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Locked-out Crystal Sugar workers: CEO likens us to tumor

David Berg

Union representatives of the 1,300 locked-out American Crystal Sugar Co. workers today released audio tapes of a Nov. 7 shareholders meeting in Grafton, N.D., in which they said the speaker -- identified as Crystal President and CEO Dave Berg -- "likened the workers to a 21-pound cancerous tumor."

A company spokesman said that Berg "regrets using an analogy that compares our union contract to cancer," but that the union's statement takes his words out of context.

The audio tapes also indicate that Berg acknowledged to shareholders that the ongoing struggle with Crystal's union workers has been expensive, but he said it would benefit the company in the long run.

He also said that he and other company executives "mapped this (strategy) out long, long ago" and "shared (it) with the board in great detail."

Berg said it would have been "the simplest thing in the world to just renew the old contract, five years, let them keep the health benefit, give them a 2 percent wage increase and not change anything else."

But "at some point, that tumor's got to come out," he said.

"I'm not going to lie to you. It's expensive. We're investing a lot of your money (in the labor struggle) so that you'll be profitable in the future.

"I think I used the phrase (in an August meeting) that freedom isn't free," he said. "Nothing worth having comes cheaply. So we are investing a lot of money on this."

He said that "specific information" on what the company is spending related to the lockout "has to remain confidential" because it is information "the negotiators on the other side want to get out of us, so we're not going to do that."

He urged shareholders to stay focused on the potential long-term benefits.

If the company can achieve the sort of agreement it seeks, "we'll have the right people, put them in the right jobs and run more efficiently for decades into the future," Berg said.

'We have to treat the disease'

Union officials said the Nov. 7 remarks by Berg were recorded by someone who attended the shareholders meeting and later shared the tapes with the union but wished to remain anonymous.

In their news release, officials of the Bakery, Confectionery and Tobacco Workers and Grain Millers (BCTGM) said that Berg was recorded telling a story about a friend who had been diagnosed with cancer. Doctors treating him had removed a massive tumor.

"That's a scary deal," Berg says on the recording. "He was sick for a long time. We can't let a labor contract make us sick forever and ever and ever. We have to treat the disease and that's what we're doing here."

Sarah Gust, identified in the union news release as a 40-year worker at the company, said the statement "just shows how much respect Dave Berg and the management have for us workers."

"The fact that Dave Berg would refer to our union, our contract as a cancerous tumor is deeply offensive to me and many of my co-workers," Gust said. "Some of us have had cancer or have lost loved ones to cancer. It's a tragic, devastating disease. And that's how Crystal Sugar management sees our union."

Brian Ingulsrud, vice president of administration at Crystal, said that Berg was addressing the contract, not the union or its members.

"What he wanted to convey was that our contract has grown over time and needs to be refined to ensure we remain a healthy company," Ingulsrud said.

In some comments, included in audio clips attached to the union's release but not quoted in the written statement, Berg appeared to pull back from the cancer analogy.

In one of those audio clips, Berg says, "I'm not saying a labor contract is cancer, but it affects you. It will drag you backward. You cannot do what you have to do.

"And I'm not saying we're trying to get rid of the labor contract. We're not about union busting. Take that one home with you -- we are not about union busting. But we can't let the labor contract make us sick. ... We have to treat the disease, and that's what we're doing here" in the showdown with the union.

Ingulsrud, who said he also recorded Berg's remarks at the Grafton meeting, said, "I would say they're really taking liberties" with Berg's words.

"The union contract has grown over time for many, many years," Ingulsrud said, "and over that course of time it hasn't changed in a way that it can deal with the changing realities of our business or the economy in general.

"In order for us to remain a healthy company, we need to deal with that issue. I don't think in any way he ever compared the union to a tumor."

Berg was engaged in board meetings today and unavailable to comment directly, Ingulsrud said.

'A serious blow'

Union officials called Berg's remarks "another serious blow" to an "already strained relationship" between the company's management and the workers, who have been locked out for four months.

The company has processing plants in East Grand Forks, Crookston and Moorhead, Minn., and Hillsboro and Drayton, N.D., as well as packaging and transportation sites in Chaska, Minn., and Mason City, Iowa.

It has been operating with replacement workers hired through a Twin Cities company, but union officials noted that the company last week began placing help-wanted ads in the region to move to the next phase of its "contingency plan" to deal with the union.

According to the union, new workers will be paid wages "significantly below" those of locked-out workers.

"This is just Crystal Sugar executives' cynical attempt to demoralize locked-out workers, depress local labor standards and drive a wedge between us and our neighbors," said Ken Lamberson, a 16-year Crystal employee.

"Our contract represents years of struggle to protect good jobs at Crystal and build a mutually respectful relationship with management," he said. "Now, Dave Berg is throwing all of that away for greed."

John Riskey, president of BCTGM Local 167G in Grand Forks, said Berg's remarks at Grafton show his "true colors."

"He is determined to treat contract negotiations as a disease, a tumor to be removed," Riskey said. "We've said from the start that we want to negotiate, as long as management comes to the table with reasonable proposals, and not the same take-it-or-leave-it ultimatums."

Ingulsrud said the company has made "multiple fair offers" to the union.

"We offered a 17 percent increase in pay on top of an already generous $75,000 pay and benefit package, the average pay and benefit package for a union employee at American Crystal," he said. "We had hoped they would accept that offer. Had they accepted, they'd all be at work today."