WINNIPEG – Agricore’s chief executive officer didn’t want to talk about just his own company when he spoke to delegates attending the company’s annual meeting last week.
Gordon Cummings also used the opportunity to compare Agricore with its competitors. And the comparison wasn’t flattering to one company in particular.
He told delegates that a major reason Agricore has adopted a hard line in its negotiations with striking Grain Services Union members is that it doesn’t want to end up like Saskatchewan Wheat Pool.
Agricore wants to eliminate seniority and bumping rights from its collective agreement.
Read Also
Interest in biological crop inputs continues to grow
It was only a few years ago that interest in alternative methods such as biologicals to boost a crop’s nutrient…
Sask Pool is the only other grain company with seniority and bumping rights and, according to Cummings, that spells trouble for the pool.
“Only Sask Pool has that, and I would not hold out the Sask Pool model of the way of running a business as the model that anyone would want to follow or is good for farmers,” he told delegates.
Sask Pool chief executive officer Bill Hunt rejected suggestions that the pool’s labor contracts have had a negative impact on the company’s competitiveness or market share.
“That’s simply not right,” he said in a telephone interview from the company’s head office in Regina.
Any business problems the pool experienced in 1998-99 were due to such things as the drop in grain exports, the company’s large share of Canadian Wheat Board grains, the entrance of new companies, rail car allocation rules that favor new shippers, and elevator closures, he said, not labor contracts.
Cummings said Agricore has seen first-hand the “considerable problems” faced by its rival as it has begun opening grain elevators and farm supply centres in Saskatchewan and started competing head-to-head against Sask Pool.
He told reporters that because of its “restrictive” labor contracts with the GSU, the pool has been losing market share and is having trouble being competitive.
“The only competitor in Saskatchewan who has constraints regarding promoting people is Sask Pool and I don’t think that’s an ideal position to be in,” he told reporters after his speech. “Everyone else operating in Saskatchewan can put the person in who’s going to get along with farmers and understand farmers’ needs.”
Hunt acknowledged that the pool’s union contracts impose certain “disciplines” in hiring.
“But having said that, if you’re using modern, progressive and fair employee-management tools and techniques, then seniority is not a major factor in getting the right people in the right job,” he said.
He added Sask Pool has competed against non-unionized companies for decades and has always had strong market share, high levels of service and good customer retention.
Cummings also told delegates said that while Agricore had a disappointing financial year in 1998-99, it actually fared well last year compared with its main competitors.
Its return on assets of 6.5 percent was better than United Grain Growers at 6.4 percent and Sask Pool at 4.9 percent.
Its total operating earnings of $13.2 million were better than United Grain Growers’s $8.1 million and Sask Pool’s loss of $21.4 million.
In grain handling, Agricore earned $32 million, while UGG earned $14.2 million and Sask Pool lost $5.9 million.
Total sales were $3.6 billion for Sask Pool, $3.1 billion for Agricore and $1.8 billion for UGG.
“You can argue whether UGG or us did better,” he said. “We probably did about the same, but clearly Sask Pool did worse than either of us.”
He also said Agricore handled slightly more of the six principal grains and oilseeds than Sask Pool did last crop year, making it number one in terms of both farm supply sales and grain handling.
Some Western Producer staff, including the writer, are members of a separate local of the Grain Services Union.
