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Kellogg to close Battle Creek plant
Breakfast giant to cut 550 jobs in ‘Cereal City’

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Breakfast giant to cut 550 jobs in ‘Cereal City’

BATTLE CREEK, Mich. -- Kellogg Co. on Saturday announced it would close most of its historic hometown plant and cut about 550 jobs in its latest effort to revive a sagging bottom line.

"Continuing to reduce costs and increase efficiencies is an important part of our global strategy to return Kellogg Company to strong, steady growth," said President and CEO Carlos M. Gutierrez.The decision is a heavy blow to this city where the scent of freshly baked cereal often permeates the air and generations of families have banked on work with the company.

"I think they could try a little bit harder to bring more jobs in here. The community is going to suffer tremendously, as are we," said Debra Robinson, who has worked in Kellogg's warehouse for 11 years.

The company said restructuring its business would result in a charge of $100 million to $150 million against earnings this quarter, with more charges expected later this year and early next year.

Kellogg is the third-largest employer in this community of 56,000, which calls itself "Cereal City." The company said it would offer assistance to workers whose jobs are eliminated.

Though still the world's top manufacturer of ready-to-eat cereals, Kellogg has been hurt by competition from cheaper, store-brand cereals, as well as marketwide demographic changes. Fewer Americans are eating cereal in the morning, preferring convenience foods, such as bagels, that can be eaten on the run instead.

Kellogg had announced in June it was considering closing the aging South Plant to save an estimated $35 million to $45 million annually and reduce excess cereal production.

There are 2,250 employees in Battle Creek, where the cereal giant was founded in 1906. About 1,100 people work at the South Plant. The rest work at corporate headquarters, research or the North Plant, all of which would not be affected by the proposed shutdown. Kellogg has 6,400 jobs in North America.

The company said the closure would begin later this year and end in the first three months of 2000.

"I was pretty sure it was coming," said Rick Brown, 48, who has been with the company for 22 years. With his $22-an-hour position, he doubts whether he will find such well-paying work if his job is among those jettisoned.