The contract includes a commitment from Kellogg to keep all four of its U.S. R.-T.-E. cereal plants open for at least the next five years.

BATTLE CREEK, MICH. — The Kellogg Co. and the Bakery, Confectionery, Tobacco and Grain Millers (B.C.T.G.M.) union on Aug. 1 ratified a new five-year master contract that covers Kellogg’s four ready-to-eat cereal plants in Battle Creek; Memphis, Tenn.; Omaha, Neb.; and Lancaster, Pa. The current contract was scheduled to expire on Oct. 3.

The contract includes a commitment from Kellogg to keep all four of its U.S. R.-T.-E. cereal plants open for at least the next five years. Earlier this year, Kellogg said it was at a “pivotal fork in the road,” and would have no choice but to announce the closing of at least one U.S. cereal plant in the very near future if its challenges continued to go unaddressed.

The master contract ratification vote comes after Kellogg and the B.C.T.G.M. leadership reached a tentative agreement on July 24. Approximately 1,300 employees are covered under the new contract, which will allow the company to further invest in innovation and brand growth.

Alistair Hirst, senior v.p. of Kellogg’s Global Supply Chain.

“We are pleased we were able to work with the B.C.T.G.M. to agree on a contract that helps ensure our U.S. plants will continue to be more competitive in our global manufacturing network,” said Alistair Hirst, senior vice-president of Kellogg’s Global Supply Chain. “For our employees and for Kellogg, we remain committed to the future of this business and focusing together on producing the high-quality, nutritious foods that give people a better start to their day.”

According to Kellogg, the new contract narrows the gap in labor costs at the company’s R.-T.-E. cereal locations across its manufacturing network and in the industry. The contract includes significant concessions on future health care costs, and there will be no retiree health care for new hires. There also will be a new transitional employee classification that will provide more competitive wages and benefits along with the opportunity to reach regular employee status, Kellogg said.

“This fair and competitive contract recognizes the important work of Kellogg’s employees and helps to ensure the long-term success of the company’s R.-T.-E. cereal plants and business,” Mr. Hirst said.

Jethro Head, international vice-president of the B.C.T.G.M. who chaired the union negotiating team together with international secretary-treasurer Steven Bertelli, added, “The five-year moratorium on plant closings provides our members with a sense of security and hope for the future. Additionally, the moratorium offers the strong likelihood of repatriation of production from non-union facilities in North America to B.C.T.G.M.-represented factories.”