US wholesale baker and distributor Interstate Bakeries Corporation has announced plans to consolidate sales operations in Southern California by standardizing distribution and consolidating delivery routes.
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The company’s six bakeries within its Southern California profit centre, located in Pomona, Glendale, Los Angeles and San Diego, will continue to operate.
This is the fifth profit centre consolidation Interstate Bakeries has announced since the company began the second stage of its organizational restructuring. The company is undergoing a review of its ten profit Centres, identifying areas in which it can improve operating efficiencies in production, distribution, marketing and sales.
The company expects to complete the Southern California consolidation by 24 August 24 subject to bankruptcy court approval. The consolidation is expected to affect approximately 350 workers.
The company’s preliminary estimate of charges to be incurred in connection with the Southern California consolidation is approximately $2.5m, including approximately $1.5m of severance charges and approximately $1.0m in other charges, with virtually all such charges resulting in future cash expenditures. In addition, the company intends to spend approximately $3.5m in capital expenditures and accrued expenses to effect the consolidation.
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By GlobalDataInterstate Bakeries Corporation filed for bankruptcy protection on September 22, 2004, citing liquidity issues resulting from declining sales, a high fixed-cost structure, excess industry capacity, rising employee healthcare and pension costs and higher costs for ingredients and energy. The company continues to operate its business in the ordinary course as a debtor- in-possession.
