(Reuters) -Kellogg Co said on Thursday it has reached an agreement with the union on a new five-year contract for its employees at a few breakfast-cereal plants in the United States, potentially bringing a near two-month long strike to an end
.
Union workers remain on strike in Battle Creek
The tentative agreement, reached after multiple rounds of talks with the union, includes wage increases and benefits for all employees and better terms for temporary employees.
The latest agreement allows for all temporary employees with four or more years of service to move to permanent positions with better pay and benefits.
Union members had previously opposed Kellogg's two-tier employment system that did not offer temporary workers, who make up 30% of its workforce, a pathway to become permanent staff.
Employees at Kellogg's cereal plants including Michigan, Nebraska, Pennsylvania and Tennessee went on strike on Oct. 5 after their contracts expired, as negotiations over payment and benefits stalled due to differences between the company and about 1,400 union members.
The new deal, which will be voted on by Kellogg employees on Dec. 5, will also offer permanent employees with better post-retirement benefits.
During lengthy negotiations with union members, Kellogg had hired permanent replacements for some of its plant workers on strike,
The tentative agreement, reached after multiple rounds of talks with the union, includes wage increases and benefits for all employees and better terms for temporary employees.
The latest agreement allows for all temporary employees with four or more years of service to move to permanent positions with better pay and benefits.
Union members had previously opposed Kellogg's two-tier employment system that did not offer temporary workers, who make up 30% of its workforce, a pathway to become permanent staff.
Employees at Kellogg's cereal plants including Michigan, Nebraska, Pennsylvania and Tennessee went on strike on Oct. 5 after their contracts expired, as negotiations over payment and benefits stalled due to differences between the company and about 1,400 union members.
The new deal, which will be voted on by Kellogg employees on Dec. 5, will also offer permanent employees with better post-retirement benefits.
During lengthy negotiations with union members, Kellogg had hired permanent replacements for some of its plant workers on strike,
and also warned of a dent to its annual profit due to the disruption.
Kellogg Net Profit Margin 2006-2021 | K | MacroTrends
66 rows · Kellogg Net Profit Margin Historical Data; Date TTM Revenue TTM Net Income Net Margin; 2021-09-30: $14.23B: $1.26B: 8.86%: 2021-06-30: $14.03B: $1.30B: 9.27%: 2021-03-31: $13.94B: $1.27B: 9.12%: 2020-12-31: $13.77B: $1.25B: 9.08%: 2020-09-30: $13.53B: $1.19B: 8.80%: 2020-06-30: $13.47B: $1.09B: 8.09%: 2020-03-31: $13.47B: $1.03B: 7.61%: 2019-12-31: $13.58B: $0.96B: 7.07%: 2019-09-30: …
See all 66 rows on www.macrotrends.netDATE TTM REVENUE TTM NET INCOME NET MARGIN 2021-09-30 $14.23B $1.26B 8.86% 2021-06-30 $14.03B $1.30B 9.27% 2021-03-31 $13.94B $1.27B 9.12% 2020-12-31 $13.77B $1.25B 9.08%
Kellogg is one of the several major U.S. companies that has faced worker strikes in the recent past as the labor market tightens and inflation reaches record highs.
Last month, farm equipment maker Deere & Co reached an agreement with workers after a six week strike.
(Reporting by Maria Ponnezhath in Bengaluru; Editing by Arun Koyyur and Shinjini Ganguli)
Last month, farm equipment maker Deere & Co reached an agreement with workers after a six week strike.
(Reporting by Maria Ponnezhath in Bengaluru; Editing by Arun Koyyur and Shinjini Ganguli)
Striking Kellogg's workers in U.S. to get 3 per cent raises in new contract
Striking Kellogg's workers stand outside the company's cereal plant in Omaha, Neb., Thursday, Dec. 2, 2021. (AP Photo/ Josh Funk)
Josh Funk
The Associated Press
Published Dec. 2, 2021
OMAHA, NEB. -
Kellogg's has reached a tentative agreement with its 1,400 cereal plant workers that will deliver 3 per cent raises and end a nearly two-month-long strike if the deal is approved.
The five-year deal with the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union also includes cost of living adjustments in the second through the fifth years of the contract and it maintains the workers' current health benefits, the company said Thursday.
