Nov 5, 2021 - Economy

How recent worker strikes are impacting big companies

Illustration of Tony the Tiger's fist.

Illustration: Aïda Amer/Axios

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.

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