Kellogg Workers' 2-Month Strike May Be Coming To An End

Cereal fans and anyone following union activities may have heard about a Kellogg's workers strike that began back in early October, per Insider. The strike started as a result of a wage system that union members viewed as unfair. As workers have grappled with mounting displeasure, Kellog's CEO saw a 20% increase in his compensation, and the company made a higher profit overall in 2020. In response to the strike, the company also started importing cereal from overseas to compensate for domestic setbacks.

It now looks like the end of the strike is in sight. According to CNN, strikers and Kellogg executives have come to a possible agreement for a five-year labor contract that covers about 1,4000 employees in four states. Senior employees can also expect a 3% pay increase plus yearly increases to accommodate changes to the cost of living. A significant hurdle to reaching a resolution has been the treatment of lower-tier employees. If this deal is ultimately accepted, lower-tier employees who've worked for the company for four or more years would move to higher positions. The agreement would also create a way for workers to advance to higher tiers after three years. The future appears bright at first glance, but some issues still lurk beneath the surface.

Some road bumps may still lie ahead

The Kellogg strike hasn't been easygoing for either party. The company's stock fell 5% since the strike (via CNN). And CTV reports that the company filed a lawsuit against striking workers in its Omaha, Nebraska location after union members allegedly blocked entrances to the plan and intimidated replacement workers. But this potential resolution doesn't mean the parties are out of the woods. While union leadership could be ready to sign off on the deal, other members might not vote for it. The potential agreement doesn't offer as much as they had hoped. Some workers have refused to accept previous proposals due to anger over previous compromises and the fact that Kellogg has struggled to replace the striking workers. 

Only time can tell what happens next during this standoff. In the short term, Kellogg's stocks rose 2% after announcing the current progress toward an agreement. While the company sounded optimistic, the ball is now squarely in the court of the union members who will vote on whether to end this dispute.