Kellogg's workers who have been on strike since Oct. 5 will vote on the new contract Sunday. The company said it expects the results to be announced early next week.
The new deal covers workers at all four of Kellogg's U.S. cereal plants, which are located in Battle Creek, Michigan; Omaha, Nebraska; Lancaster, Pennsylvania; and Memphis, Tennessee. They make all of the company's well-known brands of cereal, including Frosted Flakes and Rice Krispies.
The tentative agreement also addresses the two-tiered system of wages that had been a sticking point for the union. The system gives newer workers less pay and fewer benefits and it includes up to 30% of the workforce at the plants. The Battle Creek-based company said the agreement will allow all workers with at least four years of experience to move up to the higher legacy pay level immediately and some additional workers would move up in the later years of the contract.
Union President Anthony Shelton thanked all the members of the bargaining committee in a statement but he said workers "will have the final say on the contract."
Outside the Kellogg's plant in Omaha, Eric Dwornicki said it is encouraging to see that a tentative agreement was reached, but the details of the deal will determine whether it will pass.
"We want to go back to work, but we don't want to be taken advantage of," said Dwornicki, 35, who has worked at the plant for nearly 10 years.
Dan Luers, who's father worked at the plant for 22 years, said at least the agreement is a sign of progress after nine weeks on strike. Luers, 32, has worked at the Omaha cereal plant for 10 years.
Jerry Ellerman celebrated the 17th anniversary of when he started at the plant and his 50th birthday on the picket line in Omaha, but he said the strike won't end unless it is a good deal.
"I'm willing to stay out here if it's not fair," Ellerman said.
The company took a hard line with workers during the strike.
Last month, Kellogg's went to court in Omaha to secure an order that set guidelines for how workers behave on the picket line because the company said striking workers were blocking entrances to its cereal plant and intimidating replacement workers. Union officials denied any improper behavior.
The company has been using salaried employees and outside workers to keep its plants running during the strike, and it threatened last week to begin hiring permanent replacements for some striking workers.
But the union held out for higher wages after employees had been working long hours -- more than 80 hours a week -- over the past 18 months to keep up with demand during the coronavirus pandemic. And workers believed that the ongoing widespread worker shortages across the country gave them an advantage in the negotiations.
In another recent strike, more than 10,000 Deere workers secured 10% raises and improved benefits before returning to work last month.
Josh Funk
The Associated Press
Published Dec. 2, 2021
OMAHA, NEB. -
Kellogg's has reached a tentative agreement with its 1,400 cereal plant workers that will deliver 3 per cent raises and end a nearly two-month-long strike if the deal is approved.
The five-year deal with the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union also includes cost of living adjustments in the second through the fifth years of the contract and it maintains the workers' current health benefits, the company said Thursday.
Kellogg's workers who have been on strike since Oct. 5 will vote on the new contract Sunday. The company said it expects the results to be announced early next week.
The new deal covers workers at all four of Kellogg's U.S. cereal plants, which are located in Battle Creek, Michigan; Omaha, Nebraska; Lancaster, Pennsylvania; and Memphis, Tennessee. They make all of the company's well-known brands of cereal, including Frosted Flakes and Rice Krispies.
The tentative agreement also addresses the two-tiered system of wages that had been a sticking point for the union. The system gives newer workers less pay and fewer benefits and it includes up to 30% of the workforce at the plants. The Battle Creek-based company said the agreement will allow all workers with at least four years of experience to move up to the higher legacy pay level immediately and some additional workers would move up in the later years of the contract.
Union President Anthony Shelton thanked all the members of the bargaining committee in a statement but he said workers "will have the final say on the contract."
Outside the Kellogg's plant in Omaha, Eric Dwornicki said it is encouraging to see that a tentative agreement was reached, but the details of the deal will determine whether it will pass.
"We want to go back to work, but we don't want to be taken advantage of," said Dwornicki, 35, who has worked at the plant for nearly 10 years.
Dan Luers, who's father worked at the plant for 22 years, said at least the agreement is a sign of progress after nine weeks on strike. Luers, 32, has worked at the Omaha cereal plant for 10 years.
