General Mills looking to scale back US production network

General Mills looking to scale back US production network

General Mills today (16 July) announced plans to close two more plants in the US, the latest consequences of the Cheerios owner's review of its manufacturing network in North America.

The company, which has seen sales in the US come under pressure in recent quarters, said it had told union officials of its "tentative decision" to shut a site in West Chicago in Illinois.

Elsewhere, General Mills said it had decided to close a snacks plant in Joplin in Missouri.

The future of the Illinois facility is "pending negotiations and consultation" with unions. General Mills said it wanted to close the site to "eliminate excess cereal and dry dinner capacity in our US retail supply chain".

If both sites are closed, around 620 positions would be affected - 500 in West Chicago and 120 in Joplin.

General Mills said it expects to incur around US$81m in costs from the closures in fiscal 2015/16. The West Chicago plant is lined up to be closed by the end of fiscal 2018/19. The total costs from closing that site will rise from $70m in General Mills' current financial year to around $120m.

In February, General Mills confirmed it would close a plant in New Albany, Indiana, hitting around 400 staff. A month earlier, the Green Giant maker set out plans to shut a site in Midland in the Canadian province of Ontario, a move set to affect 100 jobs. Both facilities are expected to shut by the middle of 2016.

Last autumn, the company said it would close two other facilities in the US, with the loss of around 570 jobs. A month later, General Mills outlined plans to cut a further 700 to 800 posts, primarily in the US.

In April, General Mills announced plans to expand production at a site in the US. The company said it would spend $250m on increasing capacity at a facility in Murfreesboro in Tennessee.