Kraft to cut 30 NU jobs

By FRITZ BUSCH

Journal Staff Writer

NEW ULM -- For the first time in 20 years, New Ulm's Kraft Foods plant is eliminating jobs.

Thursday evening and Friday morning, employees learned that the country's largest food and beverage company will trim its New Ulm work force by 30 positions, effective March 10, 2002.

The reduction is due to volume forecasts, departmental changes and the upcoming installation of new, automated equipment in April, according to Cathy Pernu, Kraft Foods Senior Manager of Corporate Affairs in Northfield, Ill.

The 30 least-senior employees at Kraft's New Ulm plant will be offered part-time work at the plant. Those who don't take it will receive severance pay, based on length