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News Kraft Heinz to close 7 factories in US, Canada in downsizing

Kraft Heinz to close 7 factories in US, Canada in downsizing

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IOWA CITY, Iowa (AP) – Kraft Heinz will close seven plants in the U.S. and Canada over the next two years as part of a downsizing that will eliminate 2,600 jobs, or roughly 14 percent of its North American factory workforce, the newly-merged food company announced Wednesday.

The company said it would close manufacturing facilities in Fullerton and San Leandro, California; Federalsburg, Maryland; St. Marys, Ontario, Canada; Campbell, New York; Lehigh Valley, Pennsylvania; and Madison, Wisconsin. The closures will occur over the next 12 to 24 months.

The company said it also will close its existing lunch-meat processing plant in Davenport, Iowa, and move production to a new state-of-the-art plant to be built several miles away within two years. Part of the company’s cheese production will also be moved away from Champaign, Illinois.

The company, co-headquartered in Chicago and Pittsburgh, formed from the merger of Kraft and Heinz earlier this year. After the facilities close, Kraft Heinz will have 41 plants in North America that employ about 18,000 people.

“Our decision to consolidate manufacturing across the Kraft Heinz North American network is a critical step in our plan to eliminate excess capacity and reduce operational redundancies for the new combined company,” Michael Mullen, senior vice president of corporate and government affairs, said in a statement.

“This will make Kraft Heinz more globally competitive and accelerate the company’s future growth,” he said. “We have reached this difficult but necessary decision after thoroughly exploring extensive alternatives and options.”

The company said about 250 corporate jobs in the Oscar Mayer and U.S. meat business unit will be relocated from Madison, Wisconsin, to Chicago.

The new company announced in August that 2,500 non-factory jobs would be cut following the merger. Berkshire Hathaway Chairman and CEO Warren Buffett was instrumental in financing the merger and Berkshire Hathaway became the newly merged food producer’s largest stockholder.

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