Kellogg Company Reaches New Tentative Agreement with Union

Rhea-AI Summary

Kellogg Company announced a tentative five-year labor contract with the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union, affecting 1,400 employees across U.S. cereal plants. Key highlights include increased wages, improved healthcare benefits with no costs, enhanced retirement benefits, and no concessions required from employees. The union will vote on the agreement soon, following a strike initiated on Oct. 5 due to failed negotiations. Kellogg aims to finalize the contract to stabilize operations at its facilities in Battle Creek, Lancaster, Memphis, and Omaha.

Positive

• Increased wages for all employees, including across-the-board wage increases and Cost-of-Living Adjustments starting in Year 1.
• Enhanced healthcare benefits where most employees pay no costs for their healthcare.
• Increased pension benefits while maintaining existing retirement plans.
• No concessions required from employees, ensuring they retain all current benefits.

Negative

• None.

BATTLE CREEK, Mich., Dec. 16, 2021 /PRNewswire/ -- Kellogg Company is pleased to announce that it has reached a recommended tentative agreement for a five-year labor contract with the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union and the four local unions representing 1,400 employees at its U.S. cereal plants in Battle Creek, Mich., Lancaster, Penn., Memphis, Tenn. and Omaha, Neb.

"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."

Highlights from the 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.

Kellogg and the union have been engaged in negotiations since Sept. 8 to finalize a master labor contract for its four U.S. Ready to Eat Cereal (RTEC) plants. On Oct. 5, the union decided to strike at all four plants.

The union has stated that employees will be voting the tentative agreement by Monday and the company expects to know the results early next week. This is the second tentative agreement between Kellogg and the union. For a summary of the tentative agreement and regular updates, visit Kellogg's negotiations website at kelloggsnegotiations.com.

About Kellogg Company

At Kellogg Company (NYSE: K), our vision is a good and just world where people are not just fed but fulfilled. We are creating better days and a place at the table for everyone through our trusted food brands. Our beloved brands include Pringles®, Cheez-It®, Special K®, Kellogg's Frosted Flakes®, Pop-Tarts®, Kellogg's Corn Flakes®, Rice Krispies®, Eggo®, Mini-Wheats®, Kashi®, RXBAR®, MorningStar Farms® and more. Net sales in 2020 were approximately $13.8 billion, comprised principally of snacks and convenience foods like cereal, frozen foods, and noodles. As part of our Kellogg's® Better Days purpose platform, we're helping to end hunger and are committed to creating Better Days for 3 billion people by the end of 2030. Visit www.KelloggCompany.com or www.OpenforBreakfast.com.

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SOURCE Kellogg Company

FAQ

What is the new labor agreement announced by Kellogg Company?

Kellogg announced a tentative five-year labor contract with the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union, benefiting 1,400 employees.

When will employees vote on the new labor contract with Kellogg?

The union is expected to vote on the tentative agreement soon, with results anticipated early next week.

What are the key benefits included in Kellogg's new labor agreement?

Key benefits include increased wages, improved healthcare with no costs, enhanced pension benefits, and no concessions from employees.

How many employees are affected by Kellogg's new labor agreement?

The agreement affects 1,400 employees at Kellogg's U.S. cereal plants.

What led to the negotiation of the new labor agreement at Kellogg?

Negotiations began after the union decided to strike on Oct. 5 due to previous contract disputes.