Battle Creek's loss will be Grand Rapids' gain
(BATTLE CREEK ENQUIRER) - Kellogg Co. will open a regional service center in Grand Rapids this year, meaning job losses in Battle Creek as the company continues to implement a restructuring program.
The company said the North America service center will open during the third quarter of 2014 and will house 300 to 600 employees when it's fully operational by 2016. The facility will be at 5300 Patterson Ave. S.E., just south of Gerald R. Ford International Airport in suburban Cascade Township and will house finance, information technology, supply chain and human resources employees.
Kellogg said it chose Grand Rapids for the service center after considering nine potential sites.
President and CEO John Bryant told the Enquirer on Thursday the decision "clearly underlines the commitment of the company to Michigan." The center's proximity to its global headquarters in downtown Battle Creek is expected to allow Kellogg to retain key employees as it grows a "world-class services facility," according to a news release.
"In terms of Battle Creek, we're very proud to call Battle Creek home and we remain absolutely committed to the local community," Bryant said. "There probably will be some job losses in Battle Creek and new roles in Grand Rapids and that will occur over the next few years."
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Company spokesperson Kris Charles said the company has not yet determined which Battle Creek jobs would be moving to the new facility.
She said about 30 to 60 finance employees will move into the facility later this year. Timing for other roles varies but transactional roles in information technology and supply chain are expected to be added by 2015 and human resources will be added in 2016.
Kellogg currently has some 2,000 employees in Battle Creek but company officials declined to say how many employees who work in the affected departments are located here. In 2011, the company moved nearly 600 employees to its K2 building at 67 W. Michigan Ave. from offices on Porter Street. Kellogg also expanded its downtown research and development facility on Hamblin Avenue in 2009.
"Until we define all the work processes transitioning for each function, the exact impact number of employees in Battle Creek or other locations is not known," Charles said.
Kellogg touted Grand Rapids' amenities on Thursday, pointing to the city's affordable commercial space and its proximity to other major markets such as Chicago and Detroit. The company also said the new facility's proximity to other major companies' service centers nearby offer "access to a pool of qualified talent with experience in strongly service-oriented environments."
The announcement comes as the company implements a four-year reduction effort known as "Project K." The program will ultimately cut Kellogg's global workforce by 7 percent as it consolidates plants and production lines but is expected to produce cash savings. The company has since announced it will close plants in Ontario and Australia while expanding a facility in Thailand.
Establishing company-operated service facilities is a move toward a three-tiered service delivery model for Kellogg, the company said. Another tier includes some global work, which could move to a third-party provider and the third tier is comprised of locally based work which will continue to be handled by local teams.
Bryant said Project K means tough decisions for Kellogg but allows the company to position itself for growth.
"Project K, over the next four years, gives us the feasibility to reinvest in our business and drive our long-term success into our company," he said.