The Oreo Workers Trump Betrayed

Trump used these workers to win the White House. Their union has fought a losing battle against outsourcing ever since.

Stephen FranklinFebruary 18, 2020

Union member Michael Smith stands outside Chicago’s Mondelēz snack factory before starting his 11 p.m. shift on Dec. 20, 2019. Smith toured the United States on the union’s behalf to explain the harm done by companies offshoring jobs. (Photo by Meredith Goldberg)

CHICA­GO — 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.

600 Mondelēz workers had been laid off—half the plant. In job-hungry Chicago neighborhoods, the union plant, with an average $27 wage, had been an oasis.

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 Mon­delēz 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 Mon­delēz 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 Mon­delēz 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, Mon­delēz 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. 

BCT­GM has suf­fered for years: Fac­to­ry work­ers in Billings, Mont., joined a nation­wide BCT­GM strike in Novem­ber 2012 in response to uni­lat­er­al con­tract con­ces­sions imposed by Host­ess in bank­rupt­cy court. In response to the strike, Host­ess shut down all its plants and laid off 18,500 work­ers. (Pho­to cour­tesy of BCTGM)

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.

Mon­delēz, 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: Mon­delēz 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, Mon­delēz 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. (Mon­delēz spokesper­son Lau­rie Guzzi­nati says that all valid requests for infor­ma­tion” received a response with­in a rea­son­able timeframe.”)

Mon­delēz 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 Mon­delēz 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.

Don­ald Trump swears off Ore­os at a pres­i­den­tial cam­paign event in Rochester, N.H., Sept. 17, 2015. (Pho­to by Dar­ren McCollester/​Getty Images)

When Mon­delēz began its first round of 277 lay­offs in March 2016, BCT­GM stepped up its boy­cott cam­paign against Mex­i­can-made Mon­delēz 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 Mon­delēz 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 Mon­delēz 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 Mon­delēz 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 Mon­delēz work­ers were peo­ple of color.

Lisa Peatry land­ed a job at Mon­delēz 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 Mon­delēz, but the com­pa­ny stopped its recalls, strand­ing Peatry and about 100 oth­ers on the recall list.

After being laid off, for­mer Mon­delēz 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 Mon­delēz 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.)

Lisa Peatry enjoyed work­ing on the pro­duc­tion lines at Mon­delēz — for the pay, but also the diverse com­mu­ni­ty. After Mon­delēz off­shored her job in March 2016, she was unable to pay rent, and lost her home. (Pho­to by Mered­ith Goldberg)

In May 2018, just over two years after the union con­tract expired, Mon­delēz imposed part of its ben­e­fits cuts, switch­ing Smith and his cowork­ers’ retire­ment ben­e­fits from a guar­an­teed pen­sion to a 401(k) account. Mon­delēz 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. Mon­delēz 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, Mon­delēz CEO Dirk Van de Put earned $15 mil­lion. The medi­an Mon­delēz work­er world­wide, mean­while, is a part-time hourly employ­ee earn­ing $30,639, an income ratio of 489 to 1.

A Navy vet with three chil­dren, Antho­ny Jack­son mourned the loss of his job at Mon­delēz, his best-pay­ing job ever. Since the lay­off in March
2016, when Mon­delēz moved hun­dreds of jobs to a new fac­to­ry in Mex­i­co, Jack­son says he’s only found low-wage work. (Pho­to by Mered­ith Goldberg)

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. Mondelēz’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, Mon­delēz 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 Mon­delēz offi­cial told an admin­is­tra­tive law judge that its Mex­i­can work­ers earned $7 an hour in wages and ben­e­fits. As for the union there, a Mon­delēz offi­cial told In These Times that the 2014 con­tract was no longer in effect and dis­put­ed the pro­tec­tion union” moniker.

Mean­while, BCT­GM con­tin­ued pres­sur­ing Mon­delēz to reshore its jobs. In May 2017, 17 Democ­rats in the U.S. Sen­ate called on Mon­delēz 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. Mondelēz’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 Mon­delēz 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.”

Stephen Franklin is a 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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