Possible Hormel strike looms as union recommends rejecting contract offer

Unsatisfied with the latest Hormel Foods Corp. contract offer, the meatpackers union at Hormel's Austin plant is urging workers to vote against the deal this week.

If workers vote the offer down, a strike could be imminent in a city that still bears the scars of a previous strike in the 1980s.

The United Food and Commercial Workers (UFCW) Local 663, which represents about 1,600 workers at the plant, said in a statement Sunday the company refused to give workers appropriate wages and pensions after record profits. The union pointed to Hormel's gross profits of over $2 billion over the past 12 months as an indicator the company should pay workers better.

"We believe we can win more if we stick together," UFCW officials said.

Workers are set to vote Wednesday and Thursday on Hormel's offer.

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, though the company offered a $2.15 raise over four years in an Aug. 30 proposal. UFCW officials have publicly released negotiation documents leading up to a meeting last week, but a spokeswoman said Monday the union is only releasing details behind Hormel's last offer to workers for now.

Hormel did not elaborate on its proposal when asked about it Monday morning.

"While we are disappointed we have yet to reach an agreement, we remain optimistic," company representatives said in a statement. "Hormel Foods has had strong working relationships with the UFCW for decades, including in Austin. Our representatives will continue to negotiate in good faith."

About 1,000 workers and union supporters marched through downtown Austin on Labor Day 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.

"We see a lot of new hires who last barely a few months," said Steve Miller, who has worked at Hormel's plant in Austin for 11 years. "They don't look at it as a career anymore."

Several workers at last week's march said they don't want to see a repeat of the 1985-86 strike that ended in failure for the union and tore the community apart. At the same time, workers said they're willing to walk off the job if Hormel doesn't pay better.

In 1985, Hormel proposed lowering meatpacker salaries by 23%, from $10.69 to $8.25 an hour. Hormel officials, led by then-CEO Richard Knowlton, himself an Austin native, said the cuts were necessary to remain competitive among other meatpacking companies.

That strike lasted 10 months and made national headlines after Hormel reopened the plant with new workers in January 1986.

Protests broke out anew and Gov. Rudy Perpich sent in the National Guard to keep the peace. The strike ended after the Local P-9 union was placed in receivership and national union trustees were sent in.

The strike caused deep rifts in Austin, with families not speaking to each other and neighbors bearing grudges — some to this day. The strike also spawned an Oscar-winning documentary that to this day is used as a case study in labor and economic classes.

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 to 2022.