BATTLE CREEK, Mich. — After dozens of union members walked out to strike at the Kellogg Company in Battle Creek on Tuesday, economists warn of the negative economic impacts that could occur in the future.
While standing up for their beliefs is important, economist and Grand Valley State University Supply Chain Management Director Brian Long said this may hurt the cause in the long run.
Supply shortages around the world have strained the food industry, causing shipping delays and lost revenue. But, that's not all that has been impacted.
"Their jobs are in jeopardy because they are working for a declining industry," Long said. "They have to come back and adjust to the idea that the company is just not the same company that it was 50 years ago."
In the cereal company’s second-quarter earnings report from August, their CEO said their sales are actually up, despite the supply shortage. Union workers argue the executives have no reason to take away protections they've had for decades.
According to the Bakery, Confectionery, Tobacco Workers and Grain Millers Union, which represents the employees, workers are hoping to increase their pay to a living wage and improve their benefits.
This isn't actually the case, Long said. This year's growth is due to people working from home. Now that people are heading back out, he predicts their sales will reverse.
"The supply chain is gradually adjusting to these kinds of changes, but it's taking time," he added. "It's erroneous on the part of the Union to think that they are going to continue to have that same market that they've had, that was generated by the pandemic. I know they see the higher numbers now, but those numbers are not probably going to be there in the future."
Consumers don't need to worry just yet about the union strike, he added. There is no need to hoard cereal or worry about increasing prices. That is way down the line and likely won't happen in the near future, he said.
"It's not a major factor as far as the local economy is concerned, what would be a major factor is if the company were to close the plant altogether," he said. "But at some point, we do face a world market for just about everything right now. And as I said, the company has to minimize its loss, the loss leader that they have right now is priced cereal."
The best way to move forward is for the workers to compromise with the company, as a lower-paying job is better than no job, he said.
"So I'm hoping, as I said, that they will be able to reach some kind of agreement that will allow the company to carry forward, not at the capacity that they were in the past, and not being able to hand out the benefits, like they have been in the past but nonetheless, keep the company going," he added. "The company is asking for the union's help on that and I hope that they will be forthcoming as well."
Both Kellogg and the union said they want to negotiate, so the future of the economy could depend on how long the strike holds out.
It's not just in Michigan. Kellogg's workers are also on strike at plants across the country.
Operations have stopped at the company's plant in Memphis, Tennessee, after 300 workers there went on strike. Union representatives say they'll strike as long as needed until their contract negotiations are met.
In Omaha, Nebraska, 500 union employees of the Kellogg plant walked off the job. The union president there says they're fighting for a liveable wage.
Workers are also striking at Kellogg's plant in Lancaster, Pennsylvania. At all four plants, there are about 31,000 employees.
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