'This is the right thing to do': State incentives help WK Kellogg Co retain jobs in Battle Creek
WK Kellogg Co will retain hundreds of jobs in Battle Creek and position itself for future growth in the city thanks to financial incentives from the Michigan Economic Development Corporation.
The Michigan Strategic Fund Board on Tuesday unanimously approved a Michigan Business Development Program Grant of up to $5 million for WK Kellogg Co and a Designated Renaissance Zone that will abate property taxes by an estimated $1.27 million annually for 15 years.
WK Kellogg Co plans to invest at least $44 million, with the potential for it to be up to $143 million, in Battle Creek. The investment will retain 170 jobs that were previously slated to be lost from the idling of two production lines being moved to Belleville, Ontario, and will create 43 new positions, with an average wage of $2,200 per week.
"We believe as a new company and a new leadership team that this is the right thing to do, not only for the business, not only for our employees but for our community as well," Stacy Flathau, chief corporate affairs officer for WK Kellogg Co, told the MSF Board Tuesday. "It would be very difficult to do any of these things without your support. But with it, not only can we maintain these jobs in Battle Creek, but we’ll add more jobs and we will invest millions of dollars in our facility and in training our employees to better position them for future growth and development."
WK Kellogg Co formed in October as a result of the split of Kellogg Co. into two independent, publicly traded companies. WK Kellogg Co is focused on the North American cereal business while Kellanova is focused on global snacking, international cereal and noodles and North American frozen foods.
WK Kellogg Co remains headquartered in Battle Creek. Kellanova, meanwhile, maintains dual campuses in Battle Creek and Chicago, with its corporate headquarters in Chicago.
Kellogg Co. in 2021 announced it would move production of some of its cereal volume from its Battle Creek manufacturing facility to its plant in Belleville, Ontario, effective at the end of 2023, due to cheaper production costs and better efficiency.
The shift in production would have eliminated 170 jobs in Battle Creek. The Belleville plant subsequently underwent a $67 million expansion in the two years since the original announcement, which included financial support via incentives from the Canadian government.
Leaders of the newly formed WK Kellogg Co reconsidered the plan at the urging of Battle Creek employees, Flathau explained Tuesday.
This change in direction will result in $20 million in lost savings for WK Kellogg Co in its first year as well as additional lost savings in subsequent years.
"We are taking an opportunity to preserve jobs and set up the WK Kellogg Co for future growth right here in Battle Creek," Joe Sobieralski, president and CEO of Battle Creek Unlimited, explained Tuesday. "These are some of the highest paid and highest benefited jobs in the state of Michigan, and without these dollars that will be utilized toward training or the renaissance zone, which the city of Battle Creek has voted on unanimously to support, this wouldn’t be possible."
The investment will allow for future expansion at the Battle Creek facility, which has capacity for six production lines. In addition to the investment in new machinery and equipment, the company expects to spend $60 million over the next seven years to retrain employees in Battle Creek.
Contact reporter Greyson Steele at gsteele@battlecreekenquirer.com
This article originally appeared on Battle Creek Enquirer: State incentives help WK Kellogg Co retain jobs in Battle Creek
