InBev may seek labor peace with Teamsters
Hundreds of union members and their families milled around Kiener Plaza in downtown St. Louis last month under a blazing blue Saturday sky. Some clutched placards — "InBev — Don’t forget who makes this Bud!" At exactly 1 p.m., drivers of parked tractor-trailers leaned on their horns. A blaring crescendo signaled the Teamsters were in town, ready to roll.
It remains to be seen whether the International Brotherhood of Teamsters will be so rowdy in an upcoming round of national contract negotiations with St. Louis-based Anheuser-Busch Cos.
Events are moving fast and furious: InBev of Belgium expects to finalize a $52 billion takeover of Anheuser-Busch — the biggest buyout in the history of beer — by the end of the year. A five-year contract between the Teamsters and Anheuser-Busch is set to expire Feb. 28; negotiators will go behind closed doors the week of Sept. 29 try to draw up a new contract.
For now, signs point tentatively toward a peaceful, swift and smooth labor negotiation.
"The Teamsters don’t want the uncertainty" from a long or strident standoff, said Gary Chaison, professor of industrial relations at Clark University. "InBev doesn’t want the uncertainty, and Anheuser-Busch knows it’s more valuable without uncertainty."
The Teamsters, one of the country’s biggest unions, faces an odd dynamic as InBev comes to town. The incoming owner of Anheuser-Busch is known for a tough approach toward unions in Belgium, Canada and Brazil. No one knows exactly how InBev will behave toward the Teamsters, which represent about 8,000 Anheuser-Busch employees in the U.S. — about a quarter of the company’s overall work force.
"With Anheuser-Busch, I knew where I stood to a certain degree," said Ray Wilkinson of House Springs, a fourth-generation brewery worker. "I’m concerned for my family. … Right now, I don’t know where I stand."
InBev has tried to assuage concerns about its planned acquisition. The giant Belgian brewer says it will keep all 12 of Anheuser-Busch’s U.S. breweries open, and says it expects the takeover of A-B to have little or no impact on union jobs.
But the Teamsters remain skeptical, arguing that InBev will be under pressure to make good on $45 billion of debt it shouldered to finance the purchase of Anheuser-Busch. The Teamsters wanted to know how that amount of debt — and the need to cut costs — squared with InBev’s assurances. The highly leveraged nature of the transaction raises "major credibility issues," the Teamsters said earlier this summer.
For their part, InBev and Anheuser-Busch have said the combined company will trim $1.5 billion in costs by 2011 — but mostly through economics of scale, overlapping corporate functions and cuts in the salaried, nonunion work force.
Meanwhile, the Teamsters union says its top priorities in the negotiations with Anheuser-Busch are protecting jobs, pension benefits and health care — demands that reflect the fact that many brewery workers’ dads and grandfathers also worked at Anheuser-Busch.
OPPORTUNITY
Relations between A-B and the union haven’t always been tranquil.
Ten years ago, contract negotiations between the Teamsters and Anheuser-Busch temporarily ground to a halt as things turned nasty. The union twice voted down a proposed contract before a deal was struck, narrowly avoiding a strike.
But by December 2003, the chill had thawed. Anheuser-Busch wrapped up quick negotiations with the Teamsters and emerged with a contract that has helped smooth labor relations.
By ratifying early, about 7,500 Anheuser-Busch employees covered by the contract got early wage and benefit increases and a $1,000 ratification bonus. Anheuser-Busch committed to keep all 12 U.S. breweries open during the term of the agreement and provided wage raises in all five years as well as bigger pensions.
Will the contract negotiations be swift, smooth and painless this time around? A few factors say yes.
First, rather than salivating over the opportunity to squeeze the union, InBev may want to stay in the background. If Anheuser-Busch hammers out a new union contract quickly, the Belgian company would get valuable, precise information about the labor issues and financial costs it is inheriting at America’s biggest brewer.
