General Mills, Minneapolis, announced today (Sept. 13) details surrounding the closure of its Vineland, N.J., Progresso soup plant, according to a news release. The plant's 370 employees will receive a severance package and transition benefits, per the company's agreement with union officials representing the workers.
The plant will officially close by the first quarter of General Mills' fiscal year 2018, after being in operation since 2001. The company's Progresso soup production will then move to Hannibal, Mo. General Mills announced a tentative decision on July 21, to close the facility, subject to negotiation with union officials, which are now complete.
The company says it will begin to review the necessary processes to transition production to other U.S. facilities. The company is also reported to be moving forward with plans to sell or close five plants in the U.S., Brazil and China, eliminating about 1,400 jobs worldwide. The cuts would represent about a 3.6-percent decrease in the workforce at General Mills, which had roughly 39,000 employees in its 2016 fiscal year, ending in May.
The plant closures are part of a massive restructuring the company says will better align its production and investments. A new growth plan was outlined along with its latest earnings report. In the case of Progresso, canned soup sales have lagged in recent years, due primarily to canned soup's perception as heavily processed and to the containers potentially made with a BPA lining.
The company, which produces Cheerios cereal and Yoplait yogurt among other brands, has been cutting costs recently to compensate for declining U.S. sales. In addition, reports say the company also decided it will sell a facility that makes dry baking mix products in Martel, Ohio to Mennel Milling Co. Mennel would act as a supplier to General Mills once that $18-million sale closes, which is expected in the second fiscal quarter of 2017. The sale would result in cuts of roughly 180 positions.
Overseas, General Mills will close snack-manufacturing facilities in Brazil and China, eliminating a total of about 860 positions across the two countries.