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Kellogg reaches tentative agreement with striking union workers
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Kellogg reaches tentative agreement with striking union workers

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[NFA] Thousands of unionized workers are striking across the U.S., demanding higher pay, as rising prices and labor shortages squeeze American employers. This report produced by Zachary Goelman.

Kellogg Co. announced Thursday that it has reached a tentative agreement with striking union workers at the company’s cereal manufacturing plants.

Dan Osborn, president of the Omaha chapter of the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union, confirmed Thursday that union members will vote on the five-year labor deal Sunday.

The vote will occur on the two-month strike anniversary for 1,400 workers, including about 480 in Omaha, at the company’s cereal manufacturing plants in Omaha; Battle Creek, Michigan; Lancaster, Pennsylvania; and Memphis, Tennessee.

Union workers have been on strike since Oct. 5 following the expiration of the previous collective bargaining agreement with the company.

The tentative agreement addresses the two-tiered system of wages that had been a sticking point for the union. The system gives newer workers less pay and fewer benefits and it includes up to 30% of the workforce at the plants.

According to Kellogg, one of the provisions of the agreement includes 3% wage increases for so-called "legacy" employees and cost of living adjustments thereafter.

Wage increases also are included for transitional employees — meaning those who were hired after the previous agreement was reached in 2015. Those who have been with the company for four or more years would immediately graduate to the "legacy" tier. The company said additional workers would move up in the later years of the contract.

Under the previous collective bargaining agreement, Osborn said new union employees at Kellogg’s started with an hourly wage of about $19.50 with no guaranteed pay raises based on the number of years of employment. Under the proposal, new hires would make a starting wage of $22.76, which includes a $1.80 cost of living adjustment.

The $22.76 starting wage represents a 16.7% increase over the previous starting wage. In each subsequent year, transitional employees would get a 90-cent pay raise.

480 Kellogg employees in Omaha still on strike as union rejects company's final offer

The proposed contract also maintains workers' current health benefits, the company said.

Based on what he’s seen, and noting he hasn’t yet parsed the proposed deal with the negotiating team, Osborn, who has worked as a mechanic for 18 years at the Omaha plant, views the deal as a mixed bag. He said employees who specialize in skilled trades, namely mechanics and electricians, didn’t get the raises originally sought.

“That concerns me because I know at the plant level we’ve struggled being able to fill our numbers with trades people,” he said. “That leaves us short and that causes a problem when it comes to production and having enough people to work on the machinery.”

Osborn said he knows of three electricians and a couple of mechanics who won’t return to the Kellogg plant located at 9601 F St. because they found other jobs.

Osborn also has questions about the two-tiered system as modified in the proposal.

“It looks like they’re basing everything off of a headcount. It does provide a clear path for transitionals to move into the upper tier,” he said. “It looks like, on average, it should be about 15 people a year who move up. If you’re just getting hired and you have 150 people above you, it’s still going to take you a considerable amount of time to move up.”

The union held out for higher wages after employees worked long hours over the past 18 months to keep up with demand during the coronavirus pandemic. Workers believed that the ongoing widespread worker shortages across the country gave them an advantage in the negotiations.

The Federal Mediation and Conciliation Service was involved in the latest round of negotiations between Kellogg’s and the union.

Until a proposed contract is ratified, Osborn said striking workers will continue to picket outside the plant. If the proposal is ratified, Osborn said there will be a transition period of less than a week before union employees return to work.

The transition period will include the company no longer using replacement workers and striking workers to take down the enclosures they have set up around the plant.

In another recent strike, more than 10,000 Deere workers secured 10% raises and improved benefits before returning to work last month.

This report includes material from The Associated Press.


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