers has been expensive, partly because the company has to pay for room and board for the out-of-state workers, as well as transportation costs.

Staying at area motels, the replacement workers typically would be taken in a van to the processing plants in East Grand Forks, Crookston, Moorhead, Drayton, N.D. and Hillsboro, N.D.

The company also hired security guards during the lockout, also putting them up at local motels.

But just before Thanksgiving, the company began advertising the replacement jobs to local residents, conducting interviews at the Alerus Center.

Sunday, the ads continued to run.

It just makes economic sense to replace the out-of-state replacement workers with locals over several months, because the lockout has lasted longer than expected, Brian Ingulsrud, vice president for administration said at the time.

In an ad on Sunday, American Crystal touted “multiple positions,” for “… non-union, full-time, limited duration jobs in our five Red River Valley factories.”

The listed jobs range from “general workers,” at $12.50 to $14.75 per hour, to certified welders at $24 an hour and “electronic control techs” at $24.50 per hour.

The jobs include “day-one benefits, including medical, personal time” and flexible spending accounts for medical care, according to the ad.

Federal law prohibits a company from permanently replacing locked-out workers.

While stressing the company wants its union workers back, last week Ingulsrud said the hiring process is going well.

“We are making excellent progress in hiring employees,” he said in an email to the Herald. “We are very pleased by both the volume and quality of the applicants we are receiving for these open jobs. I think it speaks to the fact that (the company) is offering an excellent pay and benefits package that is attractive to many people.”

But he declined to give figures on how many locals have replaced out-of-state replacement workers.

Crystal locked out its union employees, company officials have said, because it feared a strike during the time-sensitive harvest and nine-month processing campaign would be too costly. Union officials have said they offered a no-strike guarantee in return for working during the labor impasse, as they have done several times in past decades.

Representation

John Riskey, president of the Bakery Workers local 167, representing locked-out employees at the East Grand Forks, Moorhead and Drayton, N.D., factories, said last week American Crystal is losing lots of money during the lockout because of the replacement workers.

According to a filing made Friday by American Crystal with the Securities Exchange Commission, in the first quarter of its fiscal year — the three months ended Nov. 30 — the company reported consolidated net proceeds, or profits, fell 39 percent compared with the same period in 2010.

The reason given in the report, which is available online, was “primarily due to 29.8 percent fewer tons processed during the three months . . . .”

“The news is actually surprising,” Riskey said in an email to the Herald. “We never expected the replacements to match our productivity, but processing 30 percent fewer tons over the quarter must be a serious disappointment to the farmers and executives. How long is (President and CEO) Dave Berg going to continue with this unnecessary lockout? Is he trying to do the company permanent damage?”

Attempts to reach company officials Sunday to respond to Riskey were not successful.

Of course, whether or not the replacement workers mainly are to blame for the difference in processing progress isn’t necessarily clear.

Record yield

The 2010 harvest included a record yield of sugar beets per acre, so big that company officials began the pre-pile harvest earlier than ever before to get more done before the full stockpile harvest began about Oct. 1, as usual. That meant that 17 percent or so of the beets a year ago were processed by Oct. 1, rather than the typical 10 percent. This year’s harvest showed yields down 19 percent from 2010, as well as total beet production much lower, meaning the processing campaign won’t take as long.

The early part of the processing also can be affected by weather. This past fall, the warm fall meant the harvest had to shut down for several days because it was too warm to stockpile more beets without leading to rotting later in the processing campaign. That could have affected the processing schedule if the delays were long enough.

Riskey points out that American Crystal “cost-of-sales” category showed an increase of nearly 180 percent in the first quarter compared with the year-ago figure, while gross proceeds were down 48 percent.

“This report shows that Crystal Sugar executives are hurting both their workers and growers by continuing this lock out,” Riskey said. “I hope the company agrees to return to the table soon before more damage is done.”

Federal mediator

On Sunday, Riskey revealed that union representatives met Wednesday with Joe Talley, chief negotiator for American Crystal Sugar, and an attorney for Crystal, and with the federal mediator, to talk about possible future negotiations.

“We did offer some proposals, and part of the offer was looking at health insurance,” Riskey said about the meeting that was not officially a negotiating session. He declined to give details about the union’s offers, but said they were far-reaching.

“I think our committee went farther than what our members really wanted to,” he said Sunday. “But in order to get this moving, if the company is serious about negotiating, this should help substantially in the process.”

He said after the meeting, the union asked the federal mediator to call another negotiating session.

Ingulsrud told the Herald late Friday that to that point, the company had not gotten any request from the mediator to sit down again at the bargaining table.

Many locked-out employees have retired, if they have enough years in, while others have taken new jobs, said Sandy Driscoll, who is locked out from the East Grand Forks plant.

For 34 years, she has worked during the processing campaign, rather than year-round, because she wanted time off in the summers to be with her family. But that means she makes less than $14 an hour and has no benefits, she said.

Now, she is collecting unemployment from the state of Minnesota and hoping to get back to work.

It appears that not many locals have taken replacement jobs, she and Riskey agreed.

“When I am picketing, you still see a lot of out-of-state licenses on the vehicles driving in,” to the factory, Driscoll said.

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