Kellogg to use salaried staff, 'third-party resources' to restart plants

Deena Shanker
Bloomberg

Kellogg Co. is preparing to restart production at four U.S. cereal plants where output has come to a halt as workers strike for better pay and benefits.

The facilities are in “various stages of preparing for startup,” Kellogg spokesperson Kris Bahner said in an emailed statement. The company didn’t say specifically when production would resume. “We are implementing contingency plans to mitigate supply disruptions, including using salaried employees and third-party resources to produce food.”

Workers from a Kellogg's cereal plant picket along the main rail lines leading into the facility on Wednesday, Oct. 6, 2021, in Omaha, Neb.

The strike was called this week by about 1,400 workers at plants in Battle Creek; Omaha, Nebraska; Lancaster, Pennsylvania; and Memphis, Tennessee. Those locations produce cereals including Rice Krispies, Raisin Bran, Froot Loops, Corn Flakes and Frosted Flakes.

Kellogg has struggled to meet pandemic-heightened demand for its cereal. In February, Chief Executive Officer Steve Cahillane said the company was having trouble making enough Frosted Flakes, and in May, said the product remained among the cereal brands that were “bumping up against capacity.” The company is scheduled to report third-quarter earnings on Nov. 4. 

The work stoppage follows recent strikes at Mondelez International Inc.’s Nabisco bakeries and PepsiCo’s Frito-Lay plants. Despite bringing in other employees and supervisors to continue making snacks, production at Mondelez’s plants dropped during the strike.

David Woods, International Secretary-Treasurer of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, said the company may have trouble running the facilities without regular employees. “These are not easy machines to run,” he said.  

Kellogg says this is the first time its U.S. cereal workers have gone on strike since 1972. 

But after a difficult 18 months, which saw many workers putting in 12-hour shifts and mandatory overtime to meet pandemic demand, employees are in no mood to compromise.

“We’re drawing a line in the sand,” said Rob Long, a production mechanic who has worked at Kellogg’s Omaha plant for 11 years. Kellogg workers are also striking in Michigan, Pennsylvania and Tennessee.

Long said he and others are upset about a two-tiered system of employees that gives fewer benefits and less pay to newer workers, creating a wedge within the ranks. Long said the company wants to get rid of a provision that currently caps the lower tier of workers at 30% of the workforce.

Associated Press contributed.