Dive Brief:
- A Mondelez International Oreos and Chips Ahoy plant in Chicago, the company's biggest U.S. bakery, could be competing with a new plant in Salinas, Mexico, over $130 million for new equipment or if it will lose a few of its older production lines.
- Mondelez is meeting with three labor unions to discuss the decision.
- A spokesperson for Mondelez assures this is not about closing the plant, only potentially expanding it, though the number of jobs or production lines that could be affected by this decision is unknown.
Dive Insight:
Mondelez is looking to increase efficiency to improve its bottom line, and part of that is through upgrading older production lines, some of which have been in use for decades.
While initial installation costs might be significant, these newer lines "require 30 percent less capital and reduce operating costs by $10 million per line," as Chicago Tribune quoted Mondelez. The lines also "can be installed in one-third the time and provide twice the capacity in half of the space as older designs," the news outlet reported.