Beware of unintended consequences

CBJ Editorial 

General Mills has a long and important history in Cedar Rapids. Built in 1968, the plant is the company’s largest and most efficient production facility, producing over 70 million cases of cereals, fruit snacks, and frosting.

Reputed to have some of the best compensation and benefits of any manufacturer in the region, General Mills has many employees who stay until retirement. A few of the employees quoted in recent news articles about a potential worker’s strike had 22 and 37 years, respectively, of employment at the facility.

The challenge of finding and retaining employees, a nearly universal problem for employers in the region, isn’t a pronounced one there.

That’s why it was a head scratcher when members of Local 110 of the Retail, Wholesale, and Department Store Union, the union newly elected to represent workers at General Mills voted to reject the company’s “last, best and final” offer and were talking strike before finally accepting a new contract based on a revised offer at the eleventh hour.

Because it was the first contract agreement since employees voted to unionize in January, we were not surprised to see the union take a hardline posture. We did find it unseemly, but not unheard of that union activists decided to picket the home of plant manager Rue Patel to add some pressure in the negotiations.

The union may have attained some modest enhancements with this contract, but we’re concerned about the long-term consequences considering the challenge for food companies like General Mills to try to stay abreast of the consumer’s ever-changing diet preferences.

General Mills is a huge corporation with billions in sales and touts that it and its predecessor firm have paid dividends without interruption for 120 years. A company that large with that type of dividend streak understands keenly the importance of financial discipline and managing costs.

A $100 million cost-cutting initiative was launched in 2014, for example. The very next day General Mills announced plans to close two plants, including a unionized cereal plant in Lodi, Calif., where it employed 430 workers making some of the same products made in Cedar Rapids.

Antonio Castro, a union representative for the company’s Lodi workers said that General Mills plant locations in Iowa and Kansas were among those mentioned by company representatives to take over some of the production of cereals such as Lucky Charms and Cheerios from Lodi when it closed in late 2015.

It is unknown if the Cedar Rapids facility was attractive at the time to take on these products because it wasn’t unionized, but that would not be an illogical conclusion.

We do not fear a shutdown of the Cedar Rapids plant, which has a 2019 land tax assessment of nearly $20 million and is estimated to pay nearly $700,000 in property taxes, despite these union machinations. However, it stokes concern that the plant may be overlooked if the company realigns its manufacturing system as it did affecting plants locations like Lodi.

Now that the first contract is behind them, we hope the union and General Mills can bridge their differences more amicably in the future contracts. A little common sense can go a long way to keeping jobs and production in the Corridor.