No Agreement Reached in Memphis RTEC Plant Negotiations
Company Makes Tough Decision to Initiate Lockout to Protect Plant’s Future

Since Sept. 17, 2013, Kellogg Company and the Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM) union in Memphis have been engaged in negotiations to finalize a supplemental contract for the Memphis Ready-To-Eat Cereal (RTEC) plant, which employs approximately 220 hourly employees.

After weeks at the bargaining table, the Union, regrettably, indicated they were not willing to agree to the Company’s key proposals – which would protect the wages and benefits of all current employees, and still offer above-market wages for future hires. Negotiations stalled and the contract expired at 12:01 a.m. on Oct. 20.

Reaching a fair and competitive contract in Memphis is a critical factor in the sustainability of our Memphis plant, and Kellogg made the tough decision to implement a lockout, effective 7 a.m., Oct. 22.

“It is frustrating and disappointing to be in this spot, but we can’t continue with the current cost model,” said Marty Carroll, Sr. Vice President, Kellogg North America Supply Chain. “We are operating in a tough cereal category and the labor costs at our U.S. RTEC plants – including Memphis – put Kellogg at a competitive disadvantage, making it difficult to fund critical efforts such as innovation and brand building.”

Kellogg’s labor costs in our U.S. RTEC network are significantly higher than our industry competitors, or even our own manufacturing network.

“Every day that Memphis operates under the old contract widens that competitive gap and puts our Memphis plant at risk – a risk we aren’t willing to take for our employees, the Company or the Memphis community,” said Carroll.

Kellogg is hopeful that an agreement is within reach, and remains available to meet with the Union to address concerns or answer questions in an effort to reach an agreement on our Last/Best Offer or consider any proposals from the Union.

“We have worked hard at the table to offer fair and competitive proposals that recognize the important work of our employees,” Carroll said.  “We are confident our Memphis plant could be competitive in our North American manufacturing network and positioned for long-term success.”

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