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United Grocers backtracks on move

United Grocers is reconsidering the decision to close its Medford warehouse.

More than 200 Rogue Valley jobs and a $15 million payroll hinge on thedecision by the Portland-based grocery wholesaler.

Chuck Carlbom, acting chief executive, met with workers Thursday morning.Workers at the meeting said he told them the management is preparing newfeasibility studies.

He was saying the current management believes the information inthe studies was flawed, said Steve Evans, one of the workers at Thursday'smeeting. In his opinion, the decision to move was made prior to thesimulations.

He said they are looking at three things: if it's a financiallygood decision, community interest, and service to stores in our area.

Jim Schuh, Medford warehouse manager, said the study will take 30 to60 days.

In prior studies, we were looking at reasons to close Medford,he said. Now we're looking for reasons to keep it open. It was obviouslyreceived very well by the crew.

The Medford closure, if warranted, was moved from October to February,according to a release from the company, which said there has beena considerable change in the variables driving the closure.

Alan Jones retired as president of United Grocers at the end of May aftercompany experienced a series of setbacks, according to directors and workers.

The decision to close the Medford facility was triggered by United Grocers'acquisition of Market Wholesale in 1995. That company had warehouses atSanta Rosa, Tracy, and Modesto, Calif.

United Grocers planned to consolidate operations in Portland and Tracy.

Complications in consolidating facilities in California to replace Medfordand in linking computer systems have cost the company $2.4 million in thefirst quarter and delayed the move.

Carlbom, who recently retired as president of Western Family Food, tookover as head of the United Grocers management group after Jones steppedout.

Meanwhile, another large cooperative, Associated Grocers of Seattle,and United Grocers are still considering a merger.

Carlbom said he expects that to go through, but that it doesn't affectMedford operations, Evans said.

However, about 30 percent of Medford's volume will be transferred toCalifornia in August, Evans said.

He (Carlbom) said there is a good chance we will regain the areasfrom Sutherlin south that we used to serve, Evans added.

Reports filed with the Securities and Exchange Commission show the company'snet income has dropped from $2.7 million in 1992 to $152,312 in 1996. Becauseit didn't meet financial performance standards, the company defaulted onnotes held by several lenders.

The company said operating losses wiped out funds destined for a severancepackage for workers leaving the company.

The Medford warehouse, at 2195 Sage Road, includes 250,000 square feetof storage. United Grocers has put the warehouse and 20 acres of land onthe market with an asking price of $5.6 million.

Associated and United Grocers are both among the nation's 10 largestretailer-owned cooperatives. United Grocers is slightly larger, with annualsales of some $1.3 billion and more than 2,000 employees. The company has1,600 workers in the Portland area and has had up to 350 in Medford.

The companies initiated a 90-day evaluation of the merger about two monthsago.