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Both national and international labor organizations are beginning to critically examine current trade union structures and determine how they can best reorganize structurally, strategically, and tactically in order to meet the challenges of globalization. This case study will show how the IBT and the FIET developed a worldwide company council in attempt to gain recognition and basic labor and bargaining rights for all Royal Ahold NV. While an important first step for trade unions, trade unions must be cognizant of both the benefits and limitations of the emerging structures and tactics.
Index Terms: Collective bargaining, Coordinated bargaining/Collective bargaining, Trucking/Teamsters Union (IBT)/Trucking Industry/Union organization, International.
In 1995, the International Brotherhood of Teamsters (IBT) launched an international strategic campaign against Royal Ahold NV, an international leader in the retail grocery industry. The strategic campaign was a response to Ahold's restructuring activities and its implementation of new technology and distribution/transportation systems (cross-docking) at new regional distribution centers in the United States. These changes threatened thousands of vendor delivery and warehouse jobs under the IBT's traditional union jurisdiction. The strategic campaign enlisted the support of international labor, researchers, and environmental, religious, and community groups. This resulted in one of the first attempts in recent years by an international trade secretariat, the International Federation of Commercial, Clerical, Professional and Technical Employees (FIET), to gain recognition and basic labor and bargaining rights for all Ahold's employees.
Using a case study method, this paper will explore Ahold's global restructuring and use of cross-docking; the organizational techniques used by the IBT in building a strategic campaign; and the involvement of FIET and its Ahold World Council.
It will conclude with a discussion of the limitations and benefits of global bargaining.
Ahold NV and the Impact of Cross-Docking on IBT Local 264 (Buffalo)
Like other unions dealing with transnational corporations, the IBT was faced with difficult issues relating to corporate organizational structure and the introduction of lean production systems in fashioning a response to Ahold's restructuring efforts. Ahold is a holding company with subsidiaries, which owned, franchised and operated retail stores, pharmacies and liquor stores in United States, Europe, Asia, and Latin America. While the largest grocer retailer in the Netherlands, the Dutch-based Ahold had become the third largest US retail grocer through aggressive mergers and acquisitions. (Ahold, 1997)
In 1997, Ahold had sales of NLG 50.9 billion (a 37.7 percent yearly increase), operated 3,000 supermarkets, hypermarkets, or specialty stores with over 200,000 employees, and serviced more than twenty million customers weekly. As a leading international food retailer, Ahold maintains strong market positions in The Netherlands (sales NLG 15.9 billion) and southern and central Europe (sales NLG 3.2 billion in Portugal, Spain, Poland, and Czech Republic). In recent years, Ahold has established a strong presence in emerging markets through joint ventures in South America (sales NLG 2.6 billion) in Brazil, Argentina, Chile, Peru, Paraguay and Ecuador and in the Asia-Pacific Rim where it is the number one foreign food retailer in China. In the United States, Ahold's four supermarket chains contributed almost half of its total world sales, and it is the largest grocer on the eastern seaboard with over 80,000 employees. (Ahold, 1998a,b)
As a transnational corporation, Ahold operated within diverse economic and social environments. Of importance here, these varied environments have vastly different national labor laws and social standards for corporations. Ahold's corporate policy has been that each subsidiary could largely operate independently of the parent organization and consistent with legal and social environment in the host country.
The growth and success of Ahold was, in part, the result of its ability to adapt the lean production system to the grocery industry. Specifically, Ahold had pioneered in the Netherlands the application of the just-in-time distribution system for its 1500 store Albert Heijn chain. Using the latest bar code and information processing technology and working closely with suppliers, Ahold developed a custom-made palletized distribution system that minimized the warehousing of products at the distribution centers or retail stores. This system is called, cross-docking, and involves the application of "just-in-time" delivery practices to wholesaling and retailing in the grocery industry. Under cross-docking, retail-warehouse-vendor delivery systems are coordinated through an integrated computer network linked to a highly automated mega-warehouse to which products are delivered and then, almost immediately, shipped to retailers. The introduction of cross-docking reduced warehouse costs and freed retail store space fo r sales. Further, vendor deliveries that are made directly to warehouses dramatically reducing the need for drivers making direct store deliveries. The IBT estimated direct store deliveries would be reduced from forty daily deliveries to two. (IBT Research Department, 1995)
In 1995, IBT Local 264 in Buffalo, New York contacted IBT's Office of Strategic Campaigns when Tops Markets, a subsidiary of Ahold, announced that it would build a thirty-acre, state-of-the-art distribution center in a rural area outside Buffalo. Local 264 represents grocery vendor drivers (non-Ahold employees delivering beer, soda, bakery and diary products) throughout the Buffalo area. Given the potential job losses associated with cross-docking, Local 264 leadership …