Heinz was backed by Brazilian private equity firm 3G Capital, which has a reputation for finding ways to trim fat at companies, including Heinz itself and Anheuser-Busch InBev (ABI.BR).
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The cuts in North America are likely to have now intensified concerns over the job security of Unite members at sites in Hayes, Kendal, Leamington Spa, Luton, Norfolk, Telford and Dundalk in Ireland. The company plans to close that facility and build a new $203 million dollar state-of-the-art manufacturing center at the Eastern Iowa Industrial Center in northwest Davenport.
“This will make Kraft Heinz more globally competitive and accelerate the company’s future growth”, he said.
Kraft Heinz also announced that in 2016 it will move Oscar Mayer and its U.S. Meats Business Unit from Madison to its co-headquarters in Chicago.
Production that was being done in Madison will be moved to other plants within the Kraft Heinz network.
According to a report on CNBC, Michael Mullen, the SVP of corporate affairs, the ones that will be closed down are the manufacturing plants located in New York, Maryland, Madison, Lehigh Valley, Pennsylvania; California, Wisconsin and Ontario, Canada.
“Today, I requested a meeting with the Kraft Heinz CEO to discuss their decision to close the Oscar Mayer operations in Madison”, Pocan said in a news release. That’s part of a restructuring plan to save $1.5 billion in operating costs by the end of 2017.
The company announced 2,500 layoffs in the US and Canada in August, including about 700 at the Northfield headquarters.
Kraft Heinz formed from the merger of Kraft and Heinz this year.
“There’s 130 individuals employed at that facility and that’s our most immediate concern”, Kay said. City officials say the new plant could retain at least 475 full-time jobs.
The new company, Kraft Heinz, announced Wednesday that it would shutter the 96-year-old Madison facility within two years.
Pat Schramm, chief executive of Workforce Development Board of South Central Wisconsin, said her agency would work to subsidize retraining for employees.
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The Kraft Heinz Co., the third biggest food and beverage manufacturer in North America, posted $6.36 billion in revenue, down 9% from a year ago, which took into account pro forma revenue.
