The negotiations between Kellogg Co and the union representing its US breakfast cereal plant workers fell apart again, two union leaders said on Tuesday, prolonging a strike that started earlier in October.
The workers had gone on strike on 5 October after their contracts expired the previous day, as negotiations over payment and benefits stalled due to differences between the company and about 1,400 union members at Kellogg's cereal plants.
Union members previously said Kellogg proposed a two-tier employment system that did not offer its temporary workers, who make up about 30% of its workforce, a pathway to become permanent workers with better benefits and pay.
An update from the union on Tuesday said it still had to resolve issues relating to the two-tier system and offered to meet again with Kellogg the week of 6 December.
The company did not immediately respond to a request for comment.
The latest setback in negotiations means Kellogg will have to pay temporary workers brought in place of the workers on strike and import cereals to ensure supply, denting the company's profit margin at a time when corporate America is already dealing with soaring expenses.
Earlier this month, the union rejected a revised offer.
Kellogg Co recently warned of a potential hit to full-year earnings from the prolonged strike at its cereal plants in the United States and a global supply chain crunch, even as the packaged foods maker raised its forecast for organic net sales.
News by Reuters, edited by ESM. For more A-Brands news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.