Workers at the Snappy Air Distribution plant in Detroit Lakes were back on the job Friday, after agreeing to a new three-year contract.
The 79 workers belong to Sheet Metal Workers' Local No. 10, and went to work Monday morning to find that management had locked them out and planned to hire temporary replacement workers.
Snappy's is owned by Standex Air Distribution Products. Calls to the local office were referred to Jim Mettling at corporate headquarters in Salem, New Hampshire, who failed to return repeated phone messages left over several days.
Jerry Oswald of Frazee, who has worked at Snappy's for 39 years, said the lockout occurred after union members voted not to accept the company's final offer on a new three-year contract.
The three-year contract expired March 15.
Oswald said the company's offer would have been bad enough for the 79 workers still at the plant, but much worse for those who had been laid off and hope to be called back to work as the construction season picks up.
"Some of those people have been here 20 years," Oswald said.
There were about 280 workers at Snappy's during the height of the housing boom a few years ago, he said.
Senior workers at the plant make just under $18 an hour, he said.
But the plant has always been one of the most productive in the Standex family, and has always made money for the company -- lots of money during the boom times, Oswald said.
The company originally proposed a 10 percent wage cut for the 79 remaining workers, who would also had to pay about $100 a month more for health insurance, Oswald said.
Its next offer was a 5 percent wage cut the first year and a 3.5 percent cut the second year, along with the higher insurance costs.
That contract was rejected, in part because it would have also set up a two-tier wage system for workers called back from layoffs.
Snappy workers on Thursday held a contract vote and "it was accepted and ratified," said Ricky Englund, business representative for the union.
The workers accepted a pay cut of 3 percent the first year, 1 percent the second year and a return to their current wages in the third year.
But they had to accept the two-tier wage system in which recalled workers will be paid $14.50 per hour instead of $17.90 per hour.
Also under the contract, workers who were laid off will lose their place on the seniority list after one year, instead of the current two-year period.
"The company argued they were not competitive in the market at the labor rate today," Englund said. "They needed immediate financial relief."
Standex Corp., which owns Snappy's, reported a 32 percent profit margin in the second quarter of fiscal year 2010, according to the most recent SEC filing.
But sales were down considerably due to the recession, and the profits came largely because of large-scale layoffs and other cost-saving measures across the corporation's five divisions.
For the final six months of last year, the corporation reported net income of $7.1 million on net sales of $291 million .
Battered by a terrible market for new residential housing, the corporation's air distribution division lost $259,000 during that time period.