‘We are hopeful’: Kellogg reaches second tentative agreement with striking workers

By Gill Hyslop contact

- Last updated on GMT

Kellogg's CEO Steve Cahillane is hoping employees will vote to ratify its second proposal and "return to work". Pic: GettyImages/Hung_Chung_Chih
Kellogg's CEO Steve Cahillane is hoping employees will vote to ratify its second proposal and "return to work". Pic: GettyImages/Hung_Chung_Chih

Related tags: Kellogg's, Industrial action, Bakery, Confectionery, Tobacco Workers and Grain Millers

With figures like the US President weighing in on the dispute, the breakfast cereal giant has forged a second tentative agreement with the Bakery, Confectionary, Tobacco Workers and Grain Millers International (BCTGM) union representing the 1,400 cereal plant employees who have been on strike since early October.

Two weeks ago, the workers voted down the first agreement between Kellogg’s and BCTGM representatives, prompting the Battle Creek, Michigan-based company to announce it would go ahead with hiring permanent replacements.

Biden scorned the move, calling it “an existential attack on the union and its members’ jobs and lifelihoods”.

Second time around

The Special K and Rice Krispies maker has now reached a second tentative agreement with the BCTGM, which “addresses the union’s request” ​for cost-of-living adjustments for all employees, along with a $1.10 per hour raise across the board. It also preserves the previously proposed health care benefits.

However, the process for converting newer hires to veteran status remains the same.

Kellogg’s two-tier compensation system is one of the sticking points behind the industrial action.

Workers hired after 2015 typically receive lower wages than longer-tenured workers ($20/hour vs $35/per hour on average).

Under the original five-year contract voted down by employees,​ the company proposed to convert all employees with four or more years to veteran status, with an immediate 3% wage increase.

It also suggested to annually convert 3% of the plant’s head count to move up to the higher legacy pay level.

Newer highs would progress from the pay grade of $20/h to around $28/hour after their sixth year.

While union officials said that plan wouldn’t let other workers move up quickly enough, veteran workers have expressed concern that adding lower-paid workers will ultimately drag down their wages and benefits as well.

The results of the second vote are expected to be released early next week.

Praising workers

“We value all of our employees. They have enabled Kellogg to provide food to Americans for more than 115 years,”​ said Steve Cahillane, CEO of Kellogg Company.

“We are hopeful our employees will vote to ratify this contract and return to work.”

A Kellogg’s spokeswoman would not confirm if the company had started the process of hiring permanent replacement workers.

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