In 1999 Gigante, one of Mexico’s leading supermarket chains, launched into the US. In its effort to unionise Gigante USA, the United Food and Commercial Workers (UFCW) have recently made claims with which management begs to differ. Although management is at odds with statements made by the UFCW, it says it will not interfere with the decision of individual employees as to union membership. Steve Lewis examines the issue.

In recent years, the US/Mexico border has become less and less of a barrier to food producers and retailers. During the latter half of the 1990s HEB, the largest supermarket chain in Texas, aggressively entered Monterrey, Northern Mexico’s largest urban market. In 1999 Gigante, one of Mexico’s leading supermarket chains, started the first stage in its US operations, involving three stores in primarily Hispanic districts of Los Angeles. In its effort to unionise Gigante USA, the United Food and Commercial Workers (UFCW) recently made claims with which management begs to differ.

For example, UFCW maintains that the chain pays entry level salaries in the range of US$6.50 and US$7, which they claim is less than half the going rate in US-based supermarkets. Nevertheless, Justo Frias, President of Gigante USA, states “Our hourly compensation package is probably in the 95th percentile in our market. Most of our employees are eligible for full healthcare coverage after the first 90 days of employment and after one year are eligible to participate in the company’s 401(K) plan.”

It appears that the union is trying to generate support among the ranks of Gigante employees based on the argument that they need to be protected from alleged abuses, including reduced work schedules for union sympathisers. Nevertheless according to Frias, “Gigante does not have the time, nor does it desire to single out any of its employees for making what is a very personal decision, namely whether or not to become part of a collective bargaining unit. Gigante at all times respects the decision of its employees, whatever that decision ultimately turns out to be”.

Union officials insinuate that management’s unwillingness to come to grips with labour problems is linked to the fact that the chain has not expanded beyond its original three stores. According to Frias, “The pace of Gigante’s expansion in the US has been dictated by Gigante’s own internal planning and not by an external pressure from organised labour. After opening the first three stores, we felt the need to focus on developing the infrastructure that we will need to adequately support multiple stores. We spent the bulk of 2000 developing our infrastructure and initiating new-store projects which, God willing, will open in late 2001 and early 2002”.

Labour organisers have rallied supporters using the slogan “We are not in Mexico,” thus insinuating that management is intent on running things the Mexican way to the detriment of the local community. In response, Frias points out that “Gigante is not blindly attempting to apply to the US market the business model it developed for Mexico and the Mexican consumer. Like anyone else, we understand that the needs of our consumers in the US will necessarily vary from the needs of our consumers in Mexico.”

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It is difficult to say at this point how management and labour leaders will work out their differences. Clearly the UFCW is intent on unionising Gigante and will attempt to win over the rank and file. Given management’s position that it will not interfere with the decision of individual employees, the issue will ultimately be resolved based on whether employees feel that they stand to benefit from joining the UFCW.

By Steve Lewis, correspondent

To see an earlier story about this dispute, please click here.