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Kellogg Workers Approve Buyout Package

October 6, 1995

BATTLE CREEK, Mich. (AP) _ Kellogg Co.’s plan to eliminate more than 1,200 jobs by offering enhanced retirement benefits or cash buyouts was easily approved by unionized hourly workers, officials said Friday.

Workers in five states were eligible to vote, and 88 percent accepted the deal negotiated by Kellogg and the American Federation of Grain Millers, Larry Jackson, the union’s president, said in Minneapolis.

The maker of such cereals as Kellogg’s Corn Flakes and Rice Krispies says it needs to cut costs. Kellogg has said its share of the ready-to-eat cereal market has declined to 36 percent from more than 40 percent in the late 1980s.

Kellogg spokesman Anthony Hebron said the company was pleased with the vote.

``We always strive to treat our people fairly,″ he said. ``This is a difficult action we have to take to remain competitive for the long term.″

The agreement allows some workers to retire early. Employees already eligible for retirement could choose a $42,000 payment or $750 a month until they qualify for Social Security.

Workers who don’t fall into either retirement category could resign and take $42,000.

Kellogg wants to cut 745 jobs in Battle Creek and about 500 more at production sites in Memphis, Tenn., and San Leandro, Calif. The California factory will close by December.

If Kellogg doesn’t meet its target through retirements or resignations, workers lowest on the seniority ladder would be told to leave. They would still qualify, however, for a $42,000 payment or they could seek a transfer to another location.

``I have 23 years in,″ said Theresa Elwell, secretary of Grain Millers Local 3 in Battle Creek. ``I may have the risk of being put on a different shift but I believe I’ll still have my job.″

More than 3,500 union members were eligible to cast ballots this week in Michigan, Tennessee, California, Omaha, Neb., and Lancaster, Pa.

Although there are no cuts planned in Nebraska or Pennsylvania, workers there could take the enhanced retirement offer, Elwell said.

The company wants all retirements, resignations and transfers in place by September 1996. Health insurance would be extended to June 1997.

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