As Phar-Mor prepares to cut 181 jobs in downtown Youngstown, a union hopes for hundreds more jobs in Austintown.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
AUSTINTOWN -- Workers at the Tamco distribution center were to vote today on a proposed contract with a Minnesota drugstore company that is trying to buy the warehouse and 30 Phar-Mor stores.
If approved, the contract with Snyder's Drug Stores would be effective only if the company beats out other bidders in bankruptcy court proceedings.
Bob Bernat, secretary-treasurer of Teamsters Local 377, declined to discuss contract details before this afternoon's vote.
He said he began talking to Snyder's officials several weeks ago when they expressed an interest in buying the warehouse to use in supplying its 270-store operation.
Negotiations started in earnest last week after a hearing in U.S. Bankruptcy Court in Youngstown. Of the two bidders at the hearing, Snyder's was the only one who wanted to operate the warehouse and had the backing of Phar-Mor's unsecured creditors.
Phar-Mor will find out later today if any other bidders are interested. Today is the deadline for companies to bid on Phar-Mor assets.
The Youngstown-based discount drugstore chain is liquidating because of heavy losses. It will pick what it thinks is the best bid Tuesday, and Judge William Bodoh will be asked to approve the company's decision next Thursday.
Unless another company surfaces that wants Tamco, Bernat is backing Snyder's.
Bill White, Snyder's chief financial officer, said after a court hearing last week that employment likely would increase because Snyder's would be serving more stores from Tamco than Phar-Mor. Tamco is serving 73 Phar-Mor stores.
Tamco has 250 hourly workers, with about 100 recently laid off when Phar-Mor closed stores.
White said, however, that Snyder's wouldn't need Phar-Mor's headquarters, although some local administration might be kept.
Phar-Mor has notified Mayor George McKelvey that it intends to lay off 181 workers Tuesday.
Snyder's needs Phar-Mor's warehouse, however, because it uses independent contractors to receive merchandise and split apart orders for stores.
It has 160 company-owned stores and 30 Drug Emporium stores in the Midwest. It also supplies 80 independent retailers that use the Snyder's name. Adding 30 Phar-Mor stores would mean Tamco would supply 300 stores.
When Phar-Mor had 300 stores 10 years ago, Tamco had 1,200 employees.
"Was that necessary? I don't know. I'm not a merchandiser, but it should be close," Bernat said.
Snyder's bid $70 million for Tamco and 30 Phar-Mor stores. About $75 million more was to be derived from liquidation sales at 43 stores Snyder's doesn't want.
White declined to say which stores Snyder's is interested in but said Phar-Mor stores in Ohio and Pennsylvania are strong and well-liked by customers.
The other bid that has been made public came from liquidation companies in Chicago and Boston. They want to try to sell groups of Phar-Mor stores but would conduct liquidation sales if no one is interested.