About 1,400 Kellogg Co. K -0.79% workers rejected a tentative agreement between their union and the cereal company, extending a strike at four plants where Frosted Flakes, Froot Loops and other consumer brands are made.
Kellogg said Tuesday that it was disappointed the agreement was rejected and that it planned to hire full-time employees to replace the ones that are striking.
“While certainly not the result we had hoped for, we must take the necessary steps to ensure business continuity,” a Kellogg spokeswoman said.
Workers at Kellogg have been on strike for two months, demanding better pay and enhanced benefits after working longer hours during the pandemic. They are also upset over a two-tiered system of pay in which newer employees are paid less than veteran employees and have to pay more for health insurance.
According to Kellogg, the tentative agreement that was rejected included more benefits for all employees and a way for newer workers to earn higher wages after four or more years.
The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which represents the Kellogg workers, said it doesn’t comment on why its members accept or reject contracts.
“The membership voted to continue the strike,” said a spokeswoman for the union.
The Kellogg strike comes as more employees feel empowered to demand better pay and benefits because they believe they have the upper hand amid a nationwide labor shortage and more than 11 million job openings. Some workers also want higher pay after working long hours throughout the pandemic to produce packaged food or products.
In October, 10,000 Deere & Co. workers went on strike for five weeks, the first strike at the tractor maker in 35 years. The strike ended in November after workers approved a new six-year contract that gave them an immediate 10% raise and an $8,500 bonus, plus 5% pay raises in 2023 and 2025. Bonuses amounting to 3% of workers’ annual pay will be awarded in the three other years.
The Kellogg strike has been going on since Oct. 5 at four cereal plants in Battle Creek, Mich., Lancaster, Pa., Omaha, Neb., and Memphis, Tenn.
In late October, seven U.S. senators, including Bernie Sanders (I., Vt.) and Elizabeth Warren (D., Mass.) sent a letter in support of the strikers to Kellogg CEO Steve Cahillane.
Last month, Kellogg said the strike and supply chain issues would raise costs for the company. Kellogg, which has been experiencing higher demand for its snack foods, said it expected organic net sales to rise 2% to 3% in fiscal 2021, up from the company’s previous expectations of 1% growth.
Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
