Specifically, plants in Lehigh Valley, Pa.; Fullerton, Calif.; San Leandro, Calif.; Federalsburg, Md.; St. Marys, Ontario, Canada; Campbell, New York; and Madison, will close after the production done at those facilities is shifted to other North American factories, Mr. Mullen said.
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The company says it will use the savings to install “state-of-the-art production lines” at its other facilities. After the facilities close, Kraft Heinz will have 41 plants in North America that employ about 18,000 people.
State officials also expressed surprise at the decision, noting that the company had not given any indication it was considering the move.
Kraft Heinz also plans to move its Oscar Mayer processed meats business to Chicago from Madison. “But working together with Governor Cuomo we were able to craft a deal with Kraft-Heinz that saves these factories from closure; that protects jobs; and that invests in growth for our future in each of these communities”.
When Kraft and Heinz completed their merger in July, the companies indicated that staff reductions were ahead. “We have reached this hard but necessary decision after thoroughly exploring extensive alternatives and options”, Mullin said.
Lowville, Lewis County: The plant, which employs 340 people and makes Philadelphia Cream Cheese products, will remain open.
A Oscar Mayer plant in Madison will apparently close in early 2017, a move that could affect hundreds of jobs. She said there’s been a trend of transforming closed plants into worker-owned operations, and she is hopeful something like that could happen with the Oscar Mayer plant, perhaps helping to grow the regional food industry. Equities analysts anticipate that Kraft Heinz will post $3.24 earnings per share for the current year.
Alcoa said Monday it will close its Massena East plant and lay off almost 500 workers.
Craig Rost, executive director of the Champaign County Economic Development Corp., said the company didn’t inform local officials about the upcoming job losses before Wednesday’s announcement, and he plans to be in touch with Kraft.
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The company in 2016 will also move its Oscar Mayer segment and its US meats division from Madison, Wis., to its Chicago co-headquarters. Under the agreement, Kraft-Heinz will continue operating the Avon, Walton and Lowville plants. Kraft Heinz Co (NASDAQ:KHC) has risen 6.00% since October 4, 2015 and is uptrending.
