About 1,400 Kellogg Co. unionized workers ratified a new five-year contract on Tuesday, concluding a 2½ month strike with a deal that the union says maintains workers’ cost-of-living raises and guarantees no plants will be shut down for about five years.
The new contract includes pay raises, new health benefits, pension multiplier increases and cost-of-living adjustments to wages, according to an outline of the agreement from the company.
“This agreement makes gains and does not include any concessions,” said Anthony Shelton, international president of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.
The strike among plant workers in Omaha, Neb.; Battle Creek, Mich.; Memphis, Tenn., and Lancaster, Pa., had been ongoing since Oct. 5. The workers earlier this month rejected a tentative contract agreement. Employees at those four plants make the company’s various ready-to-eat cereals.
“We are pleased that we have reached an agreement that brings our cereal employees back to work,” Kellogg spokeswoman Kris Bahner said. The company said last week that it had reached a tentative agreement with the union on the contract.
Veteran Kellogg employees will receive wage increases of $1.10 an hour, with newer staff and new hires making $24.11 an hour. Those newer employees will also get a new dental benefit, and all employees will get a new vision benefit offering.
The Kellogg workers are one of several groups of employees, including workers at Mondelez International Inc. MDLZ -0.71% and Deere & Co. DE 3.29% , who have gone on strike this year. In some ways, power has shifted to workers during a countrywide labor shortage that has left businesses struggling to find employees.
Kellogg, which is based in Battle Creek, makes snack products like Cheez-Its and Club crackers as well as cereals such as Frosted Flakes and Apple Jacks.
Kellogg workers were asking for better benefits and pay after working longer hours during the Covid-19 pandemic. They had also taken issue with a tiered pay system where veteran employees made more money than newer hires who also had to pay more for health insurance.
Sen. Bernie Sanders (I., Vt.) recently rallied with the Kellogg workers. “I think people all over America are looking at you and saying thank you for having the guts to stand up for working people,” he said in a video posted on his YouTube page.
The agreement, according to Kellogg, includes higher pay for its employees, including a cost-of-living adjustments. The contract that Deere workers voted to ratify last month also included those adjustments. Analysts say that these types of provisions could spread in future negotiations among unions and employers. The idea behind these adjustments is to protect workers’ pay, while prices are increasing unpredictably and quickly.
The Kellogg workers’ strike lasted longer than a recent strike at Deere, where workers went on strike for more than a month. The Deere employees last month voted to ratify a new six-year contract with the farm and construction machinery company that included higher base production pay, general raises, pension funding improvements and bonuses. Workers for Deere had rejected two previous offers.
“We are seeing acute shortages in labor across all spectrums of the economy,” Kellogg Chairman and Chief Executive Steve Cahillane said on the company’s third-quarter earnings call in early November. “This is resulting in absenteeism, high turnover, difficulty obtaining temporary labor, and, for some of us, even labor strikes.” The strike at Kellogg boosted costs at the company.
Write to Allison Prang at [email protected]
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