As union leaders seek an end to the bitter supermarket strike and lockout in California, they would like nothing more than to bargain with just one grocery executive: David Dillon.
Dillon is the relatively new chief executive of Kroger Co. Its Ralphs chain owns the most stores affected by the clash -- 300 -- compared with 259 Albertsons Inc. stores and 293 Safeway Inc. Vons and Pavilions stores. The three supermarket companies are bargaining as a single unit with the United Food and Commercial Workers union.
Unlike the CEOs of Safeway and Albertsons, Dillon has spent his whole career in the grocery business. Approachable and low-key, Dillon also stands in contrast to Safeway Chief Executive Steven Burd, whom the union sees taking the harshest stance in demanding concessions from the union on wages and benefits.
In fact, Dillon steers a company that, until now, had enjoyed perhaps the best relations with the UFCW.
"We'd love to sit down and negotiate with him directly" because the union "has always been able to work out our differences" with Kroger's management, said Rick Icaza, president of Local 770 in Los Angeles, one of seven UFCW locals involved in the strike and lockout, now in its 15th week.
It's highly unlikely Icaza will get a one-on-one with Dillon. Indeed, the length of the impasse and the three chains' solidarity suggest that Dillon, 52, is no less steadfast than Burd or Albertsons CEO Lawrence Johnston.
Dillon himself, in his first interview since the strike began, discounted the notion that he alone could break the logjam. He said Kroger was resolute in seeking concessions, though he embraced a softer tone than Burd.
"Strikes are not good; no one ever wins them," Dillon said by phone from Kroger's corporate headquarters in Cincinnati. "I don't like the impact that it's had on our employees or our customers or on our company for that matter."
At the same time, he noted that "issues like this don't get resolved unilaterally. Even if we were the only company involved in this, we couldn't just walk in and say, 'Here, it's solved.' "
To prosper against growing competition from Wal-Mart Stores Inc. and others expanding in the grocery business, he said, Kroger must keep prices low and can do that only by reducing costs.
"In Southern California, over the years we've gotten lulled into a false sense of security with the cost structure" negotiated with the UFCW, Dillon said. Now, more people are shopping at places "from Trader Joe's to Costco to Wal-Mart" stores that "don't have these kinds of embedded costs," he said.
Kroger's employees -- whom Dillon calls "associates" -- should keep getting "good wages, quality healthcare and a fair pension," he said. "Ralphs has always provided its associates with those three things and ... that will not change. For me, the keyword here is balance."
The union rejects outright the supermarkets' proposal that Dillon calls "good" and "fair." The UFCW contends that the stores' latest offer, among other things, would shift so much of the cost of healthcare to employees as to make it unaffordable, given that many grocery employees work part time and earn less than $30,000 a year. The union also is opposed to management's proposal for lower wages and benefits for new hires.
Dillon had been on the job less than four months when the union struck Vons and Pavilions on Oct. 11. The next morning, Kroger -- the nation's largest supermarket chain -- and Albertsons locked out their union workers in Southern and Central California. About 70,000 workers have been idled since then in what has become the longest supermarket strike in UFCW history.
Dillon declined to comment on the two sides' contract offers and the status of negotiations. No formal talks between the stores and the union are scheduled.
Although he hasn't been CEO for long, Dillon was Kroger's president for several years and held numerous other management posts.
He's the great-grandson of John Dillon, who founded the Dillons grocery chain in 1921 in Hutchinson, Kan., where the younger Dillon was born and raised. By the late 1970s, the business had evolved into Dillon Cos., with several other regional grocery chains under its umbrella.
David Dillon, after marrying his high school sweetheart and finishing college, joined the company in 1976; six years later it was acquired by Kroger. Dillon was named Kroger's executive vice president in 1990. Five years later he became Kroger's president, and last June he succeeded Joseph Pichler as CEO, a job that paid a salary of $1.3 million in 2002, according to the most recent figures available.
California is Kroger's biggest market, with more than 450 grocery stores, which account for about 18% of its supermarkets. Kroger, which also owns convenience stores, jewelry stores and food-processing plants, has annual sales of $52 billion.
