Nabisco to Cut Chicago jobs, Send Some Work to Mexico

Nabisco to Cut Chicago jobs, Send Some Work to Mexico

Mondelez International (Nabisco) will lay off half of its 1,200 employees in its bakery on Chicago’s Southwest Side after deciding to make a major investment in a Mexico plant rather than its long-standing facility here.

The Nabisco company decided not to make a $130 million upgrade to the facility, the company’s largest U.S. bakery, which dates to the 1950s, because the three unions that represent workers either did not make a proposal to keep the work or their concession packages were inadequate, said Laurie Guzzinati, a Mondelez spokeswoman.

The layoffs at the plant, at 7300 S. Kedzie Ave., will occur over the next year.

The facility makes BelVita, Mini Chips Ahoy and Cheese Nips, among other products, and those will continue to be made in Chicago on seven production lines that will be upgraded. Nine other lines will shut down, and that work will be transferred to four state-of-the-art production lines in Salinas, Mexico.

Mondelez’s Guzzinati could not say how much the company would spend on revamping the remaining lines in the Chicago facility.

The new production lines will make some of Nabisco’s most popular products, including Oreo, Ritz and Grahams.

This spring, Mondelez began working with the three unions that represent workers at the plant, as the company worked to decide whether to make an investment in what’s more commonly known in Chicago as the Nabisco plant or to commit the dollars to a plant that opened last year in Salinas.

RELATED ARTICLE: Nabisco Ships 600 Jobs to Mexico. Time To Give Up Oreos

There were no plans to close the facility entirely, according to the company, but it was key to move more of its production to more efficient manufacturing lines, in some cases replacing decades-old equipment, the company said at the time. The “lines of the future” can be installed much more quickly and produce twice the capacity in half the space of the older equipment, the company said in the fall of 2013.

One local union chief said Mondelez’s decision to open a plant in Salinas last year made it clear that the food giant had already made the decision to transfer some of its Chicago-based production there.

“The only reason they made an appeal to Chicago is so that they can try to get $46 million in concessions back from Chicago,” said Ed Burpo, president of the Bakery, Confectionery, Tobacco Workers and Grain Millers Local 300, which represents about 1,000 workers at the plant and did not submit a proposal. “The company had already made the decision where those lines were going.”

The other unions that represent workers at the facility, District 8 of the International Association of Machinists and Aerospace Workers and Local 399 of the International Union of Operating Engineers, could not be immediately reached for comment.

Union representatives have already seen their ranks depleted. The factory once employed more than 4,000 before some newer machinery was installed.
The Chicago facility has been, by all accounts, crucial to Mondelez’s North American bakery business, in part due to its location and because its skilled workers know how to make a variety of cookies and crackers.

Then in May, the company said it planned to close nine of its 16 lines. Union reps met with the company and sent a letter to Mayor Rahm Emanuel and President Barack Obama, imploring them to intervene.

Spokeswoman Guzzinati said Mondelez had discussions with the city, but it was not approached with a specific incentive proposal. The company, she added, was hoping for input from the unions to address the $46 million gap between the cost of operating in Chicago and in Mexico. “We invited the unions to bring forward any input they had and thoughts they had to address that gap,” said Guzzinati, adding that the unions’ “input did not provide a measurably impactful way to close the gap” between the costs in Chicago and Mexico.

Along with the Chicago plant, Mondelez’s other facilities in the Chicago area include a Naperville plant focused on Triscuits and a confectionary plant in the Rockford area that makes such products as chewing gum. Guzzinati said the company employs about 3,000 in Illinois.


Comments

  1. Corporate greed strikes again.

  2. Just throwing out the "$46 million gap" figure tells us nothing!

    • The $46 million gap’ comment was an implied statement. They wanted tax or worker concessions to cover that production cost loss. In other words ‘You pay, we’ll play’. Another link, to a Reddit site, further explains costs associated with production with regards to refined sugar prices in the US. There is much more to this than meets the eye.

  3. Maybe we should work to get rid of the sugar tariff that makes it so much cheaper in Mexico:

    http://www.npr.org/2013/03/28/175569499/farm-bills-sugar-subsidy-more-taxing-than-sweet-critics-say

    Just sayin’

  4. nina stone Says: August 15, 2015 at 6:44 pm

    shame on you

  5. Barbara Cram Says: August 24, 2015 at 9:15 pm

    I not buy any nabisco product if MADE IN MEXICO

    • They have lost all of my business by going to mexico. not 1 penny will i spend. I don’t speak alone on this. I work in 2 hospitals all my colleagues are saying the same thing.

  6. I won’t eat the York Peppermint Patties that are now made in Mexico, and the same will be true of Oreos. Irene Rosenfeld should have given more thought to sanitation standards before throwing away all those American jobs. You shot yourself in the foot, you greedy woman!

