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.
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.