As a labor negotiator, Stuart Appelbaum, president of the Retail, Wholesale, and Department Store Union International, has seen his share of financially-strapped companies trying to cut employees' wages and freeze benefits. He's understood it, and even agreed to some concessions.
But Appelbaum said he has never encountered a company that demanded wage cuts when its profits were up and its prospects promising.
So, earlier this year, when Dr Pepper Snapple Group, Inc., the food and beverage conglomerate, demanded that 305 workers at its Mott's subsidiary near Rochester, New York, accept a $1.50 per hour wage cut, Appelbaum and his fellow union members dug in their heels. DPS had just come off a year in which profits exceeded one-half billon dollars.
The Mott's plant workers, who belong to RWDSU Local 220 and earn around $20 an hour, went on strike early Monday, citing unfair bargaining practices.
DPS has begun hiring temporary workers to run the plant, the only one in the U.S. that still makes and packages Mott's apple sauce.
Chris Barnes, a spokesman for the Plano, Texas-based conglomerate, insisted that the company has negotiated in good faith over a contract that expired in mid-April, offering workers a compensation package in line with local industry norms.
"We offered to keep wages unchanged after three years of salary increases and, unfortunately, the union rejected this offer," Barnes said. "As a result, we have reached an impasse in negotiations and implemented new terms that reduce wages by $1.50 an hour. Under the implemented terms, their wages are still well above the average for manufacturing jobs in the Rochester area."
Striking workers aren't buying the rationale for the proposed slash in hourly pay, even in a fragile economy.
Considering the millions of dollars made by the parent company's executives and shareholders just in the past year as DPS's shares soared to all-time highs, the plant workers view their struggle as nothing less than a battle in defense of the American worker.
"When you get down to it, this situation is much bigger than just some unhappy workers at a Mott's apple juice plant in upstate New York," Appelbaum said. "This is about a large company doing extraordinarily well demonstrating outrageously greedy behavior. It's beyond outrageous. It's un-American."
Since being spun out of U.K. conglomerate Cadbury Schweppes two years ago at around $25 per share, DPS shares have risen to nearly $40, and have more than doubled off of March 2009 lows. Last year, the company, which produces 50 brands, including Mott's juice, namesake brands Dr Pepper and Snapple, as well as 7-Up, Hawaiian Punch, A&W root beer and others, recorded $555 million in profits on more than $1 billion in revenues. DPS's three highest paid executives, including CEO Larry Young, all saw their pay increase more than 100 percent in 2009 compared to pre-spinoff levels in 2007. Young actually endured a pay cut in 2009 compared to the prior year. He earned around $6.5 million in total compensation, down from around $8 million earned in 2008.