Manufacturing Unemployment Rates Rise
August 20, 2008 -- With an unemployment rate of 5.7 percent, the month of July marked the seventh consecutive month of job declines in the United States, according to the Bureau of Labor Statistics (BLS) of the U.S. Department of Labor. Over the past 12 months, the number of unemployed persons has increased by 1.6 million, and the unemployment rate has risen by 1 percentage point.
Relevant to the consumer goods industry, manufacturing employment fell by 35,000, bringing losses over the past 12 months to 383,000. In the second quarter of 2008, BLS also reports that the manufacturing industry had 334 extended layoff events, the highest second quarter total since 2003.
Consolidation and Job Cuts Abound
In an uncertain economy, consumer goods companies are looking to consolidate operations to boost manufacturing efficiency and cut costs. But with consolidation, so come facility closures and job cuts -- and this summer has seen its fair share of both.
In July, Pfizer announced that it would cut 275 jobs from its manufacturing operations in Kalamazoo County, Mich. This latest development is in line with plans announced last year to cut about 10,000 jobs -- or 10 percent of its workforce worldwide -- and close five facilities.
Gillette's Massachusetts work force will be reduced by almost 10 percent to 2,000 employees by 2013 as The Procter & Gamble Company (P&G) seeks to create space in its South Boston Manufacturing Center for new technology platforms. The manufacture of Mach3 and older kinds of Venus cartridges and razor handles will be transitioned to other sites, including Mexico and Poland. According to P&G Spokesperson Michael Norton, "We will need approximately 215 positions less than what we have today at the South Boston Manufacturing Center, the majority of which it is believed will be managed through retirement or voluntary separation packages."
And perhaps even more severe are changes happening within Pilgrim's Pride Corporation. The company has taken a number of steps recently to strengthen its competitive position amid a very difficult operating environment, including plans to idle a chicken processing plant in Clinton, Ark., and a further-processing facility in Bossier City, La. Over the past six months, Pilgrim's Pride also announced production cutbacks for the second half of fiscal 2008, the closure of a plant in North Carolina and seven distribution centers, and the consolidation of its tray-pack operations in El Dorado, Ark., to six other case-ready sites. These changes combined will result in the elimination of nearly 2,300 positions.
Relevant to the consumer goods industry, manufacturing employment fell by 35,000, bringing losses over the past 12 months to 383,000. In the second quarter of 2008, BLS also reports that the manufacturing industry had 334 extended layoff events, the highest second quarter total since 2003.
Consolidation and Job Cuts Abound
In an uncertain economy, consumer goods companies are looking to consolidate operations to boost manufacturing efficiency and cut costs. But with consolidation, so come facility closures and job cuts -- and this summer has seen its fair share of both.
In July, Pfizer announced that it would cut 275 jobs from its manufacturing operations in Kalamazoo County, Mich. This latest development is in line with plans announced last year to cut about 10,000 jobs -- or 10 percent of its workforce worldwide -- and close five facilities.
Gillette's Massachusetts work force will be reduced by almost 10 percent to 2,000 employees by 2013 as The Procter & Gamble Company (P&G) seeks to create space in its South Boston Manufacturing Center for new technology platforms. The manufacture of Mach3 and older kinds of Venus cartridges and razor handles will be transitioned to other sites, including Mexico and Poland. According to P&G Spokesperson Michael Norton, "We will need approximately 215 positions less than what we have today at the South Boston Manufacturing Center, the majority of which it is believed will be managed through retirement or voluntary separation packages."
And perhaps even more severe are changes happening within Pilgrim's Pride Corporation. The company has taken a number of steps recently to strengthen its competitive position amid a very difficult operating environment, including plans to idle a chicken processing plant in Clinton, Ark., and a further-processing facility in Bossier City, La. Over the past six months, Pilgrim's Pride also announced production cutbacks for the second half of fiscal 2008, the closure of a plant in North Carolina and seven distribution centers, and the consolidation of its tray-pack operations in El Dorado, Ark., to six other case-ready sites. These changes combined will result in the elimination of nearly 2,300 positions.
Expansion and Growth for Others
But while some consumer goods companies are busy consolidating, others are busy building manufacturing facilities and creating more jobs despite economic downturn.
Kraft Pizza Company, a business within Kraft Foods Inc. and the maker of DiGiorno frozen pizza, recently broke ground for the expansion of its manufacturing plant in Little Chute, Wis. The pizza plant will add 100,000 square feet and a new pizza crust bakery line and assembly line will be installed, enabling a significant increase in production capacity. Employment at the plant is anticipated to increase by approximately 300 with the expansion.
Meanwhile, consumer products giant Newell Rubbermaid Inc. will spend $12.5 million to open a new ink manufacturing factory in Manchester, Tenn, where it will design and test inks, make ink and store finished goods. The new facility, scheduled to open in December 2009, will employ 60 people who are expected to transfer from an existing ink facility in Shelbyville, Tenn., and more jobs are expected to be added during the next three years.