Kraft Heinz to consolidate North American manufacturing facilities
Kraft Heinz, Pittsburgh, Pa., announced plans to close seven manufacturing facilities— Fullerton, Calif.; San Leandro, Calif.; Federalsburg, Md.; St. Marys, Ontario, Canada; Campbell, N.Y.; Lehigh Valley, Pa.; and Madison, Wis.
“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,” says Michael Mullen, senior vice president of corporate and government affairs. “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, Ill., facility to other factories within our network, which 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,” adds Mullen. “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,” he adds. “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.”
“Additionally, Kraft Heinz is announcing that in 2016 we will move Oscar Mayer and our U.S. meats business unit from Madison, Wis., to our co-headquarters in Chicago. The move will bring 250 jobs to the Chicago area,” says Mullen. “Members of the Oscar Mayer and U.S. 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.”