PHAR-MOR Snyder's to keep 6 stores running
Tamco workers needed only 45 minutes to unanimously accept the contract proposal from Snyder's.
By DON SHILLING
and SHERRI L. SHAULIS
VINDICATOR STAFF WRITERS
YOUNGSTOWN -- Snyder's Drug Stores intends to operate six of the eight area Phar-Mor stores and move some corporate workers to this area from Minnesota if it acquires the chain, local officials say.
Snyder's executives explained their intentions recently to Youngstown Mayor George McKelvey and Anthony Cafaro Sr., president of the Cafaro Co., landlord for the Niles Phar-Mor, in a meeting at the Snyder's corporate offices in Minnetonka, Minn.
McKelvey said he pushed the executives to keep open the Phar-Mor store on Market Street, which they agreed to do. He said cuts are inevitable at Phar-Mor's downtown headquarters.
Cafaro said in a letter to Judge William Bodoh of U.S. Bankruptcy Court, however, that Snyder's intends to add other hourly and salaried jobs in this area.
McKelvey and Cafaro are supporting the Snyder's bid because they see it as the best bet to retain local jobs as Phar-Mor liquidates the company.
Cafaro said Snyder's executives intend to relocate some Phar-Mor workers from the downtown headquarters to office space next to Phar-Mor's Tamco distribution center in Austintown.
These workers would primarily be from accounts payable and computer information departments, he said.
Also, Snyder's also intends to move an undetermined number of people from its Minneapolis-based accounts payable department to this area, making this the central office for that function, Cafaro said.
Letter from Snyder's
Gordon Barker, Snyder's president, could not be reached to comment, but he released a letter Thursday that confirms some of what McKelvey and Cafaro reported.
Barker said the company intends to offer jobs to some of the 181 workers at Phar-Mor headquarters. He wasn't specific, but said there are certain company functions that would operate well from the Youngstown area.
He said Snyder's doesn't plan to acquire Phar-Mor's headquarters but it's possible the company could have some operations there.
Phar-Mor has notified employees at the headquarters that they could lose their jobs Tuesday.
John Ficarro, Phar-Mor senior vice president, said the notification was a precaution done to comply with federal law. The company won't know how employees will be affected until an auction of company assets is completed.
Barker said Snyder's wants to keep at least 30 of Phar-Mor's 73 stores, but he didn't discuss specific stores.
He said Snyder's plans to add hourly staff to Tamco, which has about 250 hourly workers and 100 on recent layoffs.
When Phar-Mor had 300 stores 10 years ago, Tamco had 1,200 workers.
Snyder's will use Tamco because it wants a central warehouse. It now uses independent contractors to split up goods and ship them to stores.
With the Phar-Mor stores, Snyder's would be supplying about 300 stores from Tamco, including company-owned stores, its Drug Emporium stores and independent retailers who use the Snyder's name.
About 250 members of Tamco's Teamsters Local 377 unanimously agreed to accept the proposed contract from Snyder's, which would extend the current contract two years and guarantee wage increases of 4 percent annually.
It took only 45 minutes Thursday for the workers to agree that Snyder's would be their best bet, said Bob Bernat, the union's secretary-treasurer.
"Snyder's is the only company that came to us and said, 'We want to work to keep stores open. We want to work to keep this facility and we want to honor your contract,'" he said.
The vote could be meaningless, however, if the Snyder's bid is not accepted.
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.
If the bid is accepted, there could be some layoffs at Tamco in the beginning, Bernat said, but he added that Snyder's officials informed him they are dedicated to not only bringing those workers back as soon as possible, but also bringing in new jobs.
"Pray for us. Snyder's may be our only chance," Denny McCartney said as he left the meeting hall after the vote.
The Youngstown resident, who has worked for Tamco for 14 years, said voting to accept the contract offer was a "no-brainer."
"When Snyder's took over Drug Emporium in Columbus, that really told us something," he said. "This is a company that really wants to work with us and that left no doubt in my mind."
Snyder's is one of an undisclosed number of companies vying to acquire Phar-Mor, which has been operating under bankruptcy court protection since September but now is preparing to close operations.
Companies had until Thursday to place bids on Phar-Mor assets.
Ficarro said several companies bid but declined to reveal them. The bids are for differing numbers of stores, but no one is proposing to operate the entire company.
"I'm hoping we can save as much employment as possible," he said.
Bernat said no other companies have approached the union about continuing workers' employment at Tamco, or discussing their contract.
"Anybody who gets this bid, though, is going to get a call from us," he said.
Phar-Mor will conduct a private auction Tuesday with the bidders and then ask Judge William Bodoh of U.S. Bankruptcy Court in Youngstown to approve its selection Thursday.
Local officials are supporting Snyder's because the only other bid that has been made public came from two liquidation companies. They said they would try to sell Phar-Mor stores in groups but didn't intend to operate any stores or Tamco.