At the same time, the Teamsters want to demonstrate they are pragmatic employees that InBev can live with. A constructive approach to negotiations would go a long way in that direction.
"Make no mistake — we’re committed to the success of Anheuser-Busch and InBev," said Jack Cipriani, director of the Teamsters brewery and soft drink conference.
The Teamsters could benefit from negotiating with Anheuser-Busch — with whom it has had a stable relationship in recent years — rather than with InBev no fax payday advances. Lurking in the background is the possibility that, if the union drags its feet and throws up roadblocks to a new contract, InBev could close its buyout of Anheuser-Busch, swoop in and start to throw its weight around.
The next three to four months are "the window of opportunity," Paul Garver, brewery worker coordinator for the International Union of Food Workers, said at the Aug. 16 rally in downtown St. Louis. "Once this merger goes through, the promises that have been made through the media will be meaningless," said Garver, whose group is an international federation of trade unions.
If the new contract is in place before InBev takes control of the biggest U.S. brewer, InBev has to live with it. But if InBev takes over while the Teamsters and Anheuser-Busch are still negotiating, previous progress could conceivably come to naught. InBev would have the opportunity to bargain hard, and could take a very different stance toward the union than did Anheuser-Busch. If the company — or the union, for that matter — dug in its heels over unresolved issues, talks could break down.
Several observers said InBev would likely not want to rock the boat by stirring up labor trouble, even if it did have to mop up the union negotiations.
Despite the arguments for urgency, the Teamsters want to flex their muscles and demonstrate the ability to secure a solid contract. The Teamsters "can’t sell out to Anheuser-Busch just to get a deal," said Neil Martin, a Houston labor lawyer with the law firm Gardere Wynne Sewell. "They’ve got to live with the deal."
The Teamsters would put themselves at a disadvantage in negotiations by appearing too eager to get a new contract with Anheuser-Busch. Chaison said the Teamster’s current message to Anheuser-Busch is, "’We’d like to get a quick agreement with you, but it’s not the end of our world if we don’t.’"
Things are going smoothly this time in preliminary talks. Anheuser-Busch and the Teamsters recently wrapped up a few days of "professional and productive" negotiating sessions in Cincinnati, focused on local issues such as work rules at each brewery.
The upcoming national negotiations over issues such as wages and health care promise to be more difficult. Still, some Teamsters and labor analysts expect this round of contract negotiations to be uneventful, given the encouraging start. "We’re going to get a contact," said Dan McKay, president of the Teamsters Joint Council 13. "We’re going to get a good contract."
NEW REALITY
Where will the future balance of power lie between the Teamsters and Anheuser-Busch InBev? Like many unions, the Teamsters have suffered from the slippage of union membership in the U.S. The days may be gone when hard-muscled labor strife made the union feared. But the Teamsters union still has some kick and a well-earned reputation for shrewd and pragmatic negotiations.
The labor movement in general has "really taken it on the chin over the last couple of decades, but the Teamsters are better situated than a lot of manufacturing unions," said Roland Zullo, assistant research scientist at the University of Michigan’s Institute of Labor and Industrial Relations. Why? A concerted effort to diversify the union’s membership beyond truck drivers, said Zullo.
The Teamsters have lost some of their pull in the national labor movement and in state and local politics, but they "still carry clout among the workers at Anheuser-Busch, and they will still have something to say," said Henry W. Berger, emeritus professor of history at Washington University.
Now, the Teamsters are trying to rebalance the scales of power between unions and a brewing powerhouse — Anheuser-Busch InBev — that will supply one-fourth of the world’s beer. The Teamsters and other unions are trying to forge a new international partnership of unions that represent workers at InBev’s breweries in Brazil, Canada, Europe and — when the A-B takeover closes — the United States.
The rise of global entities like Anheuser-Busch InBev means "we must all adapt to new circumstances," said Cipriani. "The Teamsters in St. Louis are adapting to a new international reality."
jmcwilliams@post-dispatch.com
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