Hormel meatpackers in Austin, Minn., reject contract offer, setting the stage for strike

Union workers and meatpackers in Austin have rejected a four-year contract proposal from Hormel Foods Corp., setting the stage for further discord and a potential strike in the company's hometown.

The United Food and Commercial Workers Local 663 said in a statement Friday that workers overwhelmingly voted against Hormel's latest proposal for a new contract. The union, representing more than 1,700 workers in Austin, is calling on the company to return to the negotiating table.

"Hormel's record profits are just wages not shared fairly with the rest of us," the UFCW bargaining committee said in the statement. "The reality is that we keep Hormel running. We demand that Hormel does better and comes to the table for a fair agreement quickly."

Hormel officials say both sides have agreed to a contract extension through Oct. 8.

"We are disappointed in the vote, especially given the significant contract package offered, however we remain optimistic that we will reach agreement," the company said in a statement. "Hormel Foods has had strong working relationships with the UFCW for decades, including Austin, and remain confident that these positive relationships will continue as we finalize these new agreements."

Negotiations for a new four-year contract between workers and Hormel started in July. The current contract expired on Sunday.

Meatpackers are pushing for better pay, pensions and insurance costs among other issues. The union's final offer to Hormel last week included $6.25 wage increases by September 2025.

It's unclear what Hormel's final offer contains. The company offered a $2.15 raise over four years in an Aug. 30 proposal, the latest that's publicly available. UFCW officials have publicly released negotiation documents leading up to a meeting last week, but both Hormel and the union declined to release the details behind the company's latest proposal.

The UFCW also did not specify how many workers voted for or against the offer.

The ongoing wage fight heightens the risk of a work stoppage in Austin, a southern Minnesota community of 25,000 that still carries unpleasant memories of a strike in the 1980s.

The strike of 1985-1986 ended in defeat for the local union but garnered significant national attention, along with deep rifts in the city. Families stopped speaking to each other and neighbors bore grudges — some to this day.

About 1,000 workers and union supporters marched through downtown Austin on Labor Day this year to highlight UFCW's contract demands.

Workers there said it was past time for a substantial raise to keep up with inflation and cost-of-living increases as turnover at Hormel remains high. They said better-paying warehouse jobs can be found in nearby communities, some as high as $28 per hour to start, while meatpackers on average make about $20 per hour.

The contract talks come as Hormel profits — and the prices of bacon, turkey and other commodities —dip as markets adjust to post-pandemic conditions. The company recently lowered its financial forecast for the rest of 2023, estimating its sales will decline as much as 4% or remain flat compared with 2022.

Hormel's net profit over the past four quarters is $877 million.

Labor unions across multiple industries have been emboldened recently to organize and strike for better pay. The UFCW in Minnesota has negotiated several contracts with local grocers including Cub Foods and Lunds & Byerlys in recent months after threatening to strike.

About 13,000 workers at all three major Detroit automakers went on strike Friday to pressure General Motors, Ford and Chrysler owner Stellantis to raise wages.