Citing financial difficulties throughout its franchises nationwide, K-Mart announced that it is closing its distribution center on West Side Avenue in North Bergen. The facility will shut its doors for good on Jan. 15, meaning that more than 500 people will have lost their jobs for the holidays.
According to Christine Kerber, the manager/secretary for UNITE (Union for Needletrades, Industrial and Textile Employees) Local 99, at the present time only 75 of the union’s members remain working at the North Bergen location.
K-Mart has also announced plans to close a similar distribution center in Carson City, Calif., while downsizing plants in Atlanta and Ohio.
"The building will completely shut down by Feb. 1," Kerber said. "They’ve decided to downsize their short-line distribution centers."
The closing of the distribution center will have no effect on the K-Mart store that is located in the shopping plaza on Tonnelle Avenue and 74th Street in North Bergen.
Kerber said that most of the workers at the North Bergen distribution center received word that the center was being shut back in September, but that still doesn’t lessen the blow of losing their jobs for the holiday season.
"A lot of the employees are Latinos who have worked at the site for a long time," Kerber said. "They are older people in their 50s, which is going to make it more difficult for them to find another job."
K-Mart officials said that they have presented the employees with a fair severance package.
"But so many people have lost their jobs," Kerber said. "Who wants a severance? People need jobs and there aren’t many jobs out there for these people."
K-Mart spokesperson John Ferry said that the national discount shopping chain is offering one week of severance pay for each year served. Local 99 of UNITE will insure that the employees will continue to receive health benefits for up to six months, thanks to VEBA (Voluntary Employee Beneficiary Association), which has maintained a fund solely for those who lose their jobs.
However, there has been no official agreement on a severance package, which means that the out-of-work employees have yet to receive a dime, other than unemployment.
"Discussions are ongoing with K-Mart representatives," Kerber said. "We have filed for arbitration and we are hopeful that we can resolve this matter sometime this week. But I have a feeling that no one will receive anything until Feb. 1, when the new fiscal quarter begins."
Ferry said that K-Mart stands to lose approximately $200 million in projected retail sales, since the terrorist attacks on Sept. 11. The chain has been cutting back in employees in several different areas, but the biggest area has been in the distribution centers.
"We understand that K-Mart is going through financial troubles," said Kerber, whose union local represents 3,000 workers. "And we’ve always had a strong relationship with K-Mart. I know that these closings are a reflection of K-Mart’s business all over the country. There have been so many cancelled orders for retail stores. Sept. 11 has had such a devastating residual effect on the retail industry."
Added Kerber, "But we have people who have to be protected, for their years of dedication and service."
Kerber said that approximately 150 union workers lost their jobs recently when household good shopping chain Lechter’s went bankrupt, as well as 100 workers with the clothing line Kasper’s.
Kerber said that many of the older workers with more than 20 years of service were offered a buyout package last June as an effort to cut down on costs. Nearly 70 workers at the North Bergen facility took the buyout.
"We had several people take advantage of the buyout package," Kerber said. "This freed up K-Mart to hire new employees at lower salaries. We were hopeful that this move would give K-Mart the opportunity to stay open and help with its financial troubles, but K-Mart said it wasn’t enough and had to close anyway."
Kerber said that UNITE Local 99 has received the support of Sen. Robert Torricelli and Rep. Robert Menendez, in order to get approval from the Internal Revenue Service in terms of the severance buyout funds. But the approval from the IRS, nor the legislators, can speed up the process.
"No one has received their severance yet," Kerber said. "Right now, the workers are supposed to be available if they’re called to work. But that’s not going to happen. You can imagine how these people feel. They will eventually get paid, but the question is when. I can’t answer it and I have no date as to when."
Ferry said that he believed that the negotiations were moving forward.
"We offered a very fair severance package," Ferry said. "It’s unfortunate that the timing of the closing is so poor, but we’re trying to help our employees as much as possible. We’re in tough financial times all around."
Some of the workers have no idea where they will go. Shirley Clark is a 56-year-old woman from Jersey City who has worked in the quality assurance department for the last 27 years. It’s been a very tough time for Clark, who lost two sisters in the World Trade Center tragedy.
"I can’t believe they’re going to throw us all out, just like that," Clark said. "It’s sad. We’re coming up to Christmas and no one has received their severance. I was really depending on it to see us through. This is a very bad situation."
Another worker, Luis Matos of North Bergen, said that he doesn’t know how he will find another job.
"There’s nothing out there for someone like me," said Matos, who is 55 years old and has worked at the site for the last 20 years. "I have a wife and three children, two in college. This is not going to be easy for any of us. But we’ll try to survive."
"I really don’t know what to tell our members," Kerber said. "We’re trying to help them as much as possible."