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Teamsters Reject Giant Eagle Offers, Warehouse to Close

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AUSTINTOWN, Ohio — Members of Teamsters Local 377 learned Thursday that when they twice reject what Giant Eagle Inc. terms its “final offer,” it means business. So much so, in fact, Giant Eagle plans to close its Tarmarkin Co. warehouse and distribution center at 375 Victoria Road in May, and instead move operations to “a third party represented by another Teamster union [that operates] a frozen foods distribution center in Ohio.

In its contract offers to the union, Giant Eagle promised to build a $5 million warehouse in the area but asked for some changes in work rules, lower pay for entry-level workers and contributions to a 401(k) in lieu of continued participation in the Teamsters’ pension plan. In December, Teamsters rejected the offer for the second time.

Some 200 workers are employed here, about 165 are members of Teamsters 377.

The union did not respond to requests for comment.

Published reports indicate the distribution center that Giant Eagle plans to use is in Solon. A website check finds Great Lakes Cold Storage, a third-party logistics provider with operations in Solon and Pittsburgh. The company is affiliated with The World Group, a partnership of independent companies joined in a network of 50 refrigerated warehouses in the United States, Canada and Mexico.

In a prepared statement attributed to Dan Donovan, marketing manager, corporate communications, at Giant Eagle, the company said:

“The current Tamarkin Co. retail support center for frozen foods was constructed in 1968. The Tamarkin Co. now supplies 427 retail locations across four states, and additional geographic support will be needed later in 2015. The company provided a final offer two times to the Teamster Local 377 team members at the outdated and deteriorating Tamarkin facility to extend the labor agreement for four years. The offers, which included building a new facility in Youngstown, increasing wages, maintaining health benefits and adding a generous 401K plan, were rejected by the union members both times. For these reasons and others, operations are planned to cease at Tamarkin while a third party represented by another Teamster union will operate a frozen foods distribution center in Ohio. The company will partner with other local organizations to provide outplacement support to affected team members.”

The Pittsburgh-based company subsequently released an addendum to its statement, apparently countering reports citing union members’ claims about the terms of the contract, Giant Eagle said:

“In follow up to our prior comment, the proposed contract that was rejected twice by the union’s membership did not contain any reductions. It provided wage increases in each year of the proposed four-year agreement, maintained health care benefits, and replaced a failing union pension plan with a generous 401(k) benefit. It did contain some modest productivity improvements that are in place at similar distribution facilities, but it also offered to build a new facility in the Youngstown area. Unfortunately, the team members rejected that offer and the company has now found a better alternative for its frozen food distribution needs.

Giant Eagle Inc. is ranked 35th on Forbes magazine’s largest private corporations list with approximately $9.6 billion in annual sales. The company, founded in 1931, operates 232 supermarkets and 195 fuel and convenience stores throughout western Pennsylvania, Ohio, West Virginia and Maryland.

Published by The Business Journal, Youngstown, Ohio.