Sugar workers to consider contract that would replace one that expired Saturday

American Crystal Sugar Co. workers will vote Thursday on a company proposal that would increase wages by 2 percent annually over a three-year contract but would shift some health-care costs on to workers.

James Horvath, Crystal president and chief executive officer, spelled out the program in a letter written Aug. 2 and obtained by Agweek and the Herald.

The Bakery Confection Tobacco Workers and Grain Millers union has been negotiating with the company on and off for two years on a new labor contract to replace a contract that expired Saturday.

Talks ended with negotiators late Saturday, without an agreement, but the workers will have a chance to vote on the proposal by the company anyway, and the company and union both will hold informational meetings.

The company last negotiated a contract in 1999. That was a three-year contract that was extended for two years in 2002. In the letter, Horvath said resolving the health-care plan was a "priority issue because of the dramatic increase in medical and prescription costs."

The company's health-care costs doubled to $7,113 per employee in 2003, up from $3,576 in 1999, he said.

Crystal's costs have grown out of step with national trends. He said 87 percent of union employees, nationwide, pay premiums to cover medical insurance costs, while Crystal workers don't. He said the average co-payment for branded prescription drugs, nationwide, is $35, while Crystal employees pay $8.

Horvath listed several changes that are "relatively small and will only begin to bring our health-care costs back in line with those of our competitors and other union employers."

Those include:

• Increase deductibles for medical care from $150 per year for single employees to $250 for the first two years of the contract and $350 after that. Deductibles for family employees would go from the current $450 to $750 for the first two years and $1,050 for the final year of the contract.
• Drug co-payments would go from $8 to $15 for retail prescriptions and from $16 to $30 for mail-order prescriptions for a 90-day supply.

Horvath emphasized that these are the only changes proposed by the company.

"We have not proposed that employees begin paying health-care premiums," Horvath noted.

Besides a 6 percent wage increase over the life of the contract, Crystal would increase pension contributions at $1.50 per month per year of service and would offer a long-term disability plan, for which the company would pay 50 percent of the premium for employees who choose the option.

The company also will require drug testing based on a "reasonable suspicion" of use, for both union and nonunion workers and contractors who work in the factories.

Earlier this week, workers at the Southern Minnesota Beet Sugar Cooperative at Renville, Minn., were locked out of their factory over disagreement over an expiring labor contract.

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