Leamington, Ont. – H.J. Heinz Co. announced that it is closing three plants, two in the U.S. and one in Leamington.
The closure will leave 740 employees and hundreds of seasonal workers without work.
The news is a huge blow to the community. John Paterson, Leamington’s mayor, was emotional, reports the WindsorStar.com, saying he wasn’t going to give up and had already reached out to all levels of government for help. Heinz is the municipality’s biggest employer and taxpayer. Half of Ontario’s $52-million annual processing tomato crop was contracted to Heinz.
Employees were given letters from the company with notice of the closure on Thursday. The closure is set for mid-2014.
In its letter to employees, reports the WindsorStar.com, Heinz said the decision to close the plants was based on excess capacity in its North American manufacturing system. The other two plants are in Florence, S.C. (with 200 employees) and Pocatello, Idaho (with 410 employees).
The CBC.ca reports that the company plans to offer severance benefits, outplacement services and other support to help affected employees find other work.
Sandra Pupatello, who is the CEO of the WindsorEssex Economic Development Corporation, says the news is harsh but it could also open up opportunities for new investors, reports the WindsorStar.com.
Tom Bain, Essex County warden and also one of the political leaders who gathered in Leamington to hear the news first-hand, said the negative spinoff effects would be “really unbelievable … it would have a devastating affect, not only on Leamington but on Essex County and Chatham-Kent as well,” reports the WindsorStar.com.
The privately owned maker of ketchup and other food products was bought earlier this year by Warren Buffet’s Berkshire Hathaway and 3G Capital, a Brazilian investment firm.
McDonald’s Corp. announced on Oct. 25 that it was ending its 40-year relationship with Heinz after the company appointed Bernardo Hess, ex-CEO of Burger King to head the Pittsburgh-based company. Burger King has been controlled by 3G since 2010.
The CBC.ca reports that Heinz would use 225,000 tons of tomatoes each year at $93-$95 a ton.