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November 4, 2021

Kellogg labour dispute continues as offer rejected by workers

The union representing cereal plant workers – who are striking over contract terms – has rejected Kellogg’s revised offer.

Kellogg and a union leading a strike that has hit the US food giant’s domestic factories have failed to reach a deal after talks.

The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union has rejected Kellogg’s revised proposal – which the company has insisted is its “last best final offer” and which it hoped would end a month-long dispute.

Workers began the strike action on 5 October amid talks that have been ongoing since early September. Negotiations between the Rice Krispies and Corn Flakes maker and the staff union have been ongoing since 8 September, characterised by new ‘master labour contract’ proposals by Kellogg and rejections by the workers’ representative.

Kellogg has brought in contract workers in an attempt to maintain production at four plants in Nebraska, Michigan, Pennsylvania and Tennessee.

Steve Cahillane, Kellogg’s chairman and CEO, referred to the strike as the company released its third-quarter financial results today (4 November).

He said: “Business conditions do not get any easier in the fourth quarter, especially with the added challenge of a current labour disruption.”

The company said its full-year adjusted profit growth could be at the low end of its range of 1% to 2% due to “current supply and labour challenges”.

Kellogg’s third-quarter results – for the three months to 2 October – revealed net sales of US$3.62bn, 5.6% up year-on-year, and operating profit up 9.1% at U$447m. Net income was down from $352m to $305m.

On an organic basis, net sales increased 5.1%. Adjusted for items, Kellogg’s operating profit grew 12%.

Cahillane said: “I’m incredibly proud of how our organization has executed through an extremely difficult operating environment, marked by economy-wide bottlenecks and shortages and high cost inflation.

“That we could deliver strong third-quarter results and reaffirm our full-year earnings guidance in this environment is a testament to our strategy, our portfolio, and our people.”

 

 

 

 

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