Inefficiencies Characterize New Product Delivery System
WASHINGTON, April 20 /PRNewswire-USNewswire/ -- A delegation of Teamster workers and representatives will attend the Coca-Cola Company (NYSE: KO) and Coca-Cola Enterprises (NYSE: CCE) Annual Meetings of Shareowners in Georgia this week to raise concerns about mismanagement throughout the Coca-Cola system that threatens to destroy good jobs, undermine workers' rights, and create large-scale inefficiencies in its product distribution system. These ill-conceived changes could provoke work stoppages and service disruptions across the country.
In February, the Coca-Cola Company announced plans to acquire the North American operations of its largest bottler, CCE, which will significantly shift the company's revenue base to the North American market where sales for carbonated beverages continue to be sluggish. The proposed acquisition will create other challenges for management. For example, the bottling operations historically have narrower margins than Coke's current business. And the company has no time to spare as its main competitor, PepsiCo (NYSE: PEP), completed its acquisition of its two largest North American bottlers in February this year -- giving it a significant head start in integrating its business operations.
During ongoing contract negotiations with Southern California bottling and distribution workers, CCE proposed plans to experiment with the way products are delivered to retailers --using 7-Eleven as a test case. The proposed system would introduce third- and fourth-party companies into the distribution process, complicating Coke's current direct delivery to stores. The plan will also eliminate Coke's front line workers from servicing retailers, thus requiring understaffed stores like 7-Eleven to handle all product placement, rotation and displays.
"Given the enormity of the task at hand for Coke's management and its board of directors, it is shocking that they would allow major and inefficient changes to the distribution system of their products," said David Laughton, Director of the Teamsters Brewery & Soft Drink Workers' Conference. "The proposed changes, which could provoke widespread work stoppages in key markets across the country, will only serve to destroy jobs, damage customer relations, and put shareholder value at risk."
As Coca-Cola seeks to integrate CCE's North American operations, it will become a more labor-intensive business, making good labor relations with employees more important. CCE bottling and distribution workers in Atlanta, Ga. seeking Teamster representation will attend the shareholder meetings to protest the aggressive retaliation they have encountered from management.
"Management should be focused on the serious operational challenges ahead, not on intimidating workers and undermining their legal right to join a union," Laughton added.
The International Brotherhood of Teamsters represents 1.4 million hard-working men and women throughout North American including about 15,000 employees involved in the production and distribution of Coca-Cola products.
SOURCE International Brotherhood of Teamsters