BE AWARE OF THE RIPPLE EFFECT

Part of being vigilant and protecting your own job is to be aware of your environment. The closure of a single large plant can have a ripple effect in the community as people are laid off and either reduce their spending for non-essentials or simply move away to pursue opportunities in other communities.

The hardest hits are the direct subcontractors and vendors to the closed plant whose loss of business or inability to collect on their overdue accounts might result in layoffs of their own.

The next hardest hits are the restaurants, convenience stores, and personal service vendors located in proximity to the stricken plant or on the main roads leading into the plant. Furniture and electronics stores are also impacted. Large box discount retailers often see a drop in total business that is sometimes offset by new customers trading brand-name shopping and convenience for lower prices. 

Be continually aware of what is happening in your state, industry, company, and community and their potential impacts they may have on your employment.

NO LOVE AT KELLOGG’s (08/07/2024)

AUGUST 7, 2024 — 550 EMPLOYEES TARGETED IN 2025 AND 2026

The company has announced that it is closing its Omaha, Nebraska, cereal plant by the end of 2026 and downsizing its Memphis, Tennessee, cereal plant starting in 2025, to consolidate its operations in newer facilities. The reorganization plan will result in a net loss of 550 jobs.

OCTOBER 3, 2023 — KELLOGG’S BREAKS INTO TWO PARTS

Kellogg officially split into two separate, publicly traded companies, Kellanova, which kept the "K" ticker symbol and is focused on snacks and other foods, while WK Kellogg, with the ticker symbol "KLG," is home to the traditional cereal brands.

Look for personnel disruptions as the companies coalesce into separate entities.

JUNE 21, 2022 — MASS CARNAGE AHEAD AS KELLOGG’S BREAKS INTO THREE COMPANIES

Kellogg Company announced that its Board of Directors has approved a plan to separate its North American cereal and plant-based foods businesses, via tax-free spin-offs, resulting in three independent public companies, each better positioned to unlock their full standalone potential. The three companies, whose names will be determined later, would be the following:

"Global Snacking Co.", with about $11.4 billion* in net sales, will be a leading company in global snacking, international cereal and noodles, and North America frozen breakfast, with iconic, world-class brands and strong underlying growth momentum and profitability;

"North America Cereal Co.", with about $2.4 billion* in net sales, will be a leading cereal company in the U.S., Canada, and Caribbean, with a portfolio of iconic, world-class brands and compelling opportunities for investment and profit growth; and

"Plant Co.", with about $340 million* in net sales, will be a leading, profitable, pure-play plant-based foods company, anchored by the MorningStar Farms brand, with a significant opportunity to capitalize on strong long-term category prospects by investing further in North America penetration and future international expansion.

• The Company plans to separate into three independent companies, by spinning off its U.S., Canadian, and Caribbean cereal and plant-based businesses, which collectively represented approximately 20% of its net sales in 2021

• The remaining business, which represented about 80% of net sales in 2021, is focused on global snacking, international cereal and noodles, and North America frozen breakfast

• This transaction represents another bold action toward transforming Kellogg's portfolio to further enhance performance and value

• The proposed separations create greater strategic, operational, and financial focus for each company and its stakeholders, and will build on Kellogg's current momentum

More information can be found in Kellogg’s press release.

DECEMBER 22, 2021 — STRIKE OVER

The 1,400 striking Kellogg's employees have voted to ratify a tentative labor contract that provides immediate, across-the-board wage increases and enhanced benefits for all employees at the company's four U.S. cereal plants.

DECEMBER 12, 2021 — KELLOGG’S THREAT TO UNIONS: WE WILL REPLACE 1,400 WORKERS.

Financial publications are reporting that the company is threatening to permanently replace 1,400 striking workers at factories in four states: Michigan, Nebraska, Pennsylvania, and Tennessee.

Disputes over pay, benefits, and the prospect of more jobs being moved to Mexico, are the main issues of the ongoing negotiations.

According to Chris Hood, president of Kellogg North America, “We have made every effort to reach a fair agreement, including making six offers to the union throughout negotiations, all of which have included wage and benefits increases for every employee. It appears the union created unrealistic expectations for our employees.

“The prolonged work stoppage has left us no choice but to hire permanent replacement employees in positions vacated by striking workers. These are great jobs and posting for permanent positions helps us find qualified people to fill them. While certainly not the result we had hoped for, we must take the necessary steps to ensure business continuity. We have an obligation to our customers and consumers to continue to provide the cereals that they know and love.

