Cecil County Loses 192 Jobs; Outgunned by PG County, with State Aid, to Save 700 Jobs There

NEWS ANALYSIS

Cecil County will lose 192 jobs in March at the C&S Wholesale Grocers, Inc. distribution center in North East, catching local officials off-guard, while Prince George’s County fought aggressively and obtained state aid to save over 700 jobs with the same business that were facing elimination there. In essence, Cecil workers were tossed out of the game as part of the PG deal but officials there played an “A” game on the field while Elkton was resting in the dugout.

Cecil County did not learn of the local plant closing until a required notification was filed with the state on 1/20/2016—just one day before the Prince George’s county deal was announced at a ceremony in Annapolis. And senior Cecil County officials did not know that a $1.35 million incentive package, including Prince George’s County funds ($500,000) and state funds $(850,000), had been assembled to keep and even expand the PG jobs until Cecil Times advised them of it on Tuesday.

“I did not know that,” said Lisa Webb, Cecil County’s Director of Economic Development.

Webb also said that “We were really surprised” to receive the notification of the plant closing, since the county had been under the impression that some of the jobs from Prince George’s County could be transferred to the North East facility, which is located on Lums Road.

County Councilor Dan Schneckenburger (R-3), who serves as a Council representative to the Economic Development Commission and has been active for years with the Susquehanna Workforce Network initiative that seeks to place workers in local jobs, said SWN had held job fairs for the C&S operation as recently as a week before the plant closing announcement. He also was unaware of the state financial aid to save the PG jobs. (As of Tuesday, the C&S website listed no job openings at its North East facility and just one opening at its similar operation in Harford County, which is expected to remain open.)

“It really does hit us at a bad time,” Schneckenburger said. But he, and Webb, were hopeful that the North East workers will find jobs with other employers in the area. Schneckenburger said the SWN was geared up for a “rapid response” to work with the soon to be laid off staff to find other employment.

But while the Cecil County folks look for new jobs, their counterparts in PG county are guaranteed jobs, with no outsourcing of work to other facilities, until mid-2022, under terms of a complex deal negotiated among labor unions, C&S and the Safeway grocery chain, with intense county government involvement. Safeway had contracted with C&S to operate both the PG and North East facilities.

The North East workers are not unionized, according to Webb. Cecil County has often sought to attract business to the area by noting its largely non-union workforce.

Webb said that the North East facility “lost its contract with Safeway,” so “there was nothing to save.” Webb said that County Executive Tari Moore received the state-mandated plant closing notice on 1/20/2016 and contact C&S’s New Hampshire headquarters to discuss the matter.

But by then, the PG deal had already been struck and was formally announced, with county and state officials touting their success at a press conference in Annapolis, the next day.

In interviews with Cecil Times, PG county officials involved in the negotiations declined to elaborate when asked if the closing of the Cecil County operation factored into the discussions to save the jobs in that county. But key players in the talks were officials of the Teamsters union, which represented most of the workers there. (Since North East workers were not unionized, their fate would not be a factor for the union negotiators.)

“This is one of the most important saves” of jobs for Prince George’s county under the administration of County Executive Rushern L. Baker III, according to David S. Iannucci, who serves as deputy chief administrative officer for economic development in Baker’s office. The PG county executive has rolled out a number of pro-business initiatives to attract and retain jobs and “change the business climate” in the county, he added.

So “it was a very easy decision to put some money on the table” to seal the deal to save the jobs in PG, Iannucci said. The county will provide $500,000 and the state agreed to provide $850,000 in “conditional loans” that will not have to be repaid if all the terms of the deal are met. As part of the arrangement, one facility in Landover will be closed but the remaining site, in Upper Marlboro, will be expanded with “eight figure” expenditures for capital improvements. All 700 jobs will be located at the single site, plus hiring of another 25 workers or more is planned.

Key to the deal was agreement by the Teamsters to $42.5 million in labor concessions over five years, including wages and benefits, Iannucci said.

Scott Peterson, Baker’s press secretary, added that Safeway was a key player in the talks and agreed to take over operations of the facility, with workers now becoming Safeway employees rather than C&S staff. (Apparently with Safeway taking over direct operation in PG, it had no need for its contracted operation at the C&S site in Cecil County.)

After the proposed facility closings were first announced last October, PG officials worked aggressively to save the distribution center jobs, bringing all sides to the table to hammer out a deal and state officials were involved throughout the process. They also won a reprieve of layoff notices that were due to be sent to workers shortly before Christmas, in order to give the county and the involved parties more time to hammer out a deal.

The ongoing efforts in PG were periodically reported in local business publications so it was no secret, especially in economic development circles, that the county was pulling out all the stops to try to save the jobs. And with state economic development officials involved, it is unclear why Cecil County was so unaware that PG’s “save” could result in a local “loss.”

Cecil County has not been particularly high on the state government’s radar for attention or aid, despite the Hogan administration’s strong pro-business stance and the county’s overwhelming support for Larry Hogan for governor in the last election. A special package of road aid, drawn from urban areas’ mass transit funds, did not bring any new projects to Cecil last year. And a new initiative to create special economic development zones in Western Maryland and the Lower Eastern Shore bypassed Cecil County, which is considered the Upper Shore.

Still, better information gathering and sources in the newly re-named State Department of Commerce (formerly the Department of Business and Economic Development) should have tipped off local officials that the Cecil jobs could be sacrificed in the wake of the aggressive PG moves to save their own jobs. Indeed, several county officials recently posed for pictures with state Commerce Secretary Michael Gill at various events.

Purely by the numbers, saving 700 jobs in PG versus killing 192 jobs in Cecil County might seem an acceptable trade-off at the state-level. But for Cecil County, more vigilance is needed by county government to safeguard the jobs the county has as well as trying to attract new employers.