Nonprofit, nonpartisan journalism. Supported by readers.


Will Red River Valley community fabric unravel over Crystal Sugar plant lockout?

The sugar beet farmers who own the co-op company and the 1,300 plant workers go to the same churches, celebrate the community’s births and mourn its deaths. But now they’re on opposite sides.

An aerial photo of the American Crystal Sugar plant in Moorhead, Minn.
An aerial photo of the American Crystal Sugar plant in Moorhead, Minn.

For decades, young people have been graduating from the high schools of the Red River Valley and getting jobs at American Crystal Sugar plants.

These workers have married the sons and daughters of sugar beet farmers, who own the Moorhead-based company that became a co-op in the early 1970s.

The farmer/owners and the plant workers go to the same churches, celebrate the community’s births and mourn its deaths. They’ve stood together for federal laws that have protected the industry from being undercut by foreign imports. They’ve worked together on the farm bills that have made the industry prosperous.

And now it all is in danger of unraveling.

Plant lockout idles 1,300 workers
At midnight Sunday, the contract between plant employees — members of the Bakery, Confectionary, Tobacco Workers and Grain Millers union — and Crystal Sugar management expired. The company followed through on its pledge to lock out the 1,300 workers who turned down — with 96 percent support — the company’s last contract offer. Replacement workers have been hired and moved into the region.

A word about those replacement workers: They were recruited by a suburban Twin Cities company, Strom Engineering, and arrived at the plants last week.

By contract, union workers did not have to teach their replacements how to do their jobs, but they were shadowed by them on the job last week.

“Our workers didn’t have to talk to them,” said Mark Froemke, who for years worked in the plants but now is a field rep for the AFL-CIO. “But it was a difficult situation that we handled with great dignity. These replacements — we call them transient workers because they’re all brought in from the outside — were looking over our shoulders.”

And on Monday, the replacements took over the plants, with the union workers on the outside, looking in.

Over and over, Froemke and other members of the union point out that this is not a strike. It’s a lockout.

The union members wanted to keep working, to extend the old contract. No, said Crystal Sugar executives.

Company ‘shocked’ by contract rejection
The company has insisted its last offer was good.

“Shocked and surprised,” a vice president, Brian Ingulsrud, has told reporters of the company’s reaction to the rejection of the company offer. “We offered what we thought was a terrific contract.”

On the surface, the offer didn’t seem so bad — given the times. There was a 17 percent increase in wages offered over a five-year period.

Froemke admitted that when people in the region, which is not heavily organized, saw the 17 percent increases, there were a lot of raised eyebrows. How could workers spurn the offer?

Crystal Sugar's retail line of products
Crystal Sugar’s retail line of products

“But, like Paul Harvey used to say, ‘Now, let’s hear the rest of the story,’ ” Froemke said.

Included in the 17 percent figure, was a one-time $2,000 bonus. However, changes to the health insurance benefits meant that virtually all of the wage increases would be chewed up by higher health costs. There also is language in the contract that would allow more and more “contract workers” to come into the plants.

And so it was that a stunning 96 percent said, “No.”

In terms of total numbers, this lockout isn’t huge.

But at its base, this is a conflict with major implications.

Crystal Sugar seems to be betting that this will be another loss for labor and the American work force.

“I think Crystal believes that across the country labor has been taking it on the chin,” said Froemke. “Why not strike while the iron is hot? Why not destroy the union and a 70-year relationship?”

Froemke believes, however, that attitudes across the nation are changing. Middle class workers are ready to say enough.

“Maybe we’re finally getting to the point that working people are finally going to say, ‘How far do we have to drop before we’ve lost everything? I do think things are beginning to change. There’s movement.”

He points to the pushback in Wisconsin against the policies of Gov. Scott Walker and similar rallies opposing efforts to undercut worker rights in Ohio.

Perhaps, he acknowledges, that pushback hasn’t reached a tipping point among a majority. But there is movement.

Labor groups lending their support
Certainly, he said, there have been waves of support for the sugar workers from Minnesota’s AFL-CIO and even national labor groups.

Workers got a huge boost on Monday when the Teamsters said their drivers will not cross picket lines that have been established since the lockout.

That won’t stop farmers from hauling the beets to the processing plants. But the finished, packaged product often is hauled away by Teamster drivers.

“A great morale boost,” said Froemke of the Teamster support.

As this unfolds, the main job of the locked-out workers, he said, is “to appeal to the better angels” of the people in the Red River Valley.

Appealing to better angels in the region apparently means holding down the traditional union rhetoric when dealing with the local population. Froemke says it is the job of the union membership to explain the workers’ positions to all who ask. Most in the media, he said, have been receptive to at least giving the union side of the story.

But persuasion also means explaining the issues to the people in church and in local cafes, not to mention to the farmers who own the plant.

