Now their parent company, the closure of the plant is part of Kraft Heinz’s plan to close seven factories in the US and Canada.
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The IEDA said Kraft Heinz’ Davenport facility manufatures Oscar Mayer products and is the largest bologna plant in the world. Cheese production will be shifted away from the company’s plant in Champaign, Ill., to other plants in North America, and the company plans to make the Champaign location a “center-of-excellence” in dry sauce production.
Kraft Heinz also plans to move about 250 corporate jobs from Madison to Chicago, the company’s co-headquarters along with Pittsburgh. After the facilities close, Kraft Heinz will have 41 plants in North America that employ 18,000 people.
“There has never been a better time in this community for this to happen, because all the relationships are in place to make the transition for the workers as quickly as possible”, said Schramm.
The company also said on Thursday that it was increasing its dividend to 57 cents per share of common stock, a rise of 4.5 percent. Heinz was backed by Brazilian private equity firm 3G Capital, which has a reputation for finding ways to trim the fat at companies, including Heinz itself and Anheuser-Busch InBev.
Earlier this week, Kraft Heinz told about 2,600 employees at seven North American plants that those facilities will close in the next 12 to 24 months.
In 2016, the company will move Oscar Mayer and its U.S. Meats Business Unit from Madison to the company’s Chicago headquarters.
Nevertheless, this decision was made just a little over two months after H.J. Heinz Co merged with Kraft Foods Group. The closing of the listed manufacturing plants will be implemented gradually and the operations are expected to be fully settled within two years. “We have reached this hard but necessary decision after thoroughly exploring extensive alternatives and options”, he said.
Kraft Heinz reported a drop in sales and profit for its first quarter since the food giant was created in a merger orchestrated by billionaire Warren Buffett and 3G Capital. “We’re going to miss it. It’s like a death in the family”.
The cuts are in addition to the 2,500 workers in the region the company announced it would let go in August.
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The current plant employs about 1,400, while the company says a new, modernized facility will employ a minimum of 475.
