One week after workers at the company’s cereal plants in Nebraska, Michigan, Pennsylvania and Tennessee walked out, Kellogg Co. has released an official response to the strike. In a video statement, company spokesperson Kris Bahner alleged that the union had “grossly misinterpreted” the terms of a company contract to its members and the media.
She asserted that Kellogg’s “number one priority” is to resume negotiations and hammer out a contract. She also said Kellogg was “especially concerned” that member workers of the Bakery, Confectionary, Tobacco Workers and Grain Millers International voted to strike October 5 without first voting on a Kellogg’s proposal dated October 1.
Bahner also indicated the company is preparing to continue cereal production, with or without striking workers. “Kellogg is ready, willing and able to continue negotiations at any time,” she said. “In the meantime, we have a responsibility to our business, customers and consumers to run our plants, despite the strike. We are continuing operations with other resources and hope that we can reach an agreement soon.”
One key issue between the union and company concerns wages and benefits for two groups of employees.
“Kellogg is not asking employees to give up health care, retirement benefits, or holiday and vacation pay,” Bahner said. Many employees, in fact, pay nothing for their health insurance, she said: “Most also have unparalleled, no cost, comprehensive health insurance, meaning they pay nothing for their health care—no premiums, no deductibles, nothing.”
Newer hourly employees at Kellogg’s have the same healthcare plan the company’s salaried employees do, she added, but with lower employee contributions. Both parties acknowledge the BCTGM agreed to that system in 2015, but in a video posted to the union’s Facebook page October 11, union regional VP Roger Miller characterized that agreement as one made under duress.
“Back in 2015, the company had informed (BCTGM) President Durkee that they intended to close two of their North American cereal plants” if the union didn’t agree to concessions, Miller said. One of the concessions the union agreed to was the establishment of a two-tier system of “legacy” and “transitional” employees.
Less-senior “transitionals” were hired with lower wages, an 80/20 healthcare plan with a weekly contribution, less vacation time, and a 401(k) match in lieu of a pension, Miller says, but it was intended as a temporary status: Workers who stuck around could become “legacy” employees, which would then net them the higher wages and benefits of their seniors.
Now, Miller says, Kellogg wants to eliminate that pathway, keeping new hires at “transitional” level benefits permanently and potentially fomenting “friction” between groups of different-earning employees. According to Miller, about 70% of the plant’s workers are in the more senior group.
In a statement posted to the BCTGM International Twitter feed, Local 252G Vice President Kevin Bradshaw characterized the offer as setting more senior Kellogg workers against new hires. “Kellogg’s is basically saying, ‘if you guys accept this it won’t have anything to do with you.’ So everyone coming behind us will no longer have health benefits or retirement, but they can still come work here for $13 an hour less than what we make,” he said.
According to Kellogg’s response, the latest offer “not only maintains industry-leading pay and benefits, but offers significant increases in wages, benefits and retirement.” The company says the average yearly earnings in 2020 for one of its hourly employees was $120,000 last year, and that more than a third of employees made between $120,000 and $200,000.
The union has also referenced the $120,000 figure, but with a harsher tone: Striking workers have alleged the impressive sum was due to forced seven-days-a-week overtime.
According to Bahner, the significant majority of overtime came from volunteers: “The fact is, in 2020, our cereal manufacturing employees worked an average of 52 to 56 hours a week,” Bahner said. “However, 90% of the time, employees volunteered for the extra hours.” If anything, she said, forced overtime is a headache for the company, because it’s “disruptive” and makes recruiting employees difficult.
She added that the company proposed adding a fourth crew, but that the union rejected plans that might change existing work schedules.
The last section of the Kellogg statement contradicts BCTGM President Anthony Shelton’s complaint that Kellogg has threatened to send jobs to Mexico if they reject company proposals.
“That is completely false,” said Bahner. “We have not proposed moving any cereal volume or jobs outside the U.S. as part of these negotiations.”
According to the union’s website, the strike consists of 1,400 workers at four Kellogg plants around the country: in Memphis, Tennessee; Lancaster, Pennsylvania; Omaha, Nebraska; and Battle Creek, Michigan, near company headquarters. The factories in question make a number of high-profile Kellogg cereal brands, including Rice Krispies, Raisin Bran, Froot Loops, Corn Flakes, and Frosted Flakes.