041050 Tyson Seeks Temporary Wage Freeze

Wallula, WA - Citing "substantial" financial losses at its Wallula beef plant, Tyson Fresh Meats Inc. has proposed freezing wages for about 1,500 union workers for a year, the company told union officials during labor negotiations this week.

Teamsters union Local 556 decried the wage freeze proposal, but said they would continue working toward a contract to replace a five-year agreement that expired in May.

The company has proposed holding workers' wages at their current levels -- from $9.50 to $11 per hour for most production workers -- for one year, then re-opening wage negotiations, Tyson spokesman Gary Mickelson wrote in an e-mail.

"By then, we're hopeful these trade issues will be resolved and we'll be able to realistically consider wage improvements," he wrote.

The Wallula plant "has been operating at a substantial loss because of the U.S. ban on Canadian cattle and the ban on U.S. beef by major export countries such as Japan and Korea," Mickelson wrote.

The discovery of mad cow disease in Canada in 2003 shut off Canadian cattle, which had made up 10% to 30% of the plant's cattle supply, increasing the cost of shipping cattle from farther off and forcing the plant to operate fewer hours each week, he said.

Also, the case of mad cow disease discovered in Mabton in December 2003 cut off exports to countries including Japan and South Korea, which had accounted for about 20% of the plant's sales, he said.

While an agreement to reopen Japan's borders to U.S. beef was reached last week, Mickelson said, "it could be months" before the Wallula plant can resume exporting beef there and more time before exports reach pre-ban levels.

Teamsters Local 556 representatives said they were disappointed with the proposal, given the profitability of Springdale, Ark.-based Tyson Foods Inc. The chicken and pork company became the world's largest meat company with its 2001 purchase of beef company IBP Inc., now named Tyson Fresh Meats.

"We're not happy about it," said Maria Martinez, Local 556 secretary-treasurer. She said most workers at the plant earn about $10 per hour, and that Tyson has also proposed increasing the cost of workers' health insurance.

Union workers have been working under the terms of a prior five-year contract since it expired in May and have been negotiating a new contract since April.

"We're definitely going to continue negotiations, and workers' issues need to be addressed," said Lorene Scheer, Local 556 organizing director. "That includes wages that people can survive on, health insurance that people can afford and worker safety."

The plant, which typically ran 40 to 48 hours a week before the mad cow disease discoveries, has run an average of 32 hours per week or less this year, Mickelson said.

At the national level, n the nine-month period ending in August, Tyson Foods reported earnings of $337 million on sales of $19.3 billion, compared with earnings of $190 million in the same period in 2003. The company employs 114,000 people in 27 states and 22 countries.

But on Aug. 30 the company downgraded its fourth-quarter earnings expectations, partly because of plant closing costs and weaker-than-expected beef sales.

The Washington state Legislature this spring approved a business and occupation tax break for Tyson Fresh Meats and other state meatpackers to help them recover from the effects of the Mabton mad cow discovery.

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