US Kellogg employees strike as contract negotiations fail

About 1,400 Kellogg Co cereal plant employees have gone on a strike in an effort to get the packaged foods maker to negotiate what a labour union called a “fair contract” for the workers.

The Froot Loops cereal maker has been negotiating the payment and benefits terms for a while now of a new contract – the existing one expired at midnight on Monday – with union workers who went on strike on Tuesday.

Kellogg has demanded that workers give up quality healthcare, retirement benefits, and holiday and vacation pay, said Anthony Shelton, the president of Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.

Shelton said Kellogg has threatened to send additional jobs to Mexico if workers do not accept its proposals.

However, Kellogg, which brings in about a third of its sales from cereals, said its compensation and benefits for US cereal plant employees were among the industry’s best.

“We are disappointed by the union’s decision to strike … our offer includes increases to pay and benefits for our employees,” Kellogg spokeswoman Kris Bahner said.

The average 2020 earnings of union workers was $120,000, the company said in an emailed statement, the Bloomberg news agency reported.

Kevin Bradshaw, a local union vice president in Memphis who has worked at Kellogg for more than 20 years, said that base pay at his plant is roughly $58,000 a year, but last year’s figure was inflated by pandemic-driven overtime.

“We worked seven days a week, 12 to 16 hours a day,” Bradshaw said.

Shares of Kellogg fell 0.8 percent to $64.02 at the close of trading, erasing a gain earlier in the day. This year, the stock has advanced 2.9 percent, short of the S&P 500’s 16 percent rise.

Labour shortage

The company also said it was implementing contingency plans to deal with supply disruptions, including internal and third-party resources.

The workers went on strikes at plants in Battle Creek, Michigan, Omaha, Nebraska, Lancaster, Pennsylvania and Memphis, Tennessee.

The union used what looked like an angry version of Kellogg’s Frosted Flakes mascot, Tony the Tiger, in posters asking people to join the picket. Pictures on social media showed several workers holding banners outside the facilities.

“The company has a pretty good idea on how long they are willing to hold out and we are going to stand fast as long as we have to,” said Daniel Osborn, the president of the local union in Omaha, noting the strike had gone on for 18 hours already.

The strike shows how US workers are pressing for better pay as a labour shortage and unprecedented supply-chain bottlenecks force companies to hike prices and make deep operational changes. Employees at essential plants, like those run by packaged-food companies, have faced difficult conditions since the start of the COVID-19 pandemic.

Last month, Nabisco workers in five states ratified a new labour contract following a strike that had slowed production of Oreo cookies and Triscuit crackers.