Rite Aid will shut down its distribution center in Poca —which currently employs about 250 people — after a breakdown in contract negotiations with the local union, the company confirmed on Sunday.
The distribution center will remain open for two years, closing down in 2016.
“This was a difficult decision to make, but a necessary one as Rite Aid continues to focus on improving operating efficiency in every area of the company, including our DC [distribution center] network. The capital required to upgrade and modernize this 35-year-old facility is cost prohibitive,” Ashley Flower, a Rite Aid spokeswoman said on Sunday. “Rite Aid will continue to work on ways to further optimize our DC network and to explore alternative service options to meet that goal. We will work diligently to provide our associates with the necessary information they need as the company works through this process.”
Flower added that the company would continue to bargain with the union.
More than 150 members of Teamsters Local 175, which represents the workers, met in their union hall in South Charleston on Sunday to discuss the company’s decision to close the warehouse.
Ken Hall, president of Local 175, said negotiations broke down on Thursday and Friday when the company was unreceptive to the union’s proposals to improve productivity.
“We told them we could improve productivity by 20 to 30 percent,” Hall said during the meeting. “But I think they have intentionally decided to run this place into the ground.”
The Poca warehouse serves 64 stores in the area. Rite Aid currently operates 104 stores in West Virginia. Nationally, the chain of pharmacies has 4,623 stores in 31 states.
Hall said, “I am furious. You [Rite Aid] led them to believe that if we did the right thing, the warehouse would remain open. I want to make sure everybody understands what this company is about.”
Teamsters Local 175 and Rite Aid have been in contract negotiations about the Poca plant since October of 2013.
Last December, Local 175 members rejected the company’s contract offer by a vote of 182-5, but decided not to go on strike and promised to continue negotiating.
During recent negotiations, Rite Aid complained about absenteeism, productivity, and health insurance costs, a Teamsters press release said.
“The members were willing to address all these issues which would result in improved productivity and substantial savings to the company,” the union wrote, “However, once the company learned the union was willing to address these issues, it made the announcement of the closure. This announcement came during the final day of negotiations” on Friday.
The Local 175 news release said Rite Aid believes the current warehouse in Poca is outdated.
Hall said Local 175 officials have been working with state government officials, including Gov. Earl Ray Tomblin, to find a new facility.
During the Sunday afternoon meeting, Hall said Rite Aid was willing to negotiate a new two-year contract, but only if it includes a provision saying the warehouse would close in two years.
Signing that contract, Hall said, would make it legally impossible for Rite Aid workers to effectively protest the closure.
During the meeting, Hall and local union members indicated they have no intention to go on strike.
“But there is nothing to prevent you from standing by the road holding up a sign that says, ‘Save Our Jobs,’ ” Hall said.
“These employees have stuck with this company during its lean years,” Hall said, noting that the company’s stock price has rebounded to more than $7 after falling to a low of 28 cents in 2009. “Now that Rite Aid is starting to turn around, it wants to throw the employees out with the trash.”
Last year, Rite Aid employed about 89,000 people and made revenues of $25.4 billion. Drug sales were about two-thirds of all the company’s sales.
Reach Paul J. Nyden at email@example.com or 304-348-5164.