Dive Brief:
- After much discussion between General Mills, the city of New Albany, OH, and the Bakery, Confectionery, Tobacco Workers, and Grain Millers International Union Local 33G, the city's Pillsbury plant will now officially close in mid-2016.
- While the deal will lay off more than 400 workers, most (217-10) voted in favor of the compensation package involved, which offers $1-per-hour pay bump, $1,000 immediate bonus, and extra bonuses for meeting certain quotas and staying on with the plant until it closes.
- The city offered General Mills a $7 million incentive package to convince the company to keep the plant open, but it wasn't enough to turn the heads of company officials, who will reportedly save $31 million each year in shuttering the plant.
Dive Insight:
This isn't the first of General Mills' recent history of layoffs, and it may not be the last. In September, the next day following a report of disappointing earnings, the company announced the closing of two plants: one Yoplait facility and another that manufactured different General Mills cereal brands. Soon after, the company announced it would cut another 700 to 800 unspecified jobs as well. And now, General Mills faces a lawsuit from 14 workers who claim age discrimination following a series of 2012 layoffs as part of the company's "Project Refuel."
The cause? Bleeding cereal sales and the rise of gluten-free foods are likely contributors.