U.S. Senator Questions Kellogg over Plans to Shut Down Plants and Cut Jobs

Crisis

Sen. Robert P. Casey Jr. Grills Kellogg on Job Losses

Senator Robert P. Casey Jr. wants Kellogg Company (NYSE:K) to explain what it plans for its suburban distribution centers in Philadelphia and Pittsburgh—which the company plans to close in August, leaving over 500 workers without a job—as the company restructures its national delivery network.

The senator’s letter calls for Kellogg to maintain its “long-standing commitment to the Pennsylvania workforce” and inform the state of its plans regarding its workers and plants following the shutdown.

Kellogg recently announced that hundreds of workers would be laid off as it restructures its distribution network, but one source has claimed that the number of jobs lost will actually total in the thousands and could tally as high as 25% of the total 36,000 Kellogg workforce.
The company claimed that changing consumer habits and technological developments have necessitated jobs being shed.

The move follows in the steps of Wal-Mart Stores Inc (NYSE:WMT), which uses retail company distributors instead of directly shipping goods to stores themselves. As such, not only will many hundreds, potentially thousands, of people employed by Kellogg be out of work, but the industry surrounding the shipping of these goods will also be in trouble.

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Truck drivers, loaders, and support personnel could all also be out of work as the large company ceases to be in need of their services.

The amount of jobs lost reflects the changing economic landscape, especially in the shipping sector. As automation and other technological advances continue to encroach on the workforce, expect more jobs to be lost in the near future.

Trucking, for instance, is seen as one of the more vulnerable fields of employment that may be dramatically cut due to the nearing innovation of autonomous vehicles replacing human drivers.

All the same, Kellogg has yet to respond to the senator in public, leaving many to wonder what the company is planning with its plants and, more importantly, with its workers who will soon be without a job.

Sources
U.S. senator calls on Kellogg to explain job cuts,” Philly.com, June 19, 2017.

UPDATE: Kellogg’s cutting ‘thousands’ of U.S. jobs in warehouse switch,” Philly.com, June 1, 2017.

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