Medtronic‘s CEO Omar Ishrak has advised Cretex, one of its suppliers, and the labor group striking the company, Local 563, to “negotiate in good faith.”
At the end of August, Local 563 asked Medtronic (MDT) to step in and stand up for workers’ retirement funds after Cretex slashed pensions. I asked whether Medtronic had a greater responsibility to these workers because they represented Minnesota–Medtronic’s home state. (For the details of the labor dispute, click here.)
Ishrak sent the letter below to Laborers Local 563 Business Manager Timothy Mackey. You’ll notice Ishrak writes Medtronic won’t interfere with internal labor disputes of other companies, such as Cretex, the supplier in question, but that he did advise Cretex to “negotiate in good faith” with its workers. Seems like a bit of a nudge back toward the table to me. (Link and emphases added.)
Dear Mr. Mackey:
I want to thank you for attending the recent Medtronic annual shareholder meeting, and for bringing to my attention Local 563’s labor dispute with Cretex Concrete Products. As I passed along at the time, I appreciate that your union has respected Medtronic’s property and employees through your engagement with out company.
I instructed my team to review the situation and assess if there was anything Medtronic could do in this regard. Our team looked at your correspondence, reviewed media accounts and publicly available materials regarding this situation, and spoke with Cretex representatives.
It is important to note that several Cretex companies supply us with integral components and products supporting our medical technology, which benefits patients around the world. These companies are not associated directly with Cretex Concrete. As a result, we will take no action that would interrupt our supply of these critical components and potentially delay our products to patients who need them.
In addition, and as I indicated at our shareholder meeting, Medtronic does not engage in internal labor disputes of other companies. We encourage both sides of the dispute to negotiate in good faith to resolve their differences. We have made this position known to Cretex Companies as well.
We appreciate the work of your Union members, and wish you the best in resolving this issue as soon as possible.
Sincerely,
Omar Ishrak
Chairman & Chief Executive Officer
cc: Lynn Schuler, President & CEO, Cretex Companies, Inc.
While this probably is less than the union hoped for (and conversely, more effort than Cretex probably hoped would be expended), Ishrak managed to show a classy response in a sticky situation. This situation put Medtronic between the proverbial rock (appearing to be anti-labor and anti-Minnesota) and the hard place (creating unwanted tension with a supplier). Ishrak managed to lead the company to nudge Cretex toward compromise and directly broach the situation with the strikers, keeping Medtronic above the fray.
But will it be enough to bend Cretex back toward striking a compromise with its striking employees?
