Kellogg Considers More Job Cuts

In addition to closing part of its Battle Creek cereal plant (see related article), Kellogg plans to eliminate up to 700 of the plant's 1,100 jobs in an effort to improve its market share.

"Streamlining our operations and avoiding future costs would help keep our North American cereal business cost-competitive going into the 21st century," chief executive Carlos Gutierrez said in a statement.

Analysts doubt the move will offer much relief to Kellogg which, even with recent sales' increases, is stuck in a very competitive market. Despite the fact that Kellogg enjoys about 31% of the market, just ahead of General Mills, it continues to lose ground to less expensive generic and store-brand cereals and easy-to-eat bagels and muffins.

Joseph Stewart, senior vice president of corporate affairs, said the closure recommendation was made because updating equipment at the plant would have been too expensive. The Battle Creek plant, which makes Kellogg's Corn Flakes, is currently the company's largest plant in North America. It the cuts are made, it will move to the number three position.