OCTOBER 27, 2021 — 73 LAYOFFS IN MARIEMONT, OHIO

The company has announced that a “reallocation of production in its snacks network” is responsible for the layoffs of 73 employees at its Mariemont, Ohio bakery operation. The layoffs will occur between December 20, 2021, and January 1, 2022.

SEPTEMBER 3, 2021 — 212 LAYOFFS IN BATTLE CREEK, MICHIGAN

The company has announced plans to cut 212 jobs at its Battle Creek facility by the end of 2023, including 174 hourly and 38 salaried jobs.

According to a company spokesperson. “While this is the right thing to do for the business, any decision that impacts people is incredibly difficult. We are committed to helping our talented and dedicated employees, and we are devoted to working with them and their union to ensure they have outplacement assistance, resources, and support through this transition.”

"After very careful consideration and detailed analysis, we have presented a planned reallocation of cereal production across our RTEC [ready-to-eat cereal] Americas network. If these plans are finalized, they will deliver significant savings that could be reinvested into the business to drive growth and help to regain share. These plans build on the streamlining efforts announced in 2017, some of which were previously completed."

Some believe that the announcement may be linked to union negotiations with the present contract expiring October 5, 2021.

FEBRUARY 19, 2021 — 250 LAYOFFS IN CINCINNATI, OHIO.

The company has announced that it will be shutting down two production lines at its Mariemont facility, resulting in 165 layoffs.

The sale of its Keebler and Famous Amos brands to Ferrera Co. will result in 65 layoffs as local production is ended.

These changes will result in another 20 layoffs of salaried support workers.

According to a company spokesperson, “While this would be the right thing to do for the business, it is never an easy decision to make when people are impacted. When the planned changes are complete, the plant will continue to produce a number of Kellogg cracker brands."

AUGUST 9, 2019 KELLOGG TO LAYOFF 108 FROM FROZEN FOODS PLANT

The company has announced that it will lay off 108 employees at its frozen foods plant in Atlanta by October 2019. This should come as no surprise to employees who were previously notified.

A company spokesperson speaking about the 2018 layoff announcement noted, “At that time, we announced our intent to close our Atlanta plant, as it does not allow for cost-effective expansion and growth of the business. The closure should be complete by Q4 2019 and will result in 108 layoffs. This decision is the right thing to do for our business; it is never an easy decision to make when people are impacted.”

The closure is part of the Company’s Project “K” initiative which involves consolidation, cost-cutting, and other productivity initiatives.

APRIL 2, 2019 KELLOGG’S DIVESTS SNACK COOKIE BUSINESS

Kellogg’s has announced plans that they are selling their Keebler, Famous Amos, and fruit snacks businesses to Ferrero, the owner of Nutella, for $1.3 billion in a deal that will close in July 2019.

The deal will include 6 domestic (U.S.) food manufacturing facilities and the responsibility for a leased manufacturing facility in Baltimore, Maryland.

According to Kellogg’s CEO, Steve Cahillane, "Divesting these great brands wasn't an easy decision, but we are pleased that they are transitioning to an outstanding company with a portfolio in which they will receive the focus and resources to grow."

This will be a dangerous period for employees as the new owner restructures to consolidate operations, eliminate duplicate functions and redundant employees, and cuts additional costs by reducing the workforce.

FEBRUARY 8, 2019 — ADDITIONAL LAYOFFS IN BATTLE CREEK.

Kellogg has announced that they would be cutting 79 positions nationwide, 67 in Battle Creek, in support of their North American division. Also mentioned was the potential sale of their fruit snack and cookie business.

These layoffs are in addition to the 30 positions lost in November 2018.

SEPTEMBER 3, 2017 — Original post …

Battle Creek, Michigan-based Kellogg’s has announced that they would be laying off at least 223 workers in its Battle Creek facility as well as mothballing two production lines which may be reinstated if demand grows. Unfortunately, that is only one part of the equation as Kellogg’s restructures its operations. According to published estimates for the large cereal maker, 11,000 people may find their jobs in jeopardy as Kellogg’s becomes “focused on eliminating work that doesn’t drive the highest returns.” Ohio lost 250 jobs, Tennessee lost 175, North Carolina lost 500, New York lost 300, and 219 lost their jobs in Minnesota. Employees outside the United States are also being affected by company-wide retrenching.

