Over the next few days, members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union will review and vote on the proposal, which the union’s international president Anthony Shelton said in a statement was reached after “many, many hours of extremely hard work.”
Mondelez said the proposed new contracts are “fully recommended by both parties.”
If ratified, the agreement would end a strike that began Sept. 10 when BCTGM union members walked off the job at a Nabisco bakery in Northeast Portland, Ore., to contest what Mondelez described as an effort to “modernize” contracts. Bakery union members in Chicago quickly followed suit Aug. 19 as did employees at Nabisco’s Richmond, Va., bakery, and at sales distribution facilities in Aurora, Colo.; Addison, Ill.; and Norcross, Ga.
At issue were proposals by Mondelez for an alternative schedule for 12-hour days for high-volume production lines, changes to health benefits for new hires and other changes to the current contract that Mondelez CEO Dirk Van De Put acknowledged last week at Barclays Consumer Staples Conference “would not be an easy conversation.”
While details of the most recent offer were not immediately available publicly Sept. 15, Mondelez’s previous offer, which expired Sept. 8, included a $5,000 ratification bonus per employee, an hourly wage increase each year of the proposed contract and no changes to healthcare benefits for current employees. Earlier proposals included allowing the use of temporary employees, which was subsequently withdrawn.
Mondelez’s contingency plan
At the Barclays conference, Van De Put said that Mondelez was “obviously disappointed” with the strikes, but that the company’s goal “has been and always has been and continues to be to bargain in good faith to reach a new contract.”
He explained that the contract changes were proffered with “the intent of sustaining the long-term growth that we see coming from our business, and also make sure that these plans are competitive and a stronghold for us as a company.”
At the same time, he said, the company was prepared for a potential strike and in anticipation “activated a robust business continuity plan with the purpose of continuing to serve our customers and our consumers.”
He explained that the three-prong plan included building inventories before negotiations began, ensuring it could run “key lines” if “not to the same level as before” then in a way where “gradually we will get there,” and finally adjusting the company’s commercial agenda to “minimize the potential stress we would have in our production and distribution system.”
Overall, he said, “that continuity plan is working well.”
Broad impact of strike debated
Strike supporters claimed over social media that they had disrupted production, and that consumers were not buying Nabisco products in support. However, others reported online that grocery stores with a broad selection and amble supply of Nabisco products were simply well-run and that full shelves did not indicate expansive consumer awareness or support for the strike.
In the days immediately before the most recent proposal was made, physical altercations on the picket line were reported – underscoring high tensions and high stakes.
The strike and related discussions come at a time when many food and beverage manufacturers are struggling to hire sufficient staff or are suffering the negative impact of labor constraints at other points in the supply line. This pressure is pushing many companies to offer higher wages and better benefits, while others are looking at other countries for potential long-term relief.
Concern about the latter was also top of mind for Nabisco strikers, who media reported feared displacement if the company moved production outside of the US.
Mondelez is committed to US manufacturing
At Barclays, Van de Put sought to reassure employees and investors by affirming Mondelez’s commitment to US manufacturing.
“We have now concentrated our footprint to be close to plants in the first half of the year. We now have concentrated our footprint on a plant in the East Coast, the Midwest and the West Coast, and … we hope that we can increase capacity through potential capital investment in these three plants,” he said.
However, he added, “we need to remain competitive, and so this discussion is basically about making sure that these plants remain competitive for the future.”
Remaining competitive will require “flexibility to schedule in a different way, so that we get more output from the plants, and basically also improve the execution on a day-to-day basis in the plant,” he added.
During the early days of the pandemic when consumers were stocking their pantries, many CPG manufacturers extended operations and altered schedules to run lines longer and produce more products to meet heightened demand.