Kellogg workers the latest to down tools over COVID-led compensation issues

06-Oct-2021 - Last updated on 06-Oct-2021 at 11:38 GMT

Workers from all of Kellogg's US cereal plants have gone on strike. Pic: Kellogg Company

Less than a month after resolving a dispute with Nabisco parent company Mondelez over employee contracts, the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union (BCTWGM) is facing another impasse over workers compensation – this time with Kellogg Company.

The union and the Battle Creek-based cereal giant have reportedly been debating an assortment of issues such as the loss of premium health care, holiday and vacation pay and reduced retirement benefits, for more than a year.

In a statement, Anthony Shelton, president of BCTWGM, said Kellogg is threatening “to send additional jobs to Mexico if workers do not accept outrageous proposals that take away protections that workers have had for decades.”

Around 1,400 plant workers have shown their displeasure to this ‘threat’ by going on strike, causing work to stop at all of Kellogg’s US cereal plants and the company’s shares to slip. Shares of Kellogg fell 0.8% to $64.02 at the close of trading on Tuesday (5 October), erasing a gain earlier in the day.

The plants in Omaha, Nebraska; Battle Creek, Michigan; Lancaster, Pennsylvania; and Memphis, Tennessee produce popular cereals including Rice Krispies, Raisin Bran, Froot Loops, Corn Flakes and Frosted Flakes.

Kellogg said it is ‘implementing contingency plans’ to limit supply disruptions for consumers.

Challenges thrown up from the pandemic

The company has expressed disappointment at the union’s decision to strike, noting its worker’s compensation are ‘among the industry’s best’, with average 2020 earnings of union workers coming in at $120,000.

However, Kevin Bradshaw, VP of BCTWGM Memphis, told Bloomberg the base pay at his plant is roughly $58,000 a year, and last year’s figure was inflated by pandemic-driven overtime.

According to Bradshaw, Kellogg workers “worked seven days a week, 12-to-16 hours a day” to produce Kellogg ready-to-eat cereals during the pandemic.

Kellogg is not the only packaged-food company to face worker issues thrown up by the pandemic.

Earlier this year, more than 600 workers at a Frito-Lay plant in Kansas also downed tools to protest working conditions and pay during the pandemic. The strike ended in July when workers ratified a new contract. In August, Nabisco workers in five US states also ratified a new contract following a strike that had slowed production of Oreo cookies and Triscuit crackers.

Kellogg has offered to increase wages and benefits for its employees.