Jobs are becoming a greater political issue, especially among Democrats like Senator Robert P. Casey Jr. (D-PA) who is requesting that Kellogg provide more specific details about future job losses in Pennsylvania. Even if the company provides a perfunctory response, it is another “talking point” that can be used when campaigning.  

WHY?

According to the New York Times …

“For the last decade, the cereal business has been declining, as consumers reach for granola bars, yogurt, and drive-through fare in the morning. And the drop-off has accelerated lately, especially among those finicky millennials who tend to graze on healthy options — even if Cheerios and some other brands come in whole-grain varieties fortified with protein now.”

“Cereal consumption peaked in the mid-1990s, according to the NPD Group, a consumer research firm. Still, some 90 percent of American households report buying ready-to-eat cereal, which remains the largest category of breakfast food with some $10 billion in sales last year, according to Euromonitor, down from $13.9 billion in 2000. And the consumer research firm estimates sales will fall further this year to $9.7 billion.”

You may wish to read the New York Times article in its entirety to get a feel for the buying habits and demographics of a rapidly changing and declining market.

This should come as no surprise to readers as per our blog post, “Getting My Cereal Faster With Outsourcing” which appeared on July 10, 2017.

Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?

POLITICS: KILLING THE GOLDEN GOOSE

The two greatest threats to our communities, states, and our nation are political corruption and the rise of the self-serving “professional politician.”

Politics is not a “team sport” where you support and root for one side, but a serious business that can affect your life and future. It has been often said that the wisest course of action is to vote, not for your political party and not for activist-led special interests, but for the prudent, common sense, politician who understands that government is not and should not be a self-perpetuating business putting its own existence and needs before the needs of the people they purport to serve.

Here in the formerly golden State of California, we see a perilous precedent develop in California’s legislature with the introduction and promotion of Assembly Bill A.B. 1250 which affects “Counties: Contracts for Personal Services.”

Mostly this bill is designed to prevent counties from contracting services to those best qualified in the private sector in favor of keeping these jobs within the government and staffed by unionized workers whose salaries, perks, medical, and pensions are slowly bankrupting government entities on all levels: local, state, and national.

Proposed Law: AB 1250 would establish standards for the use of personal services contracts by counties, specify contractor disclosure requirements, and identify circumstances under which a county may contract for services. My comments appear in [brackets.]

Specifically, this bill would do the following:

"Prohibit a county from contracting for personal services currently or customarily performed by that county’s employees unless it makes specified findings, and all of the following conditions are met:

• The board of supervisors demonstrates that the contract will result in cost savings for the duration of the contract, as compared with the county’s actual costs of providing the same services. [Since many of the government's costs are artificially created, it may be impossible to verify the underlying data or methodology of computing such costs.]
• Contract proposals are not solely based on savings related to lower contractor pay rates or benefits, and contractor wages are at the industry’s level and do not undercut county pay rates. [This provision keeps wages artificially high and at the level of county workers to eliminate any significant cost savings to perform the work in the private sector.]
• The contract does not displace county employees, as specified, or cause vacant positions to remain unfilled. [This is nonsensical because the goal is cost-savings beneficial to the taxpayers and not a full employment opportunity act for unionized government workers.]
• Contract savings are large enough to ensure they will not be eliminated by normal cost fluctuations, the amount of savings clearly justifies the size and duration of the agreement, and the potential for future economic risk to the county from rate increases is minimal. [There will always be some form of adjustment that must be made to deal with unforeseen economic circumstances like the shortage of materials, etc.] 
• The economic advantage of contracting is not outweighed by the public’s interest in having a function performed directly by county government. [The public is not well-served by overpaid and non-productive government workers who are immune from being fired for malfeasance and incompetence.]
• The contract is with a “firm,” it may be terminated by the county for material breach, it is awarded through a public competitive bid process, and it includes provisions pertaining to the qualifications of the staff that will perform the work. [It is amazing that the qualifications to perform work do not similarly apply to government workers, many of whom are grossly unqualified for the jobs they hold.]"

Of course, the politicians who introduced the legislation saw fit to exempt the City and County of San Francisco from the bill’s provisions and ensure that the legislation does not impact current government services.

“Specify that the bill does not apply to contracts for architectural or engineering services, public transit, street sweeping, solid waste hauling, or construction, alteration, demolition, installation, repair, or maintenance work that is considered a public works project.”

For those wishing to read AB 1250 in full and in context, it can be found here.