Union Rejects Kellogg's “Last, Best, Final Offer”

It appears no resolution for the cereal giant's 1,400 striking workers is in sight.

Larry Gamble, who has worked at the Kellogg plant for 13 years, and Sharnita Childress, who has worked at the plant for 8 years, picket with other union workers outside of the plant in Battle Creek, Mich. on Oct. 19, 2021.
Larry Gamble, who has worked at the Kellogg plant for 13 years, and Sharnita Childress, who has worked at the plant for 8 years, picket with other union workers outside of the plant in Battle Creek, Mich. on Oct. 19, 2021.
Nicole Hester/The Grand Rapids Press via AP

On Nov. 3, cereal giant Kellogg Company provided an update to its ongoing negotiations with its 1,400 striking plant workers, and it appears no resolution is yet in sight.

The Battle Creek, MI-based food manufacturer said on Wednesday it presented its "Last Best Final Offer” to the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) that represents those workers after negotiations resumed Nov. 2. According to Kellogg's, that offer included significant wage increases for current and future transitional employees, no changes to healthcare plans and enhanced benefits for all employees.

But the company said the union swiftly rejected that offer and told Kellogg's that it would not be voted upon.

The BCTGM provided the following statement on Nov. 4:

The company’s last, best and final offer does not achieve what our members are asking for; a predictable pathway to fully vested, fully benefitted employment for all employees with no concessions.

Kellogg’s continues to insist on takeaways.  The company came to the table insisting that there will only be an agreement if the Union accepts the company proposal exactly as it has been written.  The company’s proposal was filled with conditions and terms as to what was acceptable to Kellogg’s.  These terms and conditions are unacceptable to our members.

Therefore, the BCTGM Bargaining Committee rejected the proposal.  The strike by 1,400 BCTGM Kellogg’s members at the company’s four U.S. cereal plants continues.

Here is Kellogg's full update posted Nov. 3:

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.

I Stock 1134862954 1 61670be80118aiStockThe 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.

See highlights of our Last Best Final Offer here.

Kellogg's workers at four plants in Battle Creek; Omaha, NE; Lancaster, PA; and Memphis, TN have been on strike since Oct. 5. Those plants make various Kellogg's cereals, including Rice Krispies and Apple Jacks. Shortly after the strike began, Kellogg's said it resumed production at those plants with salaried employees and outside workers.

Q3 financials

Amid the labor dispute, Kellogg's reported its 2021 third quarter financial results on Nov. 4, which showed continued year-over-year growth in sales and operating profit. The company's Q3 sales of $3.62 billion increased 5.6 percent year-over-year, with organic sales up 5.1 percent. Operating profit of $447 million jumped 9.1 percent year-over-year, while net profit of $305 million trailed the $352 million of a year earlier.

"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," said Steve Cahillane, Kellogg chairman and CEO. "These business conditions do not get any easier in the fourth quarter, especially with the added challenge of a current labor disruption. However, our underlying business momentum remains strong, particularly for our biggest snacking and frozen foods brands, and for our businesses in emerging markets. And we will continue to navigate through the various supply challenges, with an eye to sustaining balanced financial growth over time."

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