- ConAgra Foods, one of the largest employers in New York's Chautauqua County, announced on Wednesday plans to close two plants in the area by February 2015 in order to operate more efficiently.
- The plants make private label products, like salad dressings, peanut butter, and jellies, for which demand has declined.
- The equipment from the plants are to be sent to other ConAgra plants, including new facilities in Kentucky.
ConAgra did hint at its problems with private label production volumes last month. Still, the news of the closure comes as a nasty shock to the people in the area. It will leave over 400 people out of a job, causing a bigger hit to the area than Kellogg's plant closure in Charlotte, NC. The ensuing unemployment combined with the loss of tax revenue from the plant will take a toll on the local economy. Chautauqua County Executive Vince Horrigan says ConAgra’s decision will also impact local grape growers, who supplied the plant. Senator Charles Schumer says he’s furious about the closings and questions the timing: “They say there is less demand for grape jelly and grape juice and grape products, but they would have known that a year ago. So I want to know if they bought the plant just to close it, to reduce competition.”
While New York politicians are upset about the move, some consider it inevitable when New York is ranked so low as a business-friendly state. Certainly, the costs of operation in New York are likely higher than the costs of operating in a state like Kentucky. But Schumer still has a point: Why did the company buy the plant when they should have been able to predict this?