Once the farmers understand, Froemke said, he believes they will start to put pressure on management to end this dispute.

Froemke is always careful to speak kindly of the farmers who own Crystal Sugar. He says that it was the farmers, who purchased the company in 1973, who put Crystal Sugar “back on its feet.” The blame for this, he says, falls on the shoulders of the executives who run the company.

Company provides 15% of nation’s sugar
American Crystal Sugar has plants and warehouses in four Minnesota cities — Moorhead (where the company is headquartered), East Grand Forks, Crookston and Chaska, plus Hillsboro and Drayton, N.D., and Mason City Iowa. The company produces 15 percent of the nation’s sugar and 38 percent of the country’s sugar produced from beets.

Those 5-pound bags of sugar at your local grocery, likely came from a Red River Valley plant. Even those bags of sugar that don’t carry an American Crystal label likely came out of one of those plants. More than 30 different labels are used at the American Crystal plant.

It’s not just the grocery stores receiving the Red River Valley product. The 25-, 50- and 100-pound bags are shipped to bakeries. Additionally, there are railroad cars filled with 263,000 pounds of sugar sent to U.S. candy manufacturers.

Processing is hot and stinky work. The beets are poured into hoppers, cleaned and sliced. Next, the sugar is extracted from the sliced beets in liquid form. It’s filtered and then moves through a process that boils it into a molasses-type thickness and then spins it into crystals. It’s dried and, by the end of the three-day process, the sugar is ready for packaging.

Workers laugh about the odor. It isn’t sweet, but it does have staying power.

When some of those who work the late shift want to stop for a beer on the way home, they can walk into the most crowded bar and suddenly find they have space as the crowd gives them room, Froemke said.

That’s the good news.

The bad news?

Because of that odor, he says, “At the end of the night, you’re going to go home alone.”

Plants seen as good places to work
But these plants long have been considered good workplaces. There’s not the “blood and guts” of a packing plant. Wages now typically run to about $20 an hour.

“This is the kind of place you could work, buy a home, help your kids pay for college and retire with dignity,” Froemke said.

He believes all of that is on the line.

By all accounts, these are very good times in the sugar industry. Prices for wholesale sugar are 15 percent higher than a year ago, 35 percent higher than two years ago. Yields, too, are at all-time highs.

It is because of the good times and because it wanted to avoid the lockout, that the company offered “such a lucrative contract,” Ingulsrud said in a Monday television interview. There is constant denial from the company that there is any effort to “bust” the union.

In a Tuesday phone interview, Ingulsrud insisted the “union busting” charge is wrong.

“It’s never been the philosophy here, and it hasn’t been since Day One,” the vice president said. “I don’t know what else to say.”

There is new contract language on manning issues. The language says that no contract employee can be hired to replace a union worker doing his or her job. But it does allow the company to hire contract employees to do jobs that current employees don’t do.

Ingulsrud said, however, that the company has a long history of training its workforce to do new tasks created by new technology. That training would continue, he said.

“The fact is, no employee would ever lose their job,” he said. “They’re saying you could demote us and put us in a worse job; a job that doesn’t pay as much. That’s not true either. We can only subcontract in very specific situations.”

Why have the new language at all?

“Up in this area, we don’t like change,” Ingulsrud said. “But the business has changed dramatically in recent years. It’s a highly technical workplace. We have to make sure we’re able to stay competitive. … But there’s an impression [among the workers] that there’s a huge boogeyman in this. There isn’t.”

Company officials admit times are robust but say it must be prepared to compete when prices come back to more “normal” levels, Ingulsrud has said.

There is an admission that workers will have to pay more for health coverage, but the company says the health plan being offered to the union is no different from the one non-union workers have. The company says the plan still is far better from the plan most U.S. workers have.

No rush to settle?
No other offers are forthcoming, the company has said.

Froemke is not surprised that Crystal Sugar isn’t in a rush to end the lockout that he believes the company has been planning since January.

One of the things he learned from his father, Froemke said, is “to put yourself in the other guy’s shoes.”

What does he think when he slips on the shoes of Crystal Sugar executives?

“I would say, ‘If I was them, play hardball for a couple of weeks and see if the union collapses,’ ” Froemke said. “I believe that’s what they think is going to happen.”

Pressure, on both sides, obviously will grow in coming weeks. This is a maintenance and repair time at the production plants. Some sugar is being produced from stored syrup and packaging continues with sugar stored in huge silos. But beets won’t start arriving until late this month and peak production time doesn’t start until October.

The key, for both the union and management, is how the owner/farmers will come down on this issue.

Froemke believes that ultimately they will understand that this is playing havoc with the communities they all share.

Doug Grow writes about public affairs, state politics and other topics. He can be reached at dgrow [at] minnpost [dot] com.