Giant may sell Maryland warehouse; union fears 500 jobs may be endangered

A double deals sign greets shoppers entering the Giant store on Westbard Avenue in Bethesda.
A double deals sign greets shoppers entering the Giant store on Westbard Avenue in Bethesda. (Mark Gail - The Washington Post)
By Ylan Q. Mui
Washington Post Staff Writer
Friday, April 9, 2010

Giant Food is considering selling one of its warehouses in Maryland to a third-party distributor, a move that union leaders said could endanger roughly 500 jobs.

The region's largest supermarket chain operates two warehouses in Jessup -- one that stocks perishable foods and one that stocks dry groceries. The company, which is owned by Dutch conglomerate Royal Ahold, said it has tentatively agreed to transfer ownership of the dry groceries warehouse to Jessup Logistics, an affiliate of C&S Wholesale Grocers, by the end of the year.

But the union representing warehouse workers, Teamsters Local 730, said it did not learn of the arrangement until this week and that it violates the term of its contract, which expires in May 2011. President Ritchie Brooks said the contract prohibits Giant from selling only part of its warehouse business. He was also concerned about the fate of the approximately 500 workers if the warehouse changes hands, particularly after their contract expires.

"We were just blindsided," said Brooks, who met with company officials on Thursday. "They're coming after good jobs."

Giant said that under the proposed agreement, Jessup Logistics would have to adopt the terms of the current union contract.

"We're going to continue the dialogue with the union to try to move the agreement forward," Giant spokeswoman Kim Brown said.

In 2005, Giant closed three other distribution centers that handled frozen foods and beauty and general merchandise as part of a mass layoff of 500 employees, the largest in company history at the time. It also pulled out of its 80-acre corporate campus in Landover and has since merged almost all of its administrative functions with sister company Stop & Shop, based in Quincy, Mass.

Giant said it hopes to finalize the agreement with Jessup Logistics within three months and that the deal would allow the grocery to streamline its supply chain and focus on delivering fresh foods. Customers would not experience a change in service, it said.

"This move is designed to better position our supply chain network to be more efficient and flexible while still offering superior value and quality to our customers," Giant President Robin Michel said in a statement.

Meanwhile, Safeway has begun offering its most senior store employees in the Eastern Division a voluntary buyout, spokesman Greg TenEyck said. Workers were notified this week and have through late summer to decide whether to participate.

"We're not doing this to reduce the number of employees," TenEyck said. "It's to reduce costs."

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