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Giant to Cut Up to 500 Jobs, Close Local Plants

Grocer Also Leaving Landover Headquarters

By Michael Barbaro
Washington Post Staff Writer
Wednesday, May 4, 2005; Page A01

Giant Food LLC, the area's biggest supermarket chain, said yesterday that it would lay off as many as 500 Washington area workers, sell or close all of its area manufacturing operations, and pull out of its 80-acre corporate campus in Landover.

The shutdowns -- and the biggest single layoff in Giant's 69-year history -- mark the final step in the transformation of the homegrown grocery chain with a local network of plants and distribution centers into a subsidiary of a global corporation.

A Giant truck driver unhitches a trailer from his truck in 2001. Since the chain was bought by Royal Ahold in 1998, when it was one of the region's biggest employers, it has laid off employees while adding more stores. (Sarah L.voisin -- The Washington Post)

The actions are designed to cut costs at Giant, which was acquired by Dutch food company Royal Ahold NV in 1998. Since then, the new ownership has tried to increase profit from the formerly family-run company, trimming employee hours, outsourcing departments and merging the chain with its corporate sibling, Stop & Shop Supermarket Co. of Quincy, Mass. Yesterday's actions will improve the grocery chain's operations, company executives said.

But Giant workers criticized the decision. "It's sad. We've been watching Giant get taken apart," said Larry D. Crandall, 55, a 36-year company veteran whose job operating a forklift at a Giant warehouse is in jeopardy.

Some of the 500 workers whose jobs are being eliminated may be able to transfer to other Giant divisions, and none of the jobs will be eliminated immediately. Union contracts that cover most of the workers require several weeks' notice before a job can be eliminated and provide for generous severance packages. None of the layoffs will affect store employees.

Giant, founded in Washington by local entrepreneurs N.M. Cohen and Samuel Lehrman in 1936, will relocate its remaining administrative operations to a small office in Prince George's County, though the chain has not selected a site, said company spokesman Barry F. Scher.

But the chain will close or sell its local manufacturing operations, including an ice cube plant and a dairy in Landover and an ice cream facility in Jessup. Giant said it expects employees at its dairy will be employed by a new owner. In addition, it will close three distribution centers: a frozen food distribution center in Jessup, a health and beauty care distribution center in Landover, and a general merchandise distribution center, also in Landover. The company will maintain and expand its grocery and perishable distribution centers in Jessup.

"We are doing all of this to become a more efficient company," Scher said. "We are getting out of the manufacturing business and leaving it to the experts and closing old, antiquated warehouses."

Union leaders said they will fight the job cuts. Philip Giles, the recording secretary of Local 639 of the International Brotherhood of Teamsters, which represents workers at Giant's manufacturing plants, said the union "would do everything we can to reduce or eliminate these layoffs." Archie Smith, president of Teamsters Local 730, which represents Giant warehouse and distribution workers, said the union and the chain already have clashed over whose jobs are protected from cuts and for how long.

Defending the layoffs yesterday, Giant and Stop & Shop executives said they will invest money saved from the closures into improving stores, whose renovations and replacements have lagged behind Giant's competitors. The average Giant store is 8.7 years old, compared with 6.4 years for Stop & Shop's stores.

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