Kellogg Company and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union are engaged in negotiations to finalize a master labor contract for our four U.S. Ready to Eat Cereal (RTEC) plants.
New Five-Year Agreement Reached
We are pleased to announce that employees have ratified the tentative agreement for a master contract at our four U.S. cereal plants. The contract covers approximately 1,400 union-represented employees, all of whom are welcome back to work.
The new, five-year contract furthers our employees’ leading wages and benefits, with immediate, across the board wage increases and enhanced benefits for all. It also provides an accelerated, defined path to legacy wages and benefits for transitional employees, among other items.
“We are pleased that we have reached an agreement that brings our cereal employees back to work,” said Steve Cahillane, Chairman and CEO. “We look forward to their return and continuing to produce our beloved cereal brands for our customers and consumers.”
See additional details of the deal here.
Tentative Agreement Reached with Union
We are pleased to announce that Kellogg Company and the union have reached a recommended tentative agreement for a new five-year labor contract covering 1,400 employees at our U.S. cereal plants in Battle Creek, Mich., Lancaster, Penn., Memphis, Tenn. and Omaha, Neb.
Highlights from the recommended agreement include:
- Increasing Leading Pay: Employees at our U.S. cereal plants are currently among the highest paid in our industry. The average 2020 earnings for the majority of hourly employees was $120,000, nearly $36-per-hour straight time for our most senior “legacy” employees. The agreement includes increased pay for all of our people, including across the board wage increases and COLA (Cost-of-Living Adjustment) starting Year 1 of the agreement.
- Path to Legacy: Transitional employees have an accelerated, defined path to legacy wages and benefits as compared to the current contract.
- Improving No Cost Healthcare: Most of our U.S. cereal plant employees pay nothing for their healthcare (no premiums, co-pays, or out of pocket costs for prescriptions). The balance of our workforce enjoy the same health insurance as our salaried employees, but at a much lower cost to them. The agreement further expands already very attractive healthcare benefits, across the board.
- Attractive Retirement Benefits: The majority of our U.S. cereal plant employees have pension benefits – a rarity these days – while others are provided 401(k) plans. The agreement increases those pension benefits.
- No Takeaways: The agreement does not take away anything from our employees. In other words, we are not requesting any concessions from the union.
“We value all of our employees. They have enabled Kellogg to provide food to Americans for more than 115 years,” said Kellogg Company Chairman and CEO Steve Cahillane. “We are hopeful our employees will vote to ratify this contract and return to work.”
See the news release here.
Employees Reject Tentative Agreement
We are disappointed that the tentative agreement for a master contract over our four U.S. cereal plants was not ratified by employees.
The tentative agreement would have provided an accelerated, defined path to legacy wages and benefits for transitional employees, and wage increases and enhanced benefits for all, on top of what is already an industry-leading compensation package, among other items. The tentative agreement included no concessions or takeaways.
We have made every effort to reach a fair agreement, including making six offers to the union throughout negotiations, all which have included wage and benefits increases for every employee. It appears the union created unrealistic expectations for our employees.
The prolonged work stoppage has left us no choice but to hire permanent replacement employees in positions vacated by striking workers.
These are great jobs and posting for permanent positions helps us find qualified people to fill them.
While certainly not the result we had hoped for, we must take the necessary steps to ensure business continuity. We have an obligation to our customers and consumers to continue to provide the cereals that they know and love.
We have heard from many of our employees that they are under the impression that Kellogg and the union are scheduled to bargain next week. This is not true – there is no further bargaining scheduled and we have no plans to meet. Given that the strike will continue, our focus must continue to be on executing the next phase of our contingency plan.
December 1, 2021
Tentative Agreement Reached with Union
We are pleased to announce that Kellogg Company and the union have reached a tentative agreement for a new five-year labor contract covering 1,400 employees at our U.S. cereal plants in Battle Creek, Mich., Lancaster, Penn., Memphis, Tenn. and Omaha, Neb.
The union has stated that employees will be voting the tentative agreement on Sunday, Dec 5, and we expect to know the results early in the week.
Among other things, the tentative agreement includes an accelerated, defined path to legacy wages and benefits for transitional employees, and wage increases and enhanced benefits for all.
We thank the Federal Mediation and Conciliation Service for their assistance in these negotiations.
November 24, 2021
The union reached out to the Company this morning offering dates to resume bargaining next week. We agreed to meet on Tuesday-Wednesday next week, November 30 -December 1.
November 23, 2021
On Monday, we met again with the union.
We came prepared and presented a concept that provides immediate ‘graduation’ to legacy for all employees with four or more years of service. This concept would also provide a clear path for the remaining employees to graduate.
We are disappointed for our employees that the union was not prepared to reach any agreement nor put our latest proposal to a vote, and that it asked to delay further negotiations to the week of December 6. The Company remains ready and willing and able to meet with the union.
