The nation’s largest retail co-operative heralded the Christmas season by firing about 25 head-office employees, including four out of the five senior vice-presidents.
In early December, the board of Calgary Co-operative Association Limited “dehired” the company’s chief financial officer, the vice-president of people and organizational development, the vice-president of marketing and the vice-president of operations.
“A company doesn’t do that in December, the biggest month of the year in the retail business, unless they are in serious trouble,” said Calgary retail consultant Philip Jones.
Calgary Co-op’s chair and acting chief executive officer, Alice Brown, could not be reached for comment. Acting chief operating officer Ken Hart refused to comment.
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The Christmas trimmings follow the forced resignation of chief executive officer Gene Syvenky in October. Syvenky resigned shortly after an organizational review conducted by Ernst & Young was submitted to the co-op’s board of directors.
“There’s no doubt he resigned under pressure,” said Jones. “Obviously that report was severely critical of the senior executive’s performance. It led to the immediate departure of the chief executive officer.”
Jones said the nature and extent of the co-op’s problem is unknown because of the company’s long-standing policy of “obsessive secrecy.”
But Bruno Friesen, past-chair of the board, said he knows what is behind the recent dismissals. The Union of Calgary Co-operative Employees has taken control of the company and is purging it of its senior management, said Friesen.
“They were able to get people who were sympathetic to the union elected to the board. They now have a majority on the board, so now the union calls the shots, effectively, on what the board does.”
Union president Pat Rose chuckled at that assertion.
“Boy, it would be wonderful if we had that much power.”
Friesen said the union took over the board of directors by stacking the last two annual meetings with unionized workers, who were able to vote their candidates onto the board. Each February three of the co-op’s nine-member board of directors are elected to three-year terms. In the last two years the union was able to elect six union supporters to the board.
“The union has been able to effectively control the meetings and elect their slate to the board,” said Friesen, who lost by 25 votes at the February 1997 meeting.
Rose said it’s true all six candidates who have won in the last two years were endorsed by the union, but the union didn’t solicit these people to run on its behalf. The union leaders looked over the biographies and platforms and chose the candidates they wanted to support.
“It’s nothing like the union stacking the board with its own candidates who are all rabid union sympathizers,” said Rose.
She said the animosity between union and management stems back to when Syvenky was hired as CEO about five years ago. Shortly after that the organization began “union busting,” she said.
Friesen and Jones think it had more to do with wage rollbacks that were instituted during the Calgary Co-op/Safeway price war of about five years ago. They also believe the co-op’s current labor costs are a big source of concern.
“For whose benefit is this organization now being run, I think is the big question one has to ask,” said Friesen.
Jones concurs: “The decisions (the board) has made have been to the short-term benefit of the employees at the expense of the long-term viability of the company.”
Rose said the problem with labor costs is that there are too many supervisors and managers overseeing those who do the work.
Rose said she is pleased with the management “house-cleaning” that has occurred and believes more will come.
For the time being, Calgary Co-op is being run by a team of about 12 executives imported from Saskatoon’s Federated Co-operatives Ltd., said Jones. This interim management team could be in place for four to six months.
