BCTGM: Mondelez Turns its Back on Chicago and its Workers

Jul 29, 2015, 16:53 ET from Bakery, Confectionery, Tobacco Workers and Grain Millers International Union

KENSINGTON, Md., July 29, 2015 /PRNewswire-USNewswire/ -- Today's announcement by Mondelēz International that it has chosen to make a $130 million capital investment in new production lines at its Salinas, Mexico plant rather than in the company's Chicago bakery is yet another example of this $35 billion multinational corporation's callous disregard for the City of Chicago and the hardworking, tax paying local men and women who for decades have loyally produced the high-quality, iconic baked goods that made this company so financially successful.

Officials of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) were informed today by Mondelēz that as part of its investment, the company will install four new lines at its Mexico plant, replacing nine production lines at its historic Chicago facility, where approximately 1,000 workers are represented by BCTGM Local 300.

The Chicago plant, which dates to the 1950s, is the company's largest U.S. bakery. Union members operate all of the bakery's 16 lines producing such iconic brands as Oreo, Chips Ahoy, Nutter Butter, Honey Maid, belVita, Premium, Ritz and Wheat Thins.

In responding to the company's announcement, BCTGM International Vice President and lifelong Chicago resident, Jethro Head, states, "The announcement by Mondelēz is not a surprise and validates exactly what the BCTGM said when we met with its representatives in May − that the company had already decided that it was going to put the new production lines in Mexico. 

"We knew this because they came to the table with no legitimate, comprehensive proposal for us to review and no detailed production and financial data for us to analyze, all of which is essential for our Union and members to make a responsible and well-informed assessment and decision."

BCTGM International Strategic Campaign Coordinator Ron Baker explains, "When we did the basic math on their demand, it was clear to the Union and our Chicago members that the company knew full well that the magnitude of the financial sacrifice being asked of the workers was not only unacceptable, but would not even be feasible. The demand for $46 million in annual savings would continue in perpetuity and require our members to work for almost nothing."

According to Baker, in order for the union members to generate $46 million in annual savings, they would have to save $46,000 per worker, per year. This amounts to approximately $22 per hour in wage and benefit cuts. 

Further, the company informed the Union that in order to secure the $130 million investment in Chicago, at least 255 BCTGM members would lose their jobs despite their tremendous sacrifice.  Thus, for the remaining 745 workers to achieve the $46 million in annual savings, they would have to take cuts in wages and benefits of nearly $30 per hour.

The company would realize the above savings in perpetuity.  In 10 years, the savings would be nearly $500 million; in 20 years nearly $1 billion. Beyond this, by cutting 255 BCTGM jobs, the company will generate an additional $30 million per year in wage and benefit savings.

On July 21st, the company confirmed to the Union the basic economic assessment outlined above.  Mondelēz further acknowledged to the Union that the company had never before asked its workforce for concessions to pay for capital expenditure projects.  Recent examples include capital expenditure projects at BCTGM-represented bakeries in Richmond, Va., Fairlawn, N.J., and Naperville, Ill.

"The sole purpose of the Mondelēz request to meet with the Union in May was to attempt to reap concessions out of Chicago workers before they made the announcement. This company wanted the Chicago Bakery workers to pay not only for the full cost of putting new ovens in the Chicago facility, but also for the wages of the entire workforce in Salinas, Mexico in perpetuity," says Baker.

"This effort in Chicago by Mondelēz to have the workforce pay for the company's capital expenditure project is unprecedented and nothing more than an extension of a corporate scheme to wrangle money out of federal, state and local governments to fund their capital expenditure projects," adds Baker. 

Vice President Head concludes, "Mondelēz may be headquartered 30 miles from the Nabisco Bakery on South Kedzie Avenue, but, sadly, this company's genuine commitment to our community and our citizens is well in the past."

The BCTGM represents approximately 4,000 Mondelēz workers in manufacturing facilities, flour mills and distribution centers across North America.

Mondelēz International, Inc. CEO Irene Rosenfeld took in more than $21 million in total compensation in 2014, a nearly $6 million increase from the previous year.  This included a doubling of her annual cash incentive to $3.6 million and a nearly $4 million increase in her pension plan and other retirement benefits.  In the last eight years, Rosenfeld has received approximately $165 million in total compensation.

Contact: Ron Baker, BCTGM International Strategic Campaign Coordinator, (703) 508-2637

SOURCE Bakery, Confectionery, Tobacco Workers and Grain Millers International Union