AVON – Several upstate New York Kraft plants which have been the subject of many worried rumors since Friday are now guaranteed to remain open for at least the next 5 years as part of an agreement between Kraft-Heinz and New York State that was reached on Wednesday.
According to a press release from Governor Andrew Cuomo and U.S. Senator Charles Schumer, an agreement will reverse the planned closure of the Avon facility, which produces Lunchables and Cool Whip products and employs a total of 405 people as the largest private sector employer in Livingston County.
“The prospect of these across-the-board closures was very real and not only would have devastated these communities, but caused ripple effects in New York’s dairy industry and beyond,” said Governor Cuomo. “This agreement reverses course, saves hundreds of local jobs and commits Kraft-Heinz to invest millions of dollars in the Upstate economy, with the potential for job increases in the years to come. I thank Senator Schumer and Kraft-Heinz for working with us to protect jobs in these communities and help ensure the future of each of these plants.”
Under the agreement, Kraft-Heinz will continue operating the Avon, Walton and Lowville plants. Additionally, Kraft-Heinz will defer its planned closure of the Campbell plant for a period of 12-24 months, during which time the company will work with state, federal and local officials in an effort to identify a new operator who would retain the plant’s existing employment. The State and company are also committing to each invest at least $20 million to support and modernize Kraft-Heinz’s Upstate operations.
Kraft-Heinz facilities employ nearly 1,000 workers throughout Upstate New York. The agreement will ensure that Kraft-Heinz preserves a significant employment base throughout New York State for years to come and opens the door for investment and growth Kraft-Heinz facilities in Avon, Walton, Lowville, and Campbell.
“After any merger that involves an important Upstate company like Kraft that employs so many hundreds of workers and supports so many dairy farmers, I worry about any potential negative impacts on our Upstate New York jobs,” said Senator Schumer. “New York Kraft factories in Avon, Walton, Campbell and Lowville were in the crosshairs, and thousands of families were at severe risk of losing their jobs. But working together with Governor Cuomo we were able to craft a deal with Kraft-Heinz that saves these factories from closure; that protects jobs; and that invests in growth for our future in each of these communities. It’s a win-win deal that will be good for Kraft-Heinz and good for retaining and growing jobs in Upstate New York.”
The details of the agreement negotiated by Governor Cuomo and Senator Schumer are as follows:
In Walton, Delaware County, Kraft-Heinz will reverse the planned closure of the facility. The Walton facility employs 141 people and produces cottage cheese and sour cream. The facility was slated for closure and all 141 jobs would have been eliminated. The agreement reached today will save the Walton plant and all 141 jobs for at least 5 years, ensuring that there are no layoffs or reductions at the facility.
In Lowville, Lewis County, Kraft-Heinz will retain all of their existing employees at the facility. The Lowville facility employs 340 people and produces Philadelphia Cream Cheese products. In addition to retaining the jobs in Lowville, Kraft Heinz will add at least an additional 110 jobs at the Lowville facility over the next 5 years.
The Kraft-Heinz plant in Campbell, Steuben County, which produces Polly-O String Cheese, Mozzarella Cheese, and other Italian cheese varieties, was Kraft-Heinz top priority for closure. In an effort to help save the 393 jobs at that facility, Governor Cuomo and Senator Schumer secured a commitment from Kraft-Heinz to delay the closure and continue to operate the facility for at least the next 12 to 24 months, and to work with state, federal and local officials to help find a strategic buyer for the facility that would keep the plant open and retain the 393 jobs. The company has also agreed to offer any employees leaving the Campbell facility first choice for the new positions at the Avon and Lowville plants.
The agreement also includes plans for a matching capital investment from both Kraft-Heinz and New York State in the company’s Avon, Walton and Lowville operations. The State’s investment will be initially capped at $20 million over the next five years, provided the company also invests $20 million. If after those five years, Kraft-Heinz has not decreased their aggregate employment in New York State, and has invested at least $25 million in its Upstate operations, ESD will invest an additional $5 million, bringing the combined matching total investment to at least $50 million in Upstate New York.
The agreement will reduce the 939 total planned layoffs over the next 12 to 24 months. Additionally, the agreement will cap the net job reduction in New York State to 280 at most, over the next 5 years and likely reduce that planned reduction or eliminate it altogether through the potential sale of the Campbell facility and the expansion of the Avon facility.
This agreement comes following the merger of Kraft and the H. J. Heinz Company engineered by 3G Capital this summer. The merger triggered an internal company review which put the facilities at Avon, Walton and Campbell in line for closure – thereby reducing their total employment in New York State by 939 jobs and leaving Lowville as the company’s only facility in New York State. Upon hearing of the merger and associated review, Governor Cuomo and Senator Schumer each contacted Kraft-Heinz CEO Bernardo Hees to express the urgency of retaining employment in New York, and worked collaboratively with the company in negotiating this deal in order to save as many jobs as possible and ensure future investment and growth.