From Ohio to Punjab, the disposable jobs behind Kraft’s ‘power brands’

While Kraft gathers CSR awards and babbles on about ‘Making a Delicious Difference in Our Communities’, a recent article in a local Ohio newspaper provides new details of the squalid chain of outsourced disposable jobs at Consolidated Biscuits, Kraft’s notoriously anti-union contract manufacturer in McComb.

According to the Lima News article agency workers at the private-equity owned factory, which manufacturers ‘power brand’ Kraft and Nabisco products, are paid less than 9 dollars an hour (a dollar over the minimum wage) by Pyramid Staffing, a temp service which charges them 10 dollars a day for bus transportation to and from work. “You work eight hours, but it’s a 12-hour day”, one worker told the paper. Working on the line adding the creme “core” to biscuit sandwiches, the work is “core” to the manufacturing operation, but the job is triply outsourced. Kraft outsources the manufacturing to Consolidated, and Pyramid Staffing recruits for another staffing agency, Impact Employment Solutions, which works directly with Consolidated.

The article describes agency workers doing their shift, returning home and then travelling back to the factory for the third shift that day in the hope of finding replacement work – with no guarantee they will be offered it. No work, no pay…

Consolidated Biscuit is a notorious example of a company committing serial violations of United States labour law and evading the consequences in their battle to frustrate unionization . The company was repeatedly cited for violations of US law by the National Labor Relations Board for dismissing union supporters after workers in 2002 showed majority support for the BCTGM. On November 14, 2008, the Sixth District Court of Appeals delivered a 48 page judgment finding that the company engaged in flagrant and repeated violation of the law for “telling employees not to talk about the Union on company time: suggesting to employees that supporting the Union would be futile: instructing security guards to call police at the first sign of union activity and calling the police to the facility…threatening employees with loss of benefits, plant closures, and stricter discipline if they supported the union”. The Toledo Blade cited Consolidated Biscuits as being “on the nation’s list of the most hazardous workplaces.”

A decade of union-busting at Consolidated Biscuit has been accompanied by massive recourse to agency work. Agency workers, once few in number, now account for around a third of the workers making Kraft/Nabisco products in McComb, according to some estimates. Exact figures are difficult to come by – there is no union in the plant, and Consolidated was acquired by Hearthside Good Solutions in 2009, with management’s anti-union campaign still going strong. Hearthside is in turn owned by Chicago-based private equity company Wind Partners.

How many US consumers are aware that the famous Kraft products are not actually made by Kraft? Many workers who receive their wages from Pyramid Staffing would be equally surprised to learn that the real employment relation runs through Impact Employment Solutions. These workers don’t work for Kraft, don’t work for Consolidated, and don’t even work for Impact Employment Solutions. They don’t qualify for the “make the delicious difference” offered Kraft employees to participate in the company’s “global employee week of service to a mobile pantry that brings food to the people who need it most and a program that gets kids growing their own fruits and veggies.”

The Kraft products made by a contract manufacturer relying on outsourced employment in McComb have a counterpart at Kraft India: Bector Food Specialties, who make power brand Oreos at a plant in Phillore-Ludhiana in the northern state of Punjab. Bector employs only 35 workers out of 720 on direct permanent contracts – the remainder are directly employed casual workers (500 women and 125 men) or contract workers supplied by a labour contractor. The 625 casual workers have no employment contracts and work a minimum 12 hour shift (the factory’s 24/7 operation only has two shifts). On average they are paid RS.3,200 per month [USD 71.40; Eur 49.80], which is 17% less than the minimum wage for Punjab state. Lacking a permanent contract, they can be disposed of at will to meet the demand for ‘flexibility’.

The Bector operation is an important component of Kraft’s rapid growth in India and other emerging markets which has captivated investors and lies behind the move to split the company into two separate corporations later this year, North American grocery and a high growth international snacks division (of which the Consolidated operation will be part).

“The growth rates that we have seen have been well in excess of what Cadbury had been generating primarily because we have chosen to invest in a lot of critical areas such as sales, marketing..,”, Kraft CEO Irene Rosenfeld told India’s Economic Times in November 2011. Investing in workers is obviously not part of the scheme.