Kellogg, union agree to new 5-year deal

Kellogg Co. and union leaders have agreed to a new contract, avoiding any closure of the Battle Creek-based company's four U.S. cereal plants.

The master agreement covers some 1,300 Bakery, Confectionery, Tobacco and Grain Millers union employees at its facilities in Battle Creek, Omaha, Memphis, Tenn., and Lancaster, Pa. Kellogg said a tentative agreement had been reached July 24.

Under the contract, all four cereal plants will be kept open for the next five years but "we have the flexibility to optimize production lines as the category continues to evolve," Kellogg said in a news release.

The company said the contract "narrows the gap in labor costs at the company's (ready-to-eat cereal) locations across its manufacturing network and in the industry." There will be no retiree health care for new hires, and the contract "includes significant concessions on future healthcare costs." So-called transitional employees "will provide more competitive wages and benefits along with the opportunity to reach regular employee status."

A previous proposal in December was overwhelmingly rejected by employees. The current contract was set to expire Oct. 3.

Alistair Hirst, Kellogg's senior vice president for global supply chain, said in a statement that the company was pleased with the contract.

"This fair and competitive contract recognizes the important work of Kellogg's employees and helps to ensure the long-term success of the company's (ready-to-eat cereal) plants and businesses," he said.

Contact Jennifer Bowman at 269-966-0589 or jbowman@battlecreekenquirer.com. Follow her on Twitter: @jenn_bowman