Job loss at Kellogg and other cereal makers is tough on Cereal City

BATTLE CREEK, MI - The loss of another 250 jobs at Kellogg Co. is tough on Cereal City USA.

"We're trying to deploy our resources and work with our partners at Michigan Works Southwest to understand the positions that are going to be shed and see if we can help their transition (the affected workers' transition) into jobs after Kellogg," said Joe Sobieralski, chief executive officer of Battle Creek Unlimited.

The regional economic development organization has not yet learned what types of positions will be cut, but he said any loss of jobs is unfortunate and a hardship to area families.

Cereal giant Kellogg Co. announced plans on Wednesday to lay off 250 people as it continues to restructure and try to cut costs.

Sobieralski said he does not know the full impact the job loss will have in Battle Cree, but he said, "They are not production jobs," referring to the jobs of workers involved in food production.

Kellogg, the maker of Corn Flakes, Special K, Froot Loops, Mini-Wheats and other cereals, said the cuts are part of a multi-year restructuring effort and they will happen throughout North America. But most will occur in Battle Creek, the company says.

It is part of an industry-wide downturn, he said.

Over the last several years, sales of cold, ready-to-eat cereals have declined and that has put pressure on cereal makers, including Kellogg, the world's largest cereal maker, to cut costs as they try to find ways to expand cereal sales.

Pundits offer various reasons for the decline. Among them is the assertion that more health-conscious people have pulled themselves and their children away from cereals, many of which have had a high sugar content. Others suggest the millennial generation does more snacking in the morning, that more people prefer hot food options, and that cereal isn't the first breakfast choice of some ethnic groups.

Kellogg's Jan. 18 announcement was the third recent announcement of cereal industry job cuts in Battle Creek. In a press release, Kellogg said it is focused on eliminating work that doesn't drive the highest returns and becoming more efficient by removing a duplication of work within the company."

"It's encouraging that the company is making moves to make itself more profitable in an ever-changing market," Sobieralski said. But he said, "It's unfortunate. This is announcement No. 3. The cereal industry is just down overall and it hits a lot more close to home because Battle Creek is home to three production facilities and one is a headquarters."

He referred to Post Holdings Inc., Treehouse Foods Inc. and Kellogg, whose world headquarters is in downtown Battle Creek.

Kellogg did not provide a current count of its local employees but said it had 2,300 to 2,500 employees there in November of 2013 when it launched its cost-cutting initiative. Of those, 100 to 200 positions were expected to be cut at that time.

Ready-to-eat cereal maker TreeHouse Foods, of Oakbrook, Ill., announced in November plans to eliminate 100 of the 160 production jobs it has in Battle Creek over a 15-month period, starting this month.

The company said it plans to close a plant in British Columbia and reduce its manufacturing efforts at 150 S. McCamly St. in Battle Creek. The Battle Creek Enquirer reported that the two plants were among 32 facilities that Treehouse acquired early in 2016 as part of a $2.7 billion deal with ConAgra Foods.

St. Louis-based Post Holdings Inc. announced in mid-December that will shift some of the cereal production work from its huge operation at 275 Cliff St. in Battle Creek, where it employs 569 workers, to other facilities in its U.S. manufacturing network. Among other things, the company makes Honeycomb, Honey Bunches of Oats, Grape-Nuts and Malt-O-Meal.

The shift is to happen in 2017 and will be accomplished largely through retirements, attrition and by making no new hires here, the company has said. Sobieralski said it was feared that up to 150 jobs would be lost but the total number may be anywhere from 40 to 70.

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