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The Oreo Workers Trump Betrayed

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Some labor struggles can feel like long, dramatic sagas: unexpected twists, broken hopes, valiant attempts to overcome unyielding giants. Michael Smith knows this tale well as a member of the small, beleaguered Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, BCTGM.

Smith lost his delivery job of 15 years in the massive 2008 DHL Express layoff, then fell into debt, lost his house, and skimped by on unemployment checks and any work he could find. He finally landed a $25-an-hour job on Chicago’s South Side in 2010, with pension and healthcare benefits, on a factory line at snack-foods company Mondel?z International (known at the time as Kraft Foods). The job was a union one, with BCTGM.

But Smith again found himself in the crosshairs of a massive layoff six years later, as Mondel?z announced it was shifting 600 jobs to a new factory, with far lower wages, in Mexico. At 58, Smith had four children, bills for prostate cancer treatments, and slim prospects for finding another decent factory job in Chicago. So when BCTGM launched a public campaign to pressure Mondel?z into bringing the jobs back, Smith agreed to become a spokesperson, and the union offered him a modest stipend. Smith could have signed up for federally funded job training instead, but he wanted to fight the union fight.

Smith and BCTGM have now been battling the $26 billion global behemoth for nearly four years. Back in 2016, presidential candidates Donald Trump and Hillary Clinton both briefly took up the cause. Meanwhile, Mondel?z has sent hundreds of union bakery jobs to Mexico and dealt a blow to the union’s remaining 2,000 members by ending their guaranteed pension plan.

As a union, BCTGM has suffered. Automation, non-union shops, plant closures and offshoring in the bakery and confectionery industries have shrunk the union’s ranks from 115,000 members in 2002 to 66,000 in 2018.

Mondel?z, for its part, has been doing just fine. Most consumers know the company for its Nabisco products: Oreos, Ritz, Triscuits and more. After the snack giant spun off from Kraft Foods in 2012, it turned steady profits, returning $2.9 billion to its shareholders in 2014 as then-CEO Irene Rosenfeld took a 50% pay increase, to $21 million. To meet shareholder demand for continuing profits, Rosenfeld then embarked on an “aggressive cost-cutting plan.” Since 2015, the company has been shuttering plants and trimming labor costs.

In May 2015, BCTGM received a jolting offer from the company: Mondel?z would consider $130 million in equipment upgrades at the 62-year-old Chicago plant if the union accepted $46 million in annual wage and benefit cuts—a 60% cut in pay and benefits, the union calculated. If the union refused, the investment and jobs would go to a new multi-million-dollar plant in Mexico.

The union refused, hoping to deal with the issue when company-wide contract talks began in February 2016. Then, Mondel?z “stonewalled” on providing “cost comparisons” and information about the Mexico plant, says BCTGM International Strategic Campaign Coordinator Ron Baker. “There was no negotiation,” Baker recalls. (Mondel?z spokesperson Laurie Guzzinati says that all “valid requests for information” received a response “within a reasonable timeframe.”)

Mondel?z began layoffs in March 2016, saying the union hadn’t offered a proposal.

A veteran of United Mine Workers of America’s long battles with coal behemoths, Baker doubted that negotiations could convince Mondel?z to stay in Chicago—but he believed public pressure could draw sympathy over the loss suffered by workers at a plant that makes the Oreo, a truly iconic American snack.

Indeed, Trump had repeatedly brought up the Oreo saga as part of his campaign rhetoric about offshoring jobs. “I’m not eating Oreos anymore,” Trump said in New Hampshire in September 2015. “Nabisco is closing their plant, a big plant in Chicago, and they’re moving it to Mexico.” The plant remains open (it had never planned to close), but about half of its jobs were moved.

When Mondel?z began its first round of 277 layoffs in March 2016, BCTGM stepped up its boycott campaign against Mexican-made Mondel?z products, begun months earlier, and opened a makeshift office across from the factory. The union was counting on publicity from the 2016 presidential campaigns.

Clinton visited the union’s campaign office that March, meeting with Michael Smith and other workers, then with Rosenfeld, reportedly to urge a halt to the move. Nothing changed.

The union sent Smith and others across the United States to meetings, public rallies and media interviews to talk about the harm done by prosperous companies seeking cheaper labor overseas. At a June 2016 Democratic Party platform committee meeting in Washington, D.C., Smith appealed: “I am not a number, nor [is] my family, nor my neighbors, nor my coworkers … We are, however, victims of [the] global snatch-and-grab that has gutted our community.”