We recognize the hardship that this prolonged strike represents for our employees. After 15 negotiations sessions in 2021 – and no proposals put to membership for a vote – we are left with no choice but to best serve the short- and long-term interests of our customers and consumers by moving to the next phase of our contingency plans.
We will continue to run our plants effectively with hourly and salaried employees, third-party resources, and temporary replacements, and now where appropriate, hire permanent replacements.
Our first choice is to have our employees return to work. We continue to welcome those who choose to return to work, as we have since the strike began. Employees seeking to do so can contact their HR manager (see Return to Work FAQs).
November 18, 2021
The company and the union have agreed to resume bargaining on Monday, November 22. We look forward to getting back to the table and are committed to negotiating in good faith. We remain hopeful that we can reach an agreement soon so our employees can get back to work and back to their lives.
November 11, 2021
The Company’s Last Best Final Offer to the union expired today, Thursday, November 11 at 11:59 a.m. ET. Unfortunately, the union did not allow a vote. There are no further negotiations scheduled.
We have a responsibility to our business, customers and consumers to produce cereal, despite the strike. Operations continue at all four plants with hourly and salaried employees and third-party resources producing food. We are also tapping our global manufacturing network and expertise, and we are currently hiring to fill roles at our plants.
November 9, 2021
Ken Hurley, Kellogg’s Head of Labor Relations and Supply Chain HR, breaks down the company’s Last Best Final Offer and shares the most important takeaways.
“The bottom line is that our proposals address what the union has told us are their primary concerns,” says Ken. “The union does not seem interested in revising its proposals or exploring creative solutions to resolve issues.”
November 6, 2021
We are receiving a significant number of questions about the ability of striking employees to return to work during the strike. We want to ensure all employees that you have a right to work during a strike, and this right is protected by federal and state laws — regardless of what you might be hearing from others.
Click here to read the most common questions and answers about working during the strike, such as “Can I choose to return to work?” and “If I decide to return to work, will it affect my wages, benefits, or seniority rights?” to name a few.
If you have further questions, please contact the HR Manager at your plant.
November 5, 2021
On November 3, Kellogg put forth a compelling “Last Best Final Offer” to the union.
“We asked the union to allow our employees to vote the offer,” said Kellogg Company Chairman and CEO, Steve Cahillane. “The union immediately rejected it and told us they would not put it before employees for a vote. We implore our cereal employees to demand their union put forth the offer for a vote.”
“The union continues to insist on proposals that are unsustainable and unrealistic,” Cahillane added. “They’ve proposed adding costs that would threaten the future success of our plants and cereal business.”
November 3, 2021
Our negotiations have concluded for the day. This afternoon, the company presented a revised offer to the Union.
We are no longer proposing a permanent two-tiered structure. We have offered to continue the current pathway to Legacy wages and benefits, but with significant wage increases for current and future Transitional employees. We’ve proposed maintaining COLA (Cost of Living Adjustment) for Legacy employees. We’ve proposed no changes to current healthcare plans, and in fact, have proposed enhanced benefits for all employees.
The union continues to insist on proposals that are unsustainable and unrealistic. They’ve proposed adding costs that would threaten the future success of our plants and cereal business.
Our proposals include:
- Continuation of current pathway to Legacy wages and benefits for Transitional employees
- Wage increases for all, including:
- 3% upon ratification for Legacy employees, and COLA in the following three years
- $2-$5/hour increases for Transitional employees depending on years of service
- Enhanced benefits for all employees
- Increased pension multiplier for Legacy employees
We’ve consistently addressed what the union has said are their primary concerns.
This is our “Last Best Final Offer” to the union. We asked the union to allow our employees to vote the offer. The union immediately rejected the offer and told us they would not put it before employees for a vote.
The Company remains ready and willing to consider any realistic offers from the union.
Our proposal reflects the contributions of our employees while helping us meet the challenges of the changing cereal business. This offer expires at 11:59 PM, November 11, 2021.
November 2, 2021
The Company and the Union continued negotiations on Tuesday, November 2. The parties exchanged revised proposals. Discussions have wrapped up for the day and will continue on Wednesday. We remain hopeful that we will reach an agreement soon so our employees can get back to work and back to their lives.
October 26, 2021
In response to the Company’s email yesterday, the Union proposed next Tuesday-Wednesday, November 2-3, to resume bargaining. The Company agreed to these dates and we look forward to getting back to the table.
October 25, 2021
For the second time since Oct. 4, just before the Union decided to strike, Kellogg Company reached out directly to union leaders today asking to resume bargaining and suggesting that happen this week.
Our request emailed this morning to union leaders read, “As we have stated from the beginning, the Company is willing to consider any proposals from the Union including proposals that would preserve a pathway for transitionals to legacy wages and benefits. At the end of the day, we have a responsibility to these employees – which is to engage in good faith bargaining toward a replacement agreement that gets them back to work.”
We are hopeful that the Union will respond favorably to our invitation, so that we can resume the process of reaching a new agreement, and returning our employees to work.