Workers at the Nabisco plant in Chicago were expecting good news – but what they received instead left them devastated – and soured on Oreos.
Nabisco’s plant in Chicago, housed in a 10-story, 1,800,000 square foot building, is the largest bakery in the world, with over 1,200 employees, and producing 320 million pounds of cookies and snack crackers every year. It now operates under the corporate name Mondelez International.
The facility needed a facelift, and employees had heard rumors about a $130-million investment to upgrade the equipment and add new production lines. Workers were excited about the pending announcement – until it came in May 2015.
The investment would indeed be made and new equipment added – at a new plant in Salinas, Mexico – where the minimum wage is about $4 per day. Of the 1,200 employees in the Chicago plant, 600 would be laid off – replaced by the new workers operating the brand new machines in Mexico.
To add insult to injury, the company tried to blame the workers’ union on the job losses, claiming it had made an offer to the union to keep producing Oreos in Chicago, but the offer was rejected.
Of course they rejected it, explains Jim Hightower, in writing for the Chicago SunTimes. The move to Mexico is supposedly going to save the company $46 million a year, so if the employees would accept reductions in wages and benefits to make up for that amount, they could keep their jobs…. And the longtime, dedicated and productive employees would see their incomes reduced to poverty level.
Hightower reports that Mondelez banked a $7 billion profit in 2015. He concludes:
“If its executives are so inept that they can’t find an honest way to fill a $46-million hole, they should dock the pay of their top three executives by that amount. They can damn sure afford it, for they totaled $37 million in compensation last year. CEO Irene Rosenfeld alone took a $20 million paycheck in 2015, bringing her eight-year total pay and benefits to almost $200 million.”
Sure enough, the total compensation for the top three executives for 2015 was as follows:
$19.7 million Irene Rosenfeld, CEO
$ 9.9 million Mark Clouse, Exec. VP & Chief Growth Officer
$ 7.2 million Brian Gladden, Exec. VP and Chief Financial Officer
Rosenfeld’s compensation package included about $526,000 in executive perks, including personal use of the company airplane.
At the company’s annual meeting on May 18th, Rosenfeld took questions (for the first time) from some of those affected by the layoffs, defending the decision to move 600 jobs to Mexico as necessary to compete in a global economy. Some employees begged her to reverse the decision.
Rosenfeld responded: “We take these decisions very seriously. We fully understand the impact it has on the individual and their families. We made this decision over a year ago. We did move approximately 600 jobs to Mexico to run upgraded equipment that runs much faster than the lines we have here. … Chicago will continue to be a cornerstone of our manufacturing assets in this country. … But we did make a decision that was predicated on our ability to make quality products at an affordable price for our consumers.”
Outside, protesters chanted, and a couple of men even stomped on bags of Oreos in frustration.
Kraft Foods split off its grocery business in 2012, retaining the Kraft name, and re-branded the snack-food products as “Mondelez International”, which includes Nabisco, Triscuit, Planters, Ritz, Chips Ahoy and Oreos.
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