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Kellogg frustrated and disappointed over Memphis lockout

7 commentsBy Kacey Culliney , 28-Oct-2013

Workers locked out of Memphis plant as union and Kellogg fail to reach agreement over casual labor contracts. Photo credit: BCTGM
Workers locked out of Memphis plant as union and Kellogg fail to reach agreement over casual labor contracts. Photo credit: BCTGM

The Kellogg Company has locked out workers at its Memphis plant over union rows regarding casual labor contracts; a decision it says has left the company in a “frustrating and disappointing” position.

The lockout on the ready-to-eat (RTE) cereal production facility, impacting over 200 workers, was initiated last week on October 22 and will be lifted if members of the Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM) agree to Kellogg’s last proposal on increased use of casual workers at the plant.

The move to lock out workers comes after 13 meetings between Kellogg and the union over the past month failed to lead to an agreement on a new contract. Kellogg said that despite repeated requests for counter proposals from the BCTGM, the union has not provided such because it has refused to negotiate without a 30% cap on the broader utilization of casual employees.

"Bargaining is no longer pending. Kellogg’s team has exhausted its authority and ideas," the cereal maker said in its final proposal.

The current costs at the Memphis plant are putting the company at a competitive disadvantage in a “tough cereal category”, it said. Its proposal to use more casual labor, therefore, would reduce costs but has caused controversy among the BCTGM union that suggested Kellogg is “eating away at America’s middle-class”.

The cereal major has already made more than 60 job cuts at the plant as part of a restructuring plan.

It’s about long-term viability, says Kellogg

Kris Charles, vice president of global communications at Kellogg, said the decision to implement a lockout was difficult.

“It is frustrating and disappointing to be in this position, but we must carefully consider every aspect of how we do business – including this labor contract – to help ensure our long-term viability,” Charles told BakeryandSnacks.com.

“We are hopeful that an agreement remains within reach, and remain available to meet with the Union,” she added.

Union angered

The BCTGM is angered by the move to lock out workers. “Kellogg Company is a $14 billion dollar company that has picked a fight with its hard working Memphis employees,” the union said in a statement.

“By trying to replace their full-time employees with part time casuals, the company is eating away at America’s middle-class. Successful and profitable companies like Kellogg should be creating more full-time employment for America’s hard working citizens, not helping to destroy America’s middle-class jobs,” it added.

However, Kellogg made clear that the agreement would not threaten full-time positions.

In its final proposal to the union it said: “Although Kellogg would have additional management rights to hire new casual employees under its proposals, the company could not exercise these rights if that decision would cause the layoff of a current non-casual unit employee working in the plant today.”

Job security of current employees sure

Kellogg said that job security of other full-time employees would be enhanced with the increase of casual employees and noted that the terms of the agreement did not involve any proposals to cut wages or benefits of current unit employees outside of the casual program.

“In short, Kellogg is proposing to remove restrictions on the number of casual unit employees that the company may employ moving forward, and to expand the concept beyond relief purposes,” it said.

In a letter to Memphis workers, plant director Chris Rook said: "The long-term sustainability of our Memphis plant is at risk – a fact which we find unacceptable. We are proposing a fair and competitive contract that protects the wage and benefits for our current employees and will provide above-market wages to new employees."

No agreement between Kellogg and the union has been reached thus far.

7 comments (Comments are now closed)

The Union Is Killing Its Workers Nationwide

When it all comes down to it its the Union that is keeping these employees from working. Kellogg is not trying to change existing plans only offset some of the cost of the volume reduction. These workers want to work and Kellogg wants them to work. The Union does not want to agree to these terms because in the long run, this takes money out of the Unions pocket. If the Unions would ease up and stop sucking every little bit of profit out of each company the jobs would be more plentifulin America. The Union use to have a place 50 years ago but know is ruining jobs nationwide,just look at Detroit and Hostess! The Unions claim they care about the Blue color workers but how many of their execs profit from the middle class? I bet they all live in houses to big for their families, drive overly priced cars and can pay their light bills and give their children what they need. Let your workers in Memphis go back to work and except what you have already sucked from this company before they completely pull out of memphis all together because in reality only the workers in Memphis will suffer in the end. The Union will move to their next victim until their no more. If these Union reps would wise up and take on some new direction and not try to suck all the profit from a company jobs would prosper and there would not be an unemployment crisis in America.

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Posted by Rich
02 February 2014 | 20h23

This is what happens when you try to play hardball

When unions won't even try to bargain you end up with nothing. Read the article, Kellogg wasn't asking to change existing employees contracts. They were asking to bring in new flexible employees. The unions hard balled their employees out of a job. I call it stupidity on the union's part. They have no one to blame but themselves.

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Posted by Cat Camp
03 January 2014 | 23h10

NAFTA and Project K

Prior to NAFTA Memphis was the low cost producer in North America. Since NAFTA, a 75% reduction in it's regular labor force with changes to allow casual employees. Mexico has gained production capacities through the closing of the California, Battle Creek and Memphis.Exporting to America what these plants once produced. Project K is global plan to take the high profit RTE sector even leaner and use those dollars to pay down it's huge debt, buy back stock. New management has placed the company in a bind. While projecting imports to secure the RTE market at home as it cuts labor costs nationwide.

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Posted by Jerry House
07 November 2013 | 19h33

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