Mott's Demands Pay Cuts Despite $555M Profit

Labor Day 2010 finds a lot of American workers on the sidelines. The U.S. unemployment rate stands at 9.6 percent. There are five job seekers for every opening. And in many cases those who have jobs are being asked to take pay cuts even at healthy companies. CBS News correspondent Elaine Quijano reports on a case in point in Williamson N.Y.

For more than three months, Michelle Muoio has been picketing the plant where she's worked for 15 years - Mott's apple juice in western New York.

Three hundred union members are locked in a heated dispute, symbolizing a new shift in the power struggle between management and labor in America.

Companies typically ask for labor concessions when they're losing money. But Mott's parent company, Dr. Pepper-Snapple -is making record profits of more than half a billion dollars a year. Yet workers are being asked to take a $1.50-an-hour wage cut - and a pension freeze.

"We need a fair share," said Mike Leberth, president of RWDSU Local 220. "If you're making half a billion dollars in profit after all expenses, we should share in that."

The company argues that Mott's workers earn far more than their counterparts in the area - an average of $19 an hour versus an area average of $14.

"When there's a situation when you have wages and benefits out of line with the local market and industry norms, however difficult it may be, it's something we have an obligation to address," said Tina Barry, the company's senior vice president for corporate affairs.

The fact is unions are losing their leverage. Membership dropped 10 percent in 2009, the largest decline in more than 25 years.

Labor experts say, generally, the longer a strike drags on, the more likely it is the company will get its way. But these workers say they'll continue to hold out until the company comes up with a better offer.

Replacement workers arrive daily, doing the jobs union members used to do. The company says it has no plans to re-open talks.

Holding out is hard for Michelle Muoio and her son Jaden.

"He didn't have a birthday cake, you know?" Muoio said. "You give up things."

She realizes this could be a lost cause.

"I'll stand out here and fight with everybody until the end and then I'll move on," she said.

  • Ken Millstone

    Ken Millstone is an assignment editor at CBSNews.com