Mondelez International has revealed jobs will be lost at its biscuit plant in Chicago, whether or not the company chooses the facility – and not one in Mexico – for fresh investment.
The US group is planning to invest in its biscuit production in North America and is weighing up whether to spend at its plant in Chicago or a newer site in the Mexican city of Salinas.
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As part of plans to "modernise" its manufacturing network in the region, the Oreo maker is set to close nine of the Chicago site's 16 lines. However, Mondelez is also considering where to spend US$130m on four new lines, either in Chicago or at its plant in Salinas.
Mondelez held talks with union representatives for staff at the Chicago site on Friday (15 May).
Speaking to just-food today, a Mondelez spokesperson said if the four lines were installed at the Chicago plant the company's "projections indicate that there is an annualised gap of more than $46m in higher operations costs and to offset higher capital expense".
The spokesperson said: "In either scenario, there will be impact to employees and to the lines in the Chicago bakery. If the Chicago bakery were to be selected for the full investment, we are currently projecting reductions of approximately 300 positions in Chicago. If the investment is made in Salinas, we are currently projecting reductions of approximately 600 positions in Chicago. We have invited the unions to provide us with any input they may have, particularly but not limited to addressing the financial gap, before the company makes a final decision."
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By GlobalDataShe added: "In either scenario, the Chicago bakery will remain an important site in our network. To reiterate, no decisions have been made beyond our commitment to the investment."
The four lines would replace nine existing lines at the Chicago site. Mondelez plans to close the nine lines even if it decides to invest at the Salinas plant.
In a statement, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) criticised Mondelez.
?It claimed the company "essentially told the BCTGM that the workers had to come up with $46m in annual savings at the Chicago facility for the company or it would take the $130m planned investment to its Salinas, Mexico bakery". The union said: "And, even with the $46m savings there would still be severe job cuts for workers at the Chicago bakery."
BCTGM International Vice President Jethro Head added: "This company has no idea nor does it care to know of the decades of contributions made by generations of employees and their families here in Chicago. It is deeply offensive to our members that a Chicago-based company would pit its good, hardworking and loyal Chicago workforce against low-wage workers in another country."