In visits to 25 college campuses, BCTGM reps urged students to boycott Mexican-made Mondel?z products and have their schools do the same (though the union is not sure whether any schools did). More than 280 U.S. religious leaders signed a letter asking Mondel?z to stop shipping jobs outside the United States. The boycott made headlines and the rounds on social media, though some critics pointed to the limited success of such efforts and the xenophobic potential of “buy American” rhetoric.

After Trump became president, the union was optimistic he would take up the fight from the White House. In 2017, BCTGM reached out to Trump directly but received no reply, not even a tweet. Ron Baker says Trump has done nothing to help the union since 2016.

The 2016 job loss landed like a hammer. By summer, 600 Mondel?z workers had been laid off—half the plant—though the company did begin callbacks to fill openings created by retirements, per the union contract, and kept the process in place after the contract expired, according to a company spokesperson.

According to the union, the majority of workers at the plant were over 40, and many came from families that had worked for generations at the massive Southwest Side Chicago factory, which was built in the 1950s and employed up to 4,000 workers in its heyday. In job-hungry Chicago neighborhoods, the union plant, with an average $27 wage, had been an oasis. Manufacturing, once a driver of Chicago’s economy, accounted for about 18% of the city’s jobs in 1994 and only 10% in 2017. Chicago’s Black communities were hit especially hard: The percentage of workers in factory jobs dropped from almost 30% in 1960 to 6.5% in 2017, while unemployment more than doubled, to 20%. Two-thirds of the laid-off Mondel?z workers were people of color.

Lisa Peatry landed a job at Mondel?z in 2013, after four different layoffs and closings, including the Kool-Aid plant that sent some work to Mexico in 2002. She was 50, living on her own after raising three children. She liked her job on the production lines because they were fast and she appreciated her coworkers. “There was a diversity of races and everyone got along,” she says. Peatry was laid off in March 2016. Unable to keep up with rent, she lost her home and has been staying with a relative.

Eventually, Peatry found a factory job at $14 an hour—a job that often left her crying nightly from its difficulty and the treatment she received from bosses—and then a better job at $18. She still wanted to return to her $25.43-an-hour job at Mondel?z, but the company stopped its recalls, stranding Peatry and about 100 others on the recall list.

After being laid off, former Mondel?z worker Salvador Ortiz, 49, signed up for English classes and hoped to do better than friends, who were finding $11-an-hour jobs. Talking about his future one day in May 2016, in the living room of a comfortable bungalow not far from the plant, his wife cried, saying their middle-class dream was over. Ortiz feared losing his house and car. More than a year later, Ortiz was recalled back to the plant, but had suffered financially, getting by on unemployment checks and $14-an-hour jobs.

When Michael Smith was called back to Mondel?z in March 2018, he found the working conditions had changed for the worse. Smith was on mandatory overtime almost daily, sometimes working a double shift, getting only four or five hours of sleep and never knowing when he could make a doctor’s appointment. Smith felt the company was in disarray. He was now running an oven, a new job for him that was uncomfortable because of the high temperatures. “It’s 120 degrees and it’s like I’m sitting in the oven,” he tells In These Times. (Guzzinati says mandatory overtime may be required more than once weekly, to accommodate workload.)

In May 2018, just over two years after the union contract expired, Mondel?z imposed part of its benefits cuts, switching Smith and his coworkers’ retirement benefits from a guaranteed pension to a 401(k) account. Mondel?z honored existing pensions but pulled its 2,000 remaining union bakery workers out of BCTGM’s multiemployer pension fund, committing to instead pay an early withdrawal fee of $560 million over 20 years. Mondel?z told workers it was thinking about their future: The multiemployer plan could collapse by 2030, the company warned.

But the union sees it as just another blow to one of the most troubled multiemployer pension plans, which has suffered since the 2008 recession. When Hostess Brands, once the fund’s largest contributor, closed and filed bankruptcy in 2012, the company left a $2 billion pension liability. By 2018, the fund had $7.9 billion in liabilities and only $4.1 billion in assets.

In 2018, Mondel?z CEO Dirk Van de Put earned $15 million. The median Mondel?z worker worldwide, meanwhile, is a part-time hourly employee earning $30,639, an income ratio of 489 to 1.

