How recent worker strikes are impacting big companies
The latest nugget from earnings season: Worker strikes across the U.S. are starting to hit big companies' bottom lines.
Driving the news: Kellogg warned on its Thursday call that annual profits could take a hit due to sustained worker strikes at its cereal plants.
- The plants aren't operating at full capacity thanks to the strikes, and to the difficulty finding temporary labor. Those disruptions, combined with input cost inflation, could dampen profits.
- Kellogg workers are extending their month-long strike after rejecting the company's most recent pay and benefits offer on Wednesday.
Meanwhile, Deere & Co. workers — part of the biggest pandemic-era worker strike, 10,000-strong — are also continuing their work stoppage after rejecting their employer's latest attempt at a deal with the United Auto Workers union.
- That deal, which would have poured an additional $3.5 billion into pay and benefits, is Deere's best and final offer, the company said.
State of play: Deere managed to bring a lot more workers on board with its latest proposal. While 90% of workers rejected the company's first offer, 55% voted against the second one.
- The company needs a simple majority to reach a deal with the UAW — and aims to chip away at the holdouts in the days and weeks to come.
The bottom line: Workers have more power for now, but continued strikes are hurting both sides, with employees losing wages and employers seeing dents in their profits.