Santa Ana-based Gigante USA Inc. is nearing an agreement that could quell labor protests that have dogged the Mexican retailer’s U.S. expansion.
The U.S. arm of Mexico’s Grupo Gigante SA de CV and the United Food and Commercial Workers are close to an agreement to let the union conduct an organizing campaign at Gigante’s three Southland stores.
The Mexico City-based Gigante chain opened its first U.S. store in Pico Rivera in 1999 and two others since then. Gigante hopes to open some 20 U.S. stores in all, including one in Santa Ana, in a bid to attract the region’s growing Hispanic population.
A union agreement would remove what has become a major stumbling block toward the chain’s penetration of the second-largest Mexican market in the world outside of Mexico City.
Chris Leo, chief of staff for Assemblyman Lou Correa, D-Santa Ana, who has closely involved himself in the dispute, said the two sides are close to an accord.
“They are very close to resolving their issues,” Leo said. “The union and Gigante had to find a comfort level with each other before they could proceed with a resolution of this dispute. They had to figure out how to be married to each other. It was just a little rocky.”
Justo Frias, president of Gigante USA, declined to comment while his company is in talks with union officials.
Representatives from the grocery workers’ union also would not comment, saying they have pledged to refrain from public statements pending finalization of any accord.
A source familiar with the agreement characterized it as a generous one in which the company would agree to honor union cards signed by store workers and not demand a union election under the auspices of the National Labor Relations Board.
Should the union successfully organize the workers, the company would then accept the union as the bargaining agent and the two sides would start negotiation on a company-wide contract, the source said.
Grupo Gigante, which operates more than 200 supermarkets in Mexico and is the country’s third-largest retailer, is one of several, large Mexican companies that have ventured north of the border since passage of the North American Free Trade Agreement.
But union pickets and protests met the opening of Gigante’s Pico Rivera store for its use of non-union workers who were being paid below the prevailing union wage, now $9.78 to $17.10 for clerks. Since then, Gigante stores have opened only in Arleta and Covina. Observers say the labor trouble has been a setback.
“This is a super-competitive market,” said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp. “What you need to do to make any money is to get as many stores opened as soon as you can. The union campaign against them has not helped.”
Daniel Mitchell, a professor of management and public policy at the University of California, Los Angeles, said the campaign had the advantage of targeting a retailer, a type of business that is particularly sensitive to labor disruptions. n
Darmiento is a staff writer with the Los Angeles Business Journal.