Preventing U.S. firms from outsourcing jobs was a drumbeat for the 2016 Trump campaign. “These companies aren’t going to be leaving anymore,” Trump declared in December 2016 in Indianapolis. “They’re not going to be taking people’s hearts out. They’re not going to be announcing, like they did at Carrier, that they’re closing up and they’re moving to Mexico.”

But Rosemary Coates, head of the Reshoring Institute, a California-based nonprofit, says that, rather than bringing jobs back to the United States, companies are increasingly looking for new places to send production. The latest reshoring survey by consulting company A.T. Kearney shows that imports of manufactured items to the United States from 14 low-cost countries have steadily grown for the past five years, indicating that offshoring continues.

The Trump administration has lauded tariffs and trade wars as a way to pressure companies into keeping jobs in the United States. Yet, as Tobita Chow, director of the Justice Is Global project at the People’s Action Institute (and member of In These Times’ board of directors), explains, this strategy has backfired. “Trump’s trade wars have raised costs, reduced demand, killed jobs in the United States and worsened working conditions across much of the Global South,” Chow says.

In Mexico, factory workers earn 40% less than those in China. Mondel?z’s new plant opened in Salinas Victoria, Mexico, in late 2014 and now has 1,800 workers, according to the company. But workers in Mexico have been pinned under a mountain of problems.

Most Mexican unions serve companies under “protection contracts,” in which the company actually picks the union and dictates contract terms, defanging worker movements before they begin. Protection contracts are often signed by unions when a factory has very few workers to actually negotiate. In October 2014, with just 20 workers at the new plant, Mondel?z signed a union contract that capped the top day rate at 200 pesos, about $14.90 per day. BCTGM eventually obtained a copy of the contract, which it called proof that the Mexican workers were victims of a protection contract.

According to an August 2017 ruling from the National Labor Relations Board, a Mondel?z official told an administrative law judge that its Mexican workers earned $7 an hour in wages and benefits. As for the union there, a Mondel?z official told In These Times that the 2014 contract was no longer in effect and disputed the “protection union” moniker.

Meanwhile, BCTGM continued pressuring Mondel?z to reshore its jobs. In May 2017, 17 Democrats in the U.S. Senate called on Mondel?z to hire back workers let go at its plants in Chicago and at its operations in Fairlawn, N.J., Richmond, Va., Portland, Ore., and Atlanta—but nothing happened.

In November 2017, BCTGM partnered with religious and union leaders to arrange a visit with Mexican union activists from different groups in Monterrey, Mexico. The union has since reached out to the independent Mexican Los Mineros union, which separates itself from Mexico’s more corrupt or compromised unions. Mexican President Andrés Manuel López Obrador has pushed through stronger worker protections, but implementing them will be a challenge as longstanding protection unions fear losing control.

Importantly, the new trade agreement between the United States, Mexico and Canada—passed in December 2019 with support from U.S. labor unions—is a blow to the protection contracts signed by corrupt unions, calling for union monitoring and access to bi-national panels for inspections triggered by worker complaints.

Mondelez and BCTGM remain in a stalemate over lost jobs and a lost pension plan. They have not talked in a year, each claiming the other has quit negotiations. Mondel?z’s stock is up more than 30% since May 2015.

BCTGM Strategic Campaign Coordinator Nate Zeff, who picked up the torch when Baker retired in 2018, says a new campaign will launch early this year and will involve mobilizing Mondel?z workers in Mexico.

“We are almost four years into this fight,” Zeff says. “Eventually, we are going to win.”

“The real solution to offshoring is not trade wars—it’s to raise standards for workers across borders,” says Justice Is Global’s Chow. “We can get there through international worker solidarity, not by pitting workers against each other across borders as Trump has done.”

Michael Smith, who now works at the Chicago plant, has his own strategy. Ever an optimist, he is writing to Trump to ask for his help saving pension plans like his.

“It’s an opportunity for him to own up to saying he would never eat Oreos again,” Smith says. “It’s only a hope. He is still my president.”

This article was originally published at In These Times on  February 18, 2020. Reprinted with permission.

About the Author: Stephen Franklin, former labor and workplace reporter for the Chicago Tribune, was until recently the ethnic media project director with Public Narrative in Chicago. He is the author of Three Strikes: Labor’s Heartland Losses and What They Mean for Working Americans (2002), and has reported throughout the United States and the Middle East.

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