Dive Brief:
- Mondelez International remains at a standstill in its negotiations with the the Bakery, Confectionery, Tobacco Workers, and Grain Millers (BCTGM) union representing workers at Mondelez's Chicago Nabisco factory. The local contract covering those workers expired at midnight Monday.
- The two sides haven't been able to agree on retirement and health benefits, particularly pension plans, and talks fell apart last week.
- Negotiations may resume next week but a strike is also an option, Ron Baker, BCTGM spokesman, told the Chicago Tribune.
Dive Insight:
These moves — a food company shifting production from a U.S. city to an international facility — rarely come without job-related concerns and pushback.
Still, Mondelez stands to generate about $46 million in annual savings thanks to the state-of-the-art production lines the company is installing at its Salinas, Mexico facility. Cost-cutting has been a focus for Mondelez in recent years, particularly under pressure from investors, and the decisions made at Chicago fit into that cost-cutting plan.
What complicates this particular situation is that the shutdown of production lines in Chicago coincides with the renegotiations of contracts for the workers still employed there. Mondelez insists the two scenarios are not related. Current employees' pension plans are one of the key sticking points. Mondelez has "business continuity plans" in place to respond to a strike if necessary,Mondelez spokeswoman Laurie Guzzinat told Chicago Tribune.