  7. I heard one of the effected workers interviewed on the radio this morning. It had me back up on that fence, waffling about the place of unions at this time in our history. The line work is making $26.00/hr. While not unskilled, that job could probably be taught in a few days/weeks, and would not require advanced education. There are teachers not making that salary. So did that labor pool price themselves out of their jobs? There is a huge community of working class people living in the neighborhoods that surround the plant, some with extended family and parents who were employed there. It was a sad nostalgic moment to hear the plant is moving some lines off shore. Undoubtedly, the rest will follow in due course once TIF obligations are met. My father retired from that plant, was active in the union, went through a couple of strikes. It was a sad nostalgic moment to hear of another business surrendering to the “giant sucking sound”. I am not an economist, and don’t have any answers, but it feels bad nonetheless.

    • $26/hr for what is really a non-skilled labor job is ludicrous. The average family of four in the US earns about $56k/yr. Considering that usually constitutes a 2 income household, how do the union reps at Nabisco interpret that to mean that their workers, pushing cookies down a conveyor belt, should be paid that kind of wage? Most college educated people in the US aren’t making that kind of money.

    • NICOLE YOUNG Says: June 5, 2016 at 8:58 pm

      Yes that is so true! I have a college degree and i don’t make 26$ an hour! For pushing some cookies on a belt ? I am a teacher at a daydaycare! My job is physically and mentally draining! That is the kind of money all teachers should be making! People do not realize how important early education is. I would be happy as hell if i was getting that kind of money an hour! I feel bad they are losing there jobs.

      • A teacher should know when the proper “there” is “their.”

        • NICOLE YOUNG Says: July 21, 2016 at 8:34 am

          I do know the difference! I don’t need you to tell me that. I made a typo. My bad! I’m only human! I guess you never made a mistake huh??

  8. Oreo cookies and Nabisco products are made with Trans-fats that will cause you cardiovascular disease , its best they go away. Nabisco makes pig food for pigs.

  9. mexicans..errywhur Says: September 17, 2015 at 9:11 pm

    most of the US based employees ARE Mexicans, so they are actually not technically sending americans jobs to mexico,

    they are sending the jobs of immigrant mexicans, who came to steal jobs from americans, back to the current mexican workforces home nation.

    ending immigration of job thief 3rd world aliens and ending trade scams designed to reward outsourcing, go hand in hand. what do I care if a mexican loses the chicago job he should not be working anyway?

  10. Maybe not corporate greed as much as high up union officials padding their pockets; not the workers they’re supposed to be representing.

    • Any of us who worked for multi-national corporations who off-shored millions of middle class jobs realize there’s no “maybe.” Unions gave us the 40 hr work week, workers comp, ended child labor, and myriad other abuses. It’s true power corrupts, and unions have their share of that, but it’s a drop in the bucket compared to the unbridled greed of corporations. Check out the article today about Apple’s tax shenanigans in Italy, their Asian factories that have suicide nets b/c of the working conditions. Do the obscene executive compensation packages bother you as much as unions’ efforts to keep the middle class afloat? Strange ethics.

  11. Robert vickers Says: March 22, 2016 at 7:21 pm

    I will not buy Nabisco. Probuct

    • Robert vickers Says: March 22, 2016 at 7:27 pm

      I think you are being unfair to your employee for all time they have put in for to be one of bigges cookie and crackers manufacture company. You are just think of your self and your pocket.

  12. candis paceley Says: May 2, 2016 at 12:48 pm

    I will NOT buy Nabisco Products in the future. My family has bought Nabisco Products made in the U.S.A. for MANY years! We will NO longer support Nabisco or any other company that does NOT support U.S.A.

  13. […] so many jobs to outsourcing over the years and why several companies such as Nabisco and Boeing are threatening to leave in the future. It is also the number one driving factor behind the fact that small business ownership in America […]

  14. John Stoub Says: May 10, 2016 at 8:46 pm

    I think the US should tax the imports of NABISCO products that have been made in Mexico to the toon of 46 million dollars to close the gap.

  15. lejean jones Says: May 15, 2016 at 8:18 am

    IRENE ROSENFELD should give up some of the BIG BUCKS that she is making FOR THE GOOD OF THE COMPANY,NOT the workers who make PENNYS compared to her wages MONDELEZ needs to STOP THE GREED; BE MORE CONCERNED ABOUT YOUR WORKERS that do all the work

  16. This is what happens when everyone wants $15.00 an hour, paid vacation, paid sick days, paid maternity/paternity, paid FMLA, medical/dental benefits, and a pension to boot. I dont blame Nabisco for leaving.

  17. And people wonder why Donald J Trump is sweeping up Americans? JOBS!

  18. I am really interested in which products as I am not interested in purchasing food that is not made in the US. Mexico does not have the oversight that we do. I am worried about food safety to the public along with jobs.

  19. Let’s all band together snd boycott ALL NABISCO PRODUCTS! ! A Friend at my mom’s church has cancer and her husband worked at Nabisco, now they do not have any health insurance! !!

  20. I will not buy products anymore

  21. It is very sad to hear the Oreo is going to Mexico therefore no more Oreos for me. it’s all about greed plain and simple

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