Kellogg reaches tentative deal with union to end 2-month strike

Dive Brief:

• Kellogg announced it has struck a tentative agreement for a five-year contract with the Bakery, Confectionery, Tobacco Workers and Grain Millers’ International Union (BCTGM). This would end a walkout of 1,400 workers at its ready-to-eat cereal plants in Michigan, Nebraska, Pennsylvania and Tennessee that has disrupted operations for nearly nine weeks. Federal mediators assisted with these latest negotiations.
• The agreement would give “transitional” employees an “accelerated, defined path” to legacy wages and benefits after working at the company for four years, the company said. It would also provide 3% wage increases and an “increased pension multiplier” for “legacy” employees. Dan Osborn, president of the Omaha, Nebraska, union branch, told Bloomberg that workers will have a meeting this Friday to discuss the proposed contract. Each local union branch will hold its own vote on Sunday, with results expected early next week. 
• The tentative resolution of one of this year’s longest-running strikes affecting the food industry comes just about a week after Kellogg threatened to permanently replace some of the striking workers to keep its cereal factories running during a time of heightened demand.

Dive Insight:

After weeks of escalation, the Kellogg strike appears headed for a peaceful resolution.

The strikes began Oct. 5, following a series of walkouts this summer by workers from Mondelēz, Frito-Lay and more to demand better contracts with more benefits. In its negotiations with Kellogg, BCTGM said in a statement that it was pursuing a goal of securing “a fair contract that provides a living wage and good benefits.”

Trevor Bidelman, chair of the BCTGM union’s Battle Creek, Michigan chapter, told Food Dive in October that the strikes were for “the future worker.” The union did not want the company to invoke “a two-tiered benefit system” that would prevent new employees from graduating into legacy status, which would provide them increased benefits. Over the course of nearly nine weeks, BCTGM rejected a series of proposals from Kellogg, saying that they did not offer adequate benefits and would drive up health care costs. After the union rejected what Kellogg had described as its “Last Best Final Offer” on Nov. 11, talks stalled and then restarted over the next two weeks to allow for more negotiations.

In that time, Kellogg not only brought in salaried and temporary workers to keep its cereal plants open, but also said it would hire permanent replacements of striking employees where necessary. It also filed a lawsuit early in the strike against BCTGM for “improper actions” that it said intended to cause the company financial harm. Kellogg has had to juggle growing demand for its cereal at a time of supply chain chaos, including importing cereal to get product on U.S. shelves.

Kellogg’s latest offer could be seen as a success for the union, given that temporary employees will now be able to eventually earn higher wages and at least some pension benefits. Throughout the strikes, the company said that it provided “industry-leading” wages to its ready-to-eat cereal workers.

As part of this latest agreement, both legacy and transitional employees will not face changes to their health care plans, and vision benefits will be added to all plans. Transitional employees will also be offered dental insurance. The company also said that legacy employees would see pension multiplier increases totaling $9 over five years.

“The workers have won a lot,” Rebecca Givan, an associate professor of labor studies and employment relations in the School of Management and Labor Relations at Rutgers University, told Bloomberg. “It certainly shows the success of going on strike.”