Heinz Will Close Operations At Three North American Plants

By Sam Lewis

Condiment maker optimizing operating efficiency will eliminate 1,350 jobs

World-famous Ketchup maker Heinz was purchased by Warren Buffet’s Berkshire Hathaway and 3G Capital back in February. The company now will be boarding up the doors at three of its North American plants, eliminating 1,350 jobs in an effort to make the company more efficient over the next six to eight months.

Buffet’s capital groups borrowed $12.6 billion of the $23.3 billion transaction’s total to complete the deal, and are now exhausting cost-cutting options like limiting company paper use, reducing electricity costs, even ground the company’s planes, to repay the loan. Upon the announcement of the deal, Heinz began eliminating workers, as many analysts predicted. Over the summer, Heinz cut 600 office jobs in North America, 350 of which were in the company’s hometown, Pittsburgh. In a September regulatory filing, Heinz reported nearly 1,200 employees had been affected by the restructuring of the company. New management was implemented immediately after the transaction, including CEO Bernardo Hees, who was responsible for Burger King’s turnaround. This move was not held in high regard by McDonald’s, which consequently ended the companies’ 40 year relationship after the new boss was appointed.

According to a statement from Michael Mullen, SVP of of corporate and government affairs at Heinz, the company’s Florence, SC, Pocatello, ID, and Leamington, Ontario, Canada plants will be closing. The Florence, SC plant, which manufactures Smart Ones frozen foods and employs 200 people, has only been open since 2009. Pocatello, ID’s plant also manufactures frozen meals, but employs more than double the workers of the SC plant. The Leamington, Ontario, Canada plant has been open for longer than a century, manufacturing mainly ketchup, and employing 740 people. The plant closures are “a critical step in our plan to ensure we are operating as efficiently and effectively as possible,” Mullen says. Additionally, Mullen states the company will shift these plants’ production to five existing plants in Canada, CA, IA, and OH, creating 470 jobs for those sites.

“We reached this decision after thoroughly exploring extensive alternatives and options,” says Mullen. “Heinz fully appreciates and regrets the impact our decision will have on employees and the communities in which these factories are located.” When the most recent plant closures are final, Heinz will be left with approximately 6,800 salaried and part-time workers across all of its North American facilities.

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