Kellogg to close local facility

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Kellogg Co. is shutting down the Augusta Distribution Center at its Marvin Griffin Road bakery, possibly putting up to 121 warehouse workers and union truck drivers out of work.

Kellogg Co.'s Murray biscuit bakery will close its distribution center as part of a multimillion-dollar Southeast reorganization.  File/Staff
File/Staff
Kellogg Co.'s Murray biscuit bakery will close its distribution center as part of a multimillion-dollar Southeast reorganization.

The move is part of a corporate reorganization of its Southeastern distribution network, which will result in about 300 layoffs.

The distribution center will close at the end of September, according to a notification letter Kellogg sent to the Georgia Department of Labor.

"The local impact is at most 100, yet we are adding positions within the company and certainly all of them are eligible to apply for those positions," said Kris Charles, Kellogg's senior corporate communications director. She said the company isn't disclosing the number or location of those jobs.

Of the jobs lost, 60 of them are truck drivers, said Teamsters Local 528 representative Mike Harris. The drivers delivered to independent distributors, who supplied mom-and-pop stores with small orders, he said.

As part of the changes to its distribution network, Kellogg is expected to spend $38 million to buy out 517 distribution route franchise agreements, according to a filing with the Securities Exchange Commission.

"What we're doing is taking an independent contractor situation and integrating it into our full-time sales force that services the stores themselves," Ms. Charles said.

The reorganization plan will cost the company between $75 million and $85 million. John Bryant, Kellogg's chief financial officer, said in the SEC filing that the reorganization should be complete by the end of the year.

"They're going to bulk shipments is what it boils down to, pallet-sized lots that will go in truck loads to distribution centers across the country," Mr. Harris said. "They're getting away from the small stores, the place that gets five to 10 cases of cookies a week, and going more toward the big stores, the grocery chains."

Mr. Harris said a severance package based on years of service was negotiated for the union drivers. He said the Teamsters will attempt to find them local work, but not all will find jobs in the Augusta area.

"They told us Thursday that this had nothing to do with the work of the people. This was a company decision to shut down the operation, it had nothing to do with work or representation," Mr. Harris said.

Ms. Charles said the Augusta bakery makes Chips Deluxe and Sandies brand Keebler cookies, as well as Famous Amos and Murray sugar-free cookies. Kellogg is the world's largest producer of cereal and convenience foods.

Reach Tim Rausch at (706) 823-3352 or timothy.rausch@augustachronicle.com.

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falconch3
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falconch3 07/24/07 - 09:10 am
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Streamlining at it's finest

Streamlining at it's finest

stampman79
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stampman79 07/24/07 - 10:00 pm
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Kellogg had already

Kellogg had already eliminated a number of jobs at this facility a few months ago so this wasn't a surprise. In fact, the employees were told several weeks ago about this layoff. Also, they are spending 70 million to buy out the distribution franchises not 35 million like the story says. Somebody lied to the SEC or the paper misquoted the figure. Incredibly, the employees who will be laid off have been told not to talk to the media. Since the severance packages they are getting are a joke, it's no wonder.

tdp
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tdp 07/25/07 - 08:13 pm
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Black Sambo, sadly, you are

Black Sambo, sadly, you are correct. Unfortunately, things that happen in America and not in other countries, like the formation of unions and bogus worker's comp claims, are forcing companies to send their manufacturing overseas. Americans are doing this to themselves by their greed & laziness.

patriciathomas
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patriciathomas 07/26/07 - 03:00 am
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Kellogg is just reorganizing.

Kellogg is just reorganizing. It needs to be done on a regular basis.

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