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The Los Angeles Times reported over the weekend that Vons president Tom Keller is saying that while the differences between Southern California’s three major grocery chains and organized labor have “narrowed,” negotiations between the two sides have “stalled,” with no immediate prospect for a final contract agreement and a growing likelihood that his company could be hurt by the impasse.

"These tactics can cause our customers to lose faith in our ability to meet their needs, and that increases the chances they will permanently find alternatives to Vons … Unfortunately, it's now beginning to look like June or even July could come and go without a settlement on new Southern California … contracts," Vons President Tom Keller said in a letter to employees, according to a Times story.

The Times notes that “previously in the talks, the sides have agreed on improved health and welfare benefits with shorter waiting periods for eligibility. The employers also have proposed a plan that would put all workers on a top pay tier after nine years of service … Gaps still remain over key issues such as the level of healthcare funding and the number of years an employee would have to work to jump onto the top pay and benefit track.”

The contract between the two sides – arrived at three years ago after an extended strike/lockout – expired on March 5, but has been extended twice by mutual agreement.
KC's View:
It is an interesting dynamic. The three chains – Supervalu-owned Albertsons, Kroger-owned Ralphs and Safeway-owned Vons – all are facing not just the possibility of another crippling strike, but also the high-profile opening of Tesco’s Fresh & Easy Neighborhood Markets later this year.

At the same time, the UFCW is threatening Tesco with picket lines since the UK-based retailer plans to not use unionized employees in its US operations…and so it probably needs to continue doing business with the big three in a constructive and viable way.

It is in everybody’s best interests - the chains and the unions – to get this deal done and quickly. But most of all, get it done right – and that means confronting the health care issues raised by Safeway CEO Steve Burd in a way that increases personal responsibility of employees and reduces costs in a way that helps both citizens and companies.