Jerry Ellerman celebrated the 17th anniversary of when he started at the plant and his 50th birthday on the picket line in Omaha, but he said the strike won't end unless it is a good deal.
"I'm willing to stay out here if it's not fair," Ellerman said.
The company took a hard line with workers during the strike.
Last month, Kellogg's went to court in Omaha to secure an order that set guidelines for how workers behave on the picket line because the company said striking workers were blocking entrances to its cereal plant and intimidating replacement workers. Union officials denied any improper behavior.
The company has been using salaried employees and outside workers to keep its plants running during the strike, and it threatened last week to begin hiring permanent replacements for some striking workers.
But the union held out for higher wages after employees had been working long hours -- more than 80 hours a week -- over the past 18 months to keep up with demand during the coronavirus pandemic. And workers believed that the ongoing widespread worker shortages across the country gave them an advantage in the negotiations.
In another recent strike, more than 10,000 Deere workers secured 10% raises and improved benefits before returning to work last month.
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Kellogg Co., union reach tentative agreement on 5-year contract
Nick Buckley,
First shift worker Brian Madsen pickets Kellogg Co. on Thursday, Dec. 2, 2021, at the Porter Street plant in Battle Creek, Michigan.
"Among other things, the tentative agreement includes an accelerated, defined path to legacy wages and benefits for transitional employees, and wage increases and enhanced benefits for all," Kellogg's spokesperson Kris Bahner said in a release.
The Federal Mediation and Conciliation Service assisted in negotiations.
The tentative agreement includes:
• All employees with four or more years of service graduate to legacy wages and benefits upon ratification. Each year of the contract, transitional workers graduate at the rate of 3% of the plant's headcount.
• Wage increases for all, including 3% upon ratification for legacy employees and increases for transitional employees.
• Increased pension multiplier for legacy employees.
• Enhanced benefits for all employees. Medical and prescription drug coverage will be reinstated retroactive Oct. 5, 2021. Employees who elected and paid COBRA premiums will be reimbursed for premiums paid.
• Increased severance for permanent plant closings by $10,000 for each level. The plant closure moratorium would be renewed for the term of the contract.
Kelly Stokes, Kathy Webb, LaKisha Scott and Brenda Flemons picket Kellogg Co. on Tuesday, Nov. 23, 2021, at the Porter Street plant in Battle Creek, Michigan.
In September, the company informed employees it would be cutting 212 jobs in Battle Creek by 2023 as part of streamlining efforts and relocation of cereal production across its ready-to-eat cereal (RTEC) network in North America.
Amid the strike, cereal production temporarily halted before Kellogg's began using salaried employees and "third-party resources." In November, the company announced it would hire some permanent replacement workers after negotiations broke down.
The high-profile labor dispute comes as union workers feel emboldened by a nationwide labor shortage amid the ongoing pandemic.
Standing on the picket line outside of the Porter Street plant in Battle Creek on Thursday, Rob Clark said he still has some questions regarding the tentative agreement before deciding if he will vote yes.
"We need clarification from our committee before we can make a real choice. There is definitely some questions," he said. "The uncertainty is tough for everyone. I think we've held together pretty well."
Kellogg's was founded in Battle Creek by Will Keith Kellogg in 1906 as Battle Creek Toasted Corn Flake Company. In addition to the Porter Street plant, the city is home to Kellogg's headquarters. The Porter Street plant is one of over 50 around the globe, and the company employed 31,000 workers worldwide as of 2020.
The last nationwide walkout among Kellogg's cereal makers was in 1972 and lasted 21 days.
Reporter Nick Buckley at nbuckley@battlecreekenquirer.com
Battle Creek Enquirer photojournalist Alyssa Keown contributed to this report.
This article originally appeared on Battle Creek Enquirer: Kellogg Co., union reach tentative agreement on 5-year contract
Nick Buckley,
The Battle Creek Enquirer
Thu, December 2, 2021
The Michigan American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) hosts a rally outside Kellogg's World Headquarters on Wednesday, Oct. 27, 2021 to support workers on strike in Battle Creek, Michigan.
Kellogg Co. and the Bakery, Confectionary, Tobacco Workers and Grain Millers union have reached a tentative agreement on a five-year master contract.
The agreement is pending a vote expected Sunday among the 1,400 union employees at the company's cereal plants in Battle Creek; Omaha, Nebraska; Lancaster, Pennsylvania; and Memphis, Tennessee. If the vote passes, it will end a strike that lasted over eight weeks as workers sought better wages and benefits.
The strike began Oct. 5 following the expiration on the one-year extension of the previous master contract. One major point of contention has been the company's two-tiered wage system, where workers are divided into "transitional" and "legacy" employees, the latter earning higher wages and receiving better retirement benefits.
Thu, December 2, 2021
The Michigan American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) hosts a rally outside Kellogg's World Headquarters on Wednesday, Oct. 27, 2021 to support workers on strike in Battle Creek, Michigan.
Kellogg Co. and the Bakery, Confectionary, Tobacco Workers and Grain Millers union have reached a tentative agreement on a five-year master contract.
The agreement is pending a vote expected Sunday among the 1,400 union employees at the company's cereal plants in Battle Creek; Omaha, Nebraska; Lancaster, Pennsylvania; and Memphis, Tennessee. If the vote passes, it will end a strike that lasted over eight weeks as workers sought better wages and benefits.
The strike began Oct. 5 following the expiration on the one-year extension of the previous master contract. One major point of contention has been the company's two-tiered wage system, where workers are divided into "transitional" and "legacy" employees, the latter earning higher wages and receiving better retirement benefits.
First shift worker Brian Madsen pickets Kellogg Co. on Thursday, Dec. 2, 2021, at the Porter Street plant in Battle Creek, Michigan.
"Among other things, the tentative agreement includes an accelerated, defined path to legacy wages and benefits for transitional employees, and wage increases and enhanced benefits for all," Kellogg's spokesperson Kris Bahner said in a release.
The Federal Mediation and Conciliation Service assisted in negotiations.
The tentative agreement includes:
• All employees with four or more years of service graduate to legacy wages and benefits upon ratification. Each year of the contract, transitional workers graduate at the rate of 3% of the plant's headcount.
• Wage increases for all, including 3% upon ratification for legacy employees and increases for transitional employees.
• Increased pension multiplier for legacy employees.
• Enhanced benefits for all employees. Medical and prescription drug coverage will be reinstated retroactive Oct. 5, 2021. Employees who elected and paid COBRA premiums will be reimbursed for premiums paid.
• Increased severance for permanent plant closings by $10,000 for each level. The plant closure moratorium would be renewed for the term of the contract.
Kelly Stokes, Kathy Webb, LaKisha Scott and Brenda Flemons picket Kellogg Co. on Tuesday, Nov. 23, 2021, at the Porter Street plant in Battle Creek, Michigan.
In September, the company informed employees it would be cutting 212 jobs in Battle Creek by 2023 as part of streamlining efforts and relocation of cereal production across its ready-to-eat cereal (RTEC) network in North America.
Amid the strike, cereal production temporarily halted before Kellogg's began using salaried employees and "third-party resources." In November, the company announced it would hire some permanent replacement workers after negotiations broke down.
The high-profile labor dispute comes as union workers feel emboldened by a nationwide labor shortage amid the ongoing pandemic.
Standing on the picket line outside of the Porter Street plant in Battle Creek on Thursday, Rob Clark said he still has some questions regarding the tentative agreement before deciding if he will vote yes.
"We need clarification from our committee before we can make a real choice. There is definitely some questions," he said. "The uncertainty is tough for everyone. I think we've held together pretty well."
Kellogg's was founded in Battle Creek by Will Keith Kellogg in 1906 as Battle Creek Toasted Corn Flake Company. In addition to the Porter Street plant, the city is home to Kellogg's headquarters. The Porter Street plant is one of over 50 around the globe, and the company employed 31,000 workers worldwide as of 2020.
The last nationwide walkout among Kellogg's cereal makers was in 1972 and lasted 21 days.
Reporter Nick Buckley at nbuckley@battlecreekenquirer.com
Battle Creek Enquirer photojournalist Alyssa Keown contributed to this report.
This article originally appeared on Battle Creek Enquirer: Kellogg Co., union reach tentative agreement on 5-year contract
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