General Mills to Close 2 Plants, Cut 600 Jobs

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General Mills to Close 2 Plants, Cut 600 Jobs

By The CGT Staff - 01/28/2015
General Mills Inc. announced it will close a cereal plant and a yogurt factory, eliminating up to 600 jobs, in an effort to cut costs and offset the sluggish U.S. demand for cereal, cake mix and other packaged foods. It also announced preliminary plans to close two manufacturing facilities in New Albany, IN and Midland, Ontario.
 
The maker of Cheerios and Wheaties cereals and Yoplait yogurt said the plant closures are part of its previously announced effort to save $100 million annually by its fiscal 2017 through consolidation of food manufacturing and elimination of unused production capacity.
 
The company announced its decision just one day after reporting a 5% decrease in U.S. retail sales for the last quarter – including a 9% drop for cereal – and its total profit dropped 25%. The factory that makes Yoplait yogurt in Methuen, MA is slated to close next summer. The plant, which General Mills purchased in 1993, employs 144 people.
 
By the end of next year, the company will close a cereal plant in Lodi, CA, which employs 430 employees and has been operating since 1947, produces cereals such as Cinnamon Toast Crunch, Lucky Charms and Honey Nut Cheerios, among others.
 
Other food makers, including Kellogg and Mondelez International, have also announced efforts to consolidate manufacturing and reduce costs in an effort to better contend with softer demand from U.S. consumers – General Mills announced its capacity reduction in June, several months after its rivals.
 
General Mills estimates the industry's sales were down 4% in the latest quarter. However yogurt, driven by Greek-style options that consumers prefer, captured much of the breakfast business the company was losing. In June the company said it would expand capacity for brands like Yoplait Greek and Fiber One granola bars.