Kraft Heinz will leave Campbell facility
CAMPBELL--Approximately 393 area jobs are now in jeopardy due to the announcement of a major downsizing effort. The Kraft Heinz company will be ceasing production at their Campbell facility. The company has worked with state officials to delay closure of the plant by 12-24 months, while they search to find a company to purchase the building to retain employees. H.J. Heinz Co. originally purchased Kraft Foods Group Inc. in July of 2015.
Schuyler County Partnership for Economic Development (SCOPED) Executive Director Judy McKinney Cherry said while the number of Schuyler County residents who work at the plant are not reported by the Department of Labor, there are approximately 50 Schuyler residents who commute to Campbell for work, according to 2013 census data. She said of those 50, some 23 are known to work in the goods producing sector. Cherry noted she is optimistic the plant will find a new buyer before it is closed.
"I am bullish they will find a producer or manufacturer who will come in and use that site," Cherry said. She added the facility has had recent capital investment, is already permitted and has a workforce that is ready to go, which means the site should have good value for prospective buyers. Cherry mentioned this makes the facility a positive asset that would not be a drain on any other company who may purchase it.
This is part of a downsizing effort by Kraft Heinz that will close seven plants in the U.S. and Canada, eliminating 2,600 jobs, roughly 14 percent of its North American factory workforce. The newly merged food company announced this plan Wednesday, Nov. 4. The facility produces Polly-O String Cheese, Mozzarella Cheese and other Italian cheese varieties.
The plant was Kraft Heinz's top priority for closure, but a state effort to help save the 393 jobs at that facility secured a commitment from Kraft Heinz to delay the closure and continue to operate the facility for at least the next 12 to 24 months. The company will now work with state, federal and local officials to help find a strategic buyer for the facility that would keep the plant open and retain the 393 jobs. The company has also agreed to offer any employees leaving the Campbell facility first choice for new positions at the Avon and Lowville plants.
According to Kraft Heinz, the closures will take place over the next two years as part of a plan to save $1.5 billion in operating costs by the end of 2017. Additional plants slated for closure are in California, Maryland, Pennsylvania, Wisconsin and Ontario. The plants make a range of products, including cold cuts, salad dressing, macaroni and coffee.
Gov. Andrew M. Cuomo and U.S. Senator Charles Schumer also announced Wednesday an agreement has been reached to save at-risk Kraft Heinz facilities which employ nearly 1,000 workers throughout upstate New York. The agreement will ensure Kraft Heinz preserves a significant employment base throughout New York State for years to come and paves the way for additional investment and growth at a number of Kraft Heinz facilities. Under the agreement, Kraft Heinz will continue operating the Avon, Walton and Lowville plants. Additionally, Kraft Heinz will defer its planned closure of the Campbell plant for a period of 12 to 24 months, during which time the company will work with state, federal and local officials in an effort to identify a new operator who would retain the plant's existing employment. The state and company are also committing to each invest at least $20 million to support and modernize Kraft Heinz's Upstate operations.
The agreement reached between Kraft Heinz and New York State will reduce the initial 939 total planned layoffs over the next 12 to 24 months. Additionally, the agreement will cap the net job reduction in New York State to 280 at most, over the next five years and likely reduce the planned reduction or eliminate it altogether through the potential sale of the Campbell facility and the expansion of the Avon facility.
"The prospect of these across the board closures was very real and not only would have devastated these communities, but caused ripple effects in New York's dairy industry and beyond," Cuomo said. "This agreement reverses course and, saves hundreds of local jobs and commits Kraft Heinz to invest millions of dollars in the upstate economy, with the potential for job increases in the years to come."
"After any merger that involves an important upstate company like Kraft that employs so many hundreds of workers and supports so many dairy farmers, I worry about any potential negative impacts on our Upstate New York jobs," Schumer added. "New York Kraft factories in Avon, Walton, Campbell and Lowville were in the crosshairs, and thousands of families were at severe risk of losing their jobs. 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. It's a win-win deal that will be good for Kraft Heinz and good for retaining and growing jobs in Upstate New York."
However, State Senator Tom O'Mara (R,C--Big Flats) expressed his disappointment Wednesday with the governor's plan, which helps preserve other plants in the state but leaves the Southern Tier facility in danger of closing.
"While the agreement is welcome news for the other communities with Kraft plants that are being saved under the Cuomo-Schumer agreement, it's little more than a reprieve of the Campbell plant's execution day by 12 to 24 months and the loss of these precious manufacturing jobs," O'Mara said. "In other words, the Southern Tier gets the short end of the stick again. [...] New York State is investing $20 million to prevent the closure of three upstate Kraft Heinz plants, with maybe, 'maybe' an option for 110 of the Campbell employees to relocate to Lowville. [...] Great news for Lowville, but this merely shifts jobs out of the devastated Southern Tier."
O'Mara noted jobs being moved out of the Southern Tier puts communities, farmers, families and small businesses at risk. He said the ripple effect beyond the Kraft employees will be felt by area dairy farms, trucking companies and property taxpayers.
"It will be imperative that we continue doing anything and everything possible at the local, state and federal levels to keep this plant open in some capacity and protect as many jobs as we can for the long term," O'Mara said.
This agreement comes following the merger of Kraft and the H. J. Heinz Company engineered by 3G Capital this summer. The merger triggered an internal company review which put the facilities at Avon, Walton and Campbell in line for closure -- thereby reducing their total employment in New York State by 939 jobs and leaving Lowville as the company's only facility in New York State. Upon hearing of the merger and associated review, Cuomo and Schumer each contacted Kraft Heinz CEO Bernardo Hees to express the urgency of retaining employment in New York, and worked collaboratively with the company in negotiating this deal in order to save as many jobs as possible and ensure future investment and growth.