If you’re a cereal person, you may have eaten your Kellogg (NYSE:K) breakfast in peace this morning, but out at the company’s Memphis, Tennessee, plant, the scene is anything but serene. The New York Times shone a spotlight on Kellogg workers’ ongoing labor battle on Monday.
The publication detailed how it has now been more than three months since the food manufacturing company initially locked out close to 225 of its workers, barring them from returning to their jobs until their union agrees to a new contract. Kellogg employees have kept busy by organizing demonstrations and wearing picket signs, but the brutal winter and ongoing stalemate have left both Kellogg and its workers more exasperated than ever.
Unsurprisingly, the deadlock in Memphis orbits around the wages that Kellogg is currently paying its workers and what level the company wants to aim to pay employees in the future. According to the Times, the company and workers agree that the current pay and benefits are good, averaging $28 per hour with the workers not having to contribute toward their health insurance premiums.
Down the line, Kellogg wants to expand a group of temporary workers into what would be a permanent lower rung of employees who would earn $6 per hour less than their counterparts, and those are the plans that the 225 workers are currently combatting.
Kellogg employees see their employer as another American company working to chip away at its middle-class workers’ pay and benefits, while Kellogg see itself its as corporation that simply cannot sustain itself by paying its workers at the level it currently does. The Battle Creek, Michigan-based company maintains that it now pays its workers above-market wages, and if Kellogg wants to stay competitive, it has to reevaluate its current cost structure.
Enter a lower tier of employees that would become permanent and have far less generous benefits than their upper-level counterparts. Kellogg believes that it has no choice but to implement new pay plans, especially now that customers’ cereal consumption is down and the company is struggling. Some of Kellogg’s workers continue to disagree, and that’s why the company turned to a lockout three months ago, seeing no other way to win concessions.
The Times reports that by banking on a lockout to win approval of new contracts, Kellogg joins the ranks of several other American companies that have employed the tactic to force employees to accept reduced blue-collar compensations packages. Caterpillar (NYSE:CAT), Boeing (NYSE:BA), and Detroit’s automakers have also turned to similar measures in recent years, but Kellogg is a food and beverage company whose treatment of its workers was once lauded, and now it is evident that the tables have turned.