Could Kellogg Memphis plant be in jeopardy of closing?

Could Kellogg Memphis plant be in jeopardy of closing?
Published: Dec. 10, 2014 at 4:42 PM CST|Updated: Dec. 11, 2014 at 1:35 PM CST
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MEMPHIS, TN (WMC) - Memphians love Kellogg's cereal, but the company that makes Corn Flakes, Fruit Loops, Frosted Flakes, and Special K at its Memphis plant says sales are declining.

"I still think cereal is a big deal in people's lives," said Nigel Greer, a Memphis resident. "You have to have breakfast in the morning. It keeps you up, keeps you moving, keeps you motivated."

But Memphis Bakery, Confectionary, Tobacco Workers, and Grain Millers International Union President Kevin Bradshaw confirms a Kellogg Company executive threatened that two plants could close.

The two sides are still mediating after a 295-day employee lockout.

"They're pushing back to try to recoup those sales off the backs of the workers," said Bradshaw. "And they want to take away health care benefits, cut retirement, pension plans for those retirees and their spouses."

The Kellogg Company released the following statement Wednesday:

Kellogg Company and the BCTGM Union – in coordination with the Federal Mediation and Conciliation Service (FMCS) – recently engaged in discussions to address the long-term health of our North American cereal network. Both sides agreed that early master contract discussions were appropriate given the pressing nature of the challenges we face in the category.

We are disappointed that the membership has chosen not to ratify the agreement. We continue to believe that this agreement represents a path forward together to stabilize and sustain our cereal business and allow U.S. RTEC to be more competitive across our Global Supply Chain network. The proposed contract is in the best interests of the company, our employees and the communities in which they live.

The reality is that significant challenges remain – the RTEC category continues to decline and that leaves us with far more production capacity than we need in our U.S. cereal network. While we firmly believe that we can build a sustainable future for this business, we must take steps now to begin that process.

We are evaluating our U.S. RTEC manufacturing network and will work to ensure that we are operating the right number of plants — in the right locations — to better meet our current and future production needs, and the evolving needs of our customers.

For our employees and for this company, we remain committed to the sustainable future of this business and focusing together on producing the high-quality, nutritious foods that give people a better start to their day.

After scaling back production last year, the company says they cannot sustain the current business model. That worries taxpayers.

"There are so many things you can do before you decide to close a plant, because a lot is at stake here," said Memphis resident Isabelle Porter.

"We have a good working relationship," added Bradshaw. "We just look forward to working things out locally and moving forward."

Bradshaw says closure of the Memphis plant could appear to be retaliation for failed negotiations. The Kellogg Company had no comment, if the plant is closing.

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