Aventine negotiates with union in Pekin, Ill.

By Holly Jessen | October 14, 2010
Posted Oct. 21, 2010

If Aventine Renewable Energy Inc. and its unionized employees can't reach an agreement by Nov. 21, work may stop at the 160 MMgy Aventine ethanol plant in Pekin, Ill. The company has been in negotiations for a collective bargaining agreement with the union for the last several weeks and recently entered into a three-week extension, according to an Oct. 19 U.S. Securities Exchange Commission filing.

The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industry and Service Workers International Union represents Aventine's hourly employees at the Pekin plant, about 44 percent of the company's total employees. The company's collective bargaining agreement with the union was scheduled to expire Oct. 31. On Oct. 12, the union voted no to Aventine's "last, best and final offer for a new contract," the SEC filing said.

After that, the company and the union entered into a three-week extension through Nov. 21 for further negotiations. The company's previous last offer is still on the table for consideration through Oct. 30. "The company cannot guarantee that the parties will reach an agreement by the Nov. 21 date, or at all, or agree to terms which the company finds acceptable," the SEC filing said, adding that a strike or work stoppage could happen.

Aventine and the union will go back to the bargaining table on Monday, said Bob White, union staff representative for District 7, which includes Pekin. The hope is that the two sides can find middle ground. "I think both sides would like to resolve it without a strike, but if it comes to that it comes to that," he told EPM.

The current contract was already extended for one year, White said. The company came to the union when it was in bankruptcy but still operating the plant and asked for the extension in hopes that conditions would be more favorable when it was time to start negotiations. This spring, Aventine emerged from bankruptcy.

The main dispute between Aventine and the union is more money for the more than 100 hourly workers at the Pekin plant, he said. The company has been investing money into its two 113 MMgy plants in Aurora, Neb., and Mount Vernon, Ind., where construction resumed this spring. In August it also purchased the 38 MMgy Riverland Biofuels plant Canton, Ill.which is still idle. In addition, the union says while the company was still in bankruptcy, it paid out bonuses to its executives. "And yet, they can't find the money for the employees that are putting the product out right now," White said.

An industry representative said, overall, it's not common for ethanol plants employees to unionize and that wet mills are more likely to unionize than dry mill ethanol plants. Another representative said it depends on the state in which the plant is located. Some states have robust collective bargaining laws while others are right-to-work states. Valero Renewable Fuels ethanol plant employees, for example, are not unionized. Valero is the third largest ethanol producer in the U.S., with 10 plants in seven states.