Workers feel crunch as Kellogg factory closes

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The sweet smell of cereal and well-paid jobs will no longer blow over the east end of London, Ontario.

The recently announced closing of London’s Kellogg cereal plant is yet another grievous event in London’s ongoing history of deindustrialization. If this closure does not spur public policy makers into serious action, then job losses will get much worse. This problem has been growing for a long time.

London was a city whose residents once made a vast array of manufactured products including phones (Northern Telecom), light bulbs (Phillips Electronics), locomotives (Electromotive), auto parts (Bendix, Formrite, Tecumseh Products and Siemens to name a few), siding (Vytec), sonar (Sparton of Canada), candy and cookies (McCormick’s/Betabrands), aircraft (Diamond Aircraft) and cars (Ford). It will now also be a city that used to make 27 different brands of Kellogg cereal. The former plants mentioned here have been lost since the early 1990s. Younger Londoners -- especially those under age 30 -- will unfortunately have never heard of them.

Much will be insinuated about how the union representing Kellogg workers caused this closure. The Bakery, Confectionary, Tobacco Workers and Grain Millers International Union is not especially demanding and nobody wants the Kellogg plant to stay open more than the union’s leaders and members.

Some hard questions about this closure should instead be posed to the people who actually triggered it: Kellogg’s senior management, starting with CEO John Bryant.

What will happen to the Kellogg workers? They will likely go through a process called adjustment that will be funded by the provincial government, and perhaps partly by Kellogg.

Displaced workers will be taught how to do things like write a resume, conduct a job search, get through an interview and complete job testing. They will be quite firmly encouraged to try and get over the loss of their livelihoods and accept the grim realities of the contemporary labour market.

These workers will quickly find that there is an entire industry in Ontario that revolves around retraining and placing people. It includes non-profit training agencies, for-profit placement agencies and a wide array of post-secondary education programs. Most workers leaving Kellogg will encounter a job market that is utterly foreign to them.

Kellogg workers were paid, on average, around $30 per hour. If 500 displaced workers each made that amount in a 40 hour work week job, then London is losing slightly over $31 million in payroll that would have otherwise been spent in the city. The workers will find that a good manufacturing job in London now pays around $18 an hour. London’s public policy makers would have to attract over 800 jobs to compensate for the loss of the Kellogg payroll. 

The labour market is now dominated by precarious work. People working for $18 an hour have to make harder economic choices than those with higher wages. Difficult decisions about owning versus renting, buying a car or putting some money away for the future will be made by displaced Kellogg workers.

 

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Jason Russell is assistant professor of Labor Studies at State University of New York’s Empire State College.

Photo: flickr/Dan Taylor

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