Oscar Mayer in Madison to close, Kraft Heinz plans new Davenport plant
MADISON (WKOW) --- The Madison Oscar Mayer plant will be closing in early 2017, according to UFCW Local 538 President Doug Leikness.
Leikness tells 27 News that he just got word of the announcement this afternoon.
The Madison plant employs 1,250 employees according to their website.
Mayor Paul Soglin announced the news at a press conference Wednesday afternoon. Soglin says he will not be making any city budget amendments, but will work with the county and state to help find jobs for staff.
The following is a statement from the company that owns the plant, Kraft Heinz, given to employees:
“Following an extensive review of the Kraft Heinz North American supply chain footprint, capabilities and capacity utilization, we are announcing the closure of seven manufacturing facilities in North America: Fullerton, California; San Leandro, California; Federalsburg, Maryland; St. Marys, Ontario, Canada; Campbell, New York; Lehigh Valley, Pennsylvania; and Madison, Wisconsin. In a staged process over the next 12-24 months, production in these locations will shift to other existing factories in North America.
We are also planning to move production from our existing Davenport, Iowa, facility to a new, state-of-the-art location within the Davenport area; and move part of our cheese production from our Champaign, Illinois, facility to other factories within our network, which will create will make Champaign a center-of-excellence in dry and sauce production. Both moves will take up to two years to complete.
Our decision to consolidate manufacturing across the Kraft Heinz North American network is a critical step in our plan to eliminate excess capacity and reduce operational redundancies for the new combined Company. This will make Kraft Heinz more globally competitive and accelerate the Company’s future growth.
We have reached this difficult but necessary decision after thoroughly exploring extensive alternatives and options. This action will reduce the size of our North American factory-based employee population by a net number of approximately 2,600 positions.
At the same time, we will invest hundreds of millions of dollars in improving capacity utilization and modernizing many of our facilities with the installation of state-of-the-art production lines.
We will treat our people with the utmost respect and dignity. At the appropriate time, affected employees will receive severance benefits, outplacement services and other support to help them pursue new job opportunities. Kraft Heinz fully appreciates and regrets the impact our decision will have on employees, their families and the communities in which these facilities are located,” Michael Mullen, SVP of Corporate & Government Affairs.
“Additionally, Kraft Heinz is announcing that in 2016 we will move Oscar Mayer and our US Meats Business Unit from Madison, Wisconsin to our co-headquarters in Chicago. The move will bring 250 jobs to the Chicago area.
Members of the Oscar Mayer and US Meats Business Unit will have the opportunity to move with the business to Chicago. The move centralizes all our U.S. Business Units to our co-headquarters of Chicago and Pittsburgh, which will drive increased collaboration and efficiency.”
DAVENPORT, Iowa (AP) -- The new Kraft Heinz Food Co. is planning to build a high-tech food processing factory in Davenport, but it's not clear what the plan means for its longtime downtown plant. The company is expected to discuss its plans Wednesday at the plant, which employs more than 1,200 workers and has long made bologna and other lunch meats. On Wednesday night, the Davenport City Council is expected to discuss a financial assistance package for the proposed $203 million factory at a business park on the city's northwest side. City documents say the plan would retain "at least 475 full-time positions." Jerry Messer, president of a union that represents workers, says he's anxious to learn more. He says the downtown plant has "been one of the foundations for the city of Davenport."