EXCLUSIVE: Patch Talks to VP of Dichello Distributors

Peter Deane, vice president of sales and general manager of Dichello Distributors, called Patch on Friday to offer the company’s side of the story regarding the ongoing lock out and contract dispute with its delivery drivers and warehouse workers — who are members of Teamsters Local 443.

History:

Dichello and the union had 18 meetings between December and February with a goal of getting a contract with the Teamsters. But on March 10, the company locked the workers out when the talks became stagnant.

On April 10, Dichello put a “Help Wanted” ad in the newspapers to find permanent replacement workers for both drivers and warehouse personnel.

This action caused even more tension on the line as the job seekers had to cross the line with police escorts, go into the building and then walk through the line again to get to their cars.

One of the locked out workers tossed a cup of noodle soup at the applicants and was arrested. The applicants did not want to press charges against the man.

On Tuesday, the Teamsters received word that they had been approved for unemployment since their situation was deemed a “Lock Out” and not a “Strike” (as the company’s COO Ed Crowley had stated in a press release.)

On Thursday, the employees began seeing unemployment deposits in their bank accounts.

Following is our conversation with Mr. Deane.

“We negotiated and negotiated and put a very competitive offer out there with pay raises, medical benefits and a pension program,” Deane said. “There’s been a lot of talk about how we didn’t negotiate, but that’s not true. In 18 meetings we’re the only ones that moved some of our original offers. We moved substantial items, but they decided to walk away from an extremely competitive offer.”

Deane said the goal of the negotiating team was to get a contract with the Teamsters. “There’s value in it, and we know that,” he said.

PATCH: Is there any extra cost to the company to retain the old contract per the Teamsters request?

DEANE: The two major issues that the Teamsters refused to negotiate in any way, shape or form, were the pension and the health and welfare. They refused to have their members pay a portion of the healthcare which is fair in this day and age, and again, under-funded. But, and this is very important; Dichello needed to remain competitive in an industry dominated by non-union houses. That was the other goal we had to reach, and their pension is drastically under-funded. Our portion alone of the pension liability is $21 million. The pension, in their words is drastically under-funded, and is in critical condition, it’s unsustainable, and we’re just not willing to pay into a pension that very likely won’t be there for the men. Unfortunately, they seem to vehemently disagree with us on that point.

PATCH: We know that a couple of men have crossed the line and have gone back to work. Do you see more of that happening? Do you hope to get some of them back in?

DEANE: We’re hoping to get all of them back, quite honestly, I’m not that young, but I can only take out so many more trucks. We’d like them all to come back; tomorrow. They can come back today if they’d like.

PATCH: How are the deliveries going? How are the temporary workers working out?

DEANE: We’re so proud of them. Our plan included taking some of our non-union force, using them on trucks as helpers and delivery guys. Many of them have CDLs. We also brought in some replacement drivers and warehouse workers and we’re right up to snuff. We’re caught up; any one of our 3,200 customers that was looking for beer after the first week, has gotten everything that they wanted.

PATCH: So, the sticking point with the Teamsters is the pension and the healthcare?

DEANE: With the Teamster negotiating team, yes.

PATCH: What is the difference between the two (Dichello’s offer and Teamster’s request)?

DEANE: Their pension fund, in their words is in critical condition. It’s less than 50% funded. It’s a multi-employer pension and it’s drastically under-funded. Dichello’s obligation into the pension has all been met. We’ve paid into that pension, exactly what we bargained for, for more than 30 years — for 35 years we’ve paid what we agreed to pay in, and at the end of the last contract we still have to pay $21 million because of the promises that the Teamsters made and the investments that they made. We cannot stay with their pension in all good faith.

PATCH: There’s one guy on the line who said when he retires at age 64, he will get something like $350 a month instead of $1,300. [I failed to clarify that this reflected $350 month with the company-offered 401k]

DEANE: Any of that stuff comes from the Teamsters. Again, our obligation for more than 30 years is to pay a certain amount per hour, per guy, that was our obligation. The Teamsters obligation was to invest it wisely and make sure it’s there when the men retire. At this point, they have not done very well with that, and it’s unsustainable; We’re not going to continue to put money into a black hole.

PATCH: But you’re not behind on payments at all?

DEANE: With the pension? No, we’ve fulfilled our obligation. You do understand that it’s under-funded by no fault of our own, but the company is still on the hook for that $21 million: it has nothing to do with any of our promises, or any of our investments.

PATCH: What’s the difference between the healthcare they have now, and what Dichello is offering?

DEANE: The only difference is that is unpalatable to the Teamsters, is that they refuse to have their members pay a portion of their medical benefits. That’s the major difference between the two — Ours requires that they pay 10% and they simply would not agree with that.

PATCH: Only 10%?

DEANE: That’s less than I pay.

PATCH: We’ve been covering this since March 10, is there anything that you would like to clarify or correct from what we’ve reported online?

DEANE: Those were the big issues that you’ve spoken about online and I’ve clarified that with you. We always wanted to contract with them, we did put a competitive offer on the table. Our goal was to get a contract with them that was competitive: what that means is competitive with the rest of the beer wholesalers in our territory, and a vast majority of those are totally non-union.**  That’s been our goal, and it’s still our goal.

PATCH: How long do you see this going on?

DEANE: It’s up to them, they can come back today.

PATCH: Are you willing to sit down with them again?

DEANE: That’s not for me to say.

PATCH: But you have sat down with them, you said, 18 times.

DEANE: Yes, we had 18 meetings and I was at every one of them.

PATCH: And in what period of time was that?

DEANE: The meetings started in December and carried through into February. We actually gave the Teamsters opportunities for many more meetings but, their schedules didn’t permit it, so we ended up having 18. At the 18th meeting they gave us the same proposal that they handed us at meeting one, as far as the pension and health and welfare was still there at meeting 18 with no movement whatsoever and that’s when we decided that we had reached an impasse.

** See attached PDF file for Edward Crowley's letter to retailers regarding non-union wholesale competition.

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