Shares of Kellogg (K) - Get Kellogg Company (K) Report edged lower on Wednesday a day after production at its U.S. cereal plants halted as roughly 1,400 workers went on strike over wage and benefit issues.
Workers struck over matters including the loss of premium health care, holiday pay and reduced vacation time, according to media reports.
Shares of Kellogg at last check edged 0.5% lower to $63.68.
The strike includes plants in Omaha; Memphis; Battle Creek, Mich., the company's headquarters city; and Lancaster, Pa.
Production workers at Kellogg have been putting in 12-hour shifts, seven days a week to keep up production during the pandemic despite limited staff, Daniel Osborn, president of the local union in Omaha, was quoted as saying.
"The level we were working at is unsustainable,” Osborn said.
Contract negotiations between the union and Kellogg’s have stalled for more than a year.
Union officials also were quoted as saying that the company has said it would move some jobs to Mexico if the workers don't accept its offer.
“A lot of Americans probably don’t have too much issue with the Nike (NKE) - Get NIKE, Inc. (NKE) Report or Under Armour (UAA) - Get Under Armour, Inc. Class A Report hats being made elsewhere or even our vehicles, but when they start manufacturing our food down where they are out of the [Food and Drug Administration] control and [Occupational Safety and Health Administration] control, I have a huge problem with that,” Osborn told the Associated Press.
Osborn said he expected the company to try to bring nonunion workers into the plants to try to resume operations and maintain the supply of its products.
The maker of Frosted Flakes and Fruit Loops says its offer is fair and would increase wages and benefits for its employees. Kellogg workers made an average of $120,000 a year last year, the company said.
"We are disappointed by the union’s decision to strike. Kellogg provides compensation and benefits for our U.S. ready to eat cereal employees that are among the industry’s best,” Kellogg spokesperson Kris Bahner said in a statement cited by AP.
Corporate America is dealing with a record labor shortage in the world's biggest economy. Nearly 11 million positions were unfilled as of the end of July, the most since December 2000, the Labor Department said in its monthly Job Openings and Labor Turnover Survey, published in September.