Creamery union leaders notified

Books appeared sound during recent contract negotiations

Originally published in the "2-26-09" issue.

Redding-based Teamsters Local 137 represents about half of Humboldt Creamery’s approximately 250 employees. The local represents both the creamery’s office staff and other employees. Contacted by phone midmorning on Tuesday, Local 137’s secretary/treasurer Dave Hawley said he was just as surprised as everyone else at the sudden resignation of Humboldt Creamery CEO Rich Ghilarducci. “I just heard about it about 20 minutes ago,” he said candidly from his office. “We’re completely surprised and concerned about our members, and concerned about their jobs and health and welfare.”

Local 137’s business manager Mike Moffat at the creamery Tuesday.

Hawley said that during contract negotiations with the creamery, most recently for the existing four-year labor agreement that took effect in 2007, it appeared that the financial health of the company was sound. He added that a company’s financial soundness is typically at the top of the agenda during contract negotiations, and that federal law provides unions with the right to examine a company’s books if the employer claims the company cannot pay what a union wants because it can’t afford to pay it.

That’s exactly what happened in 2006, when Local 137’s auditor met with the creamery’s auditor in San Francisco during negotiations for the current 2007 contract, which was ultimately ratified by the membership without either a work stoppage or a strike.

“Our position is that if the company is profitable its employees should share in that,” Hawley said. “Though it doesn’t show on their balance sheets, we [try] to get an idea of the valuation of the company with its expansion and increased valuation.”

Hawley said that at that time there appeared to be no obvious financial problems with the company.

“They’ve always been heavily leveraged but it seemed like it was working out,” he said. “Last summer they were running at full bore.” Hawley also noted that the creamery business is capital intensive. “It costs money to buy equipment,” he said.

Hawley said that Local 137 will set up meetings with its members as soon as more information is available, and that Local 137 will soon be talking with the union’s Sacramentobased legal counsel.

In a worst-case scenario, he emphasized that “Our members are creditors,” a key consideration should the creamery ultimately be sold, liquidated, or seek reorganization protection under Chapter 11.

“If they are heading to bankruptcy we have a lot to talk about,” he said.

Meanwhile, Local 137’s business manager Mike Moffat spent Tuesday morning in Fernbridge, talking with both Humboldt Creamery’s Human Resource Manager Renae Will, who had called to give him a heads-up about the press release announcing Ghilarducci’s resignation, and with Local 137 union employees working on the creamery’s production floor.

“They [the employees] are very concerned but also very positive,” he said after his visit to the Fernbridge facility. “My take is that there’s a positive atmosphere with employees on the floor and with the company and they’re going to work through it.”

Moffat said Will promised that “as soon as we know anything, you and the employees will know.” At the time this article was completed, no employee meetings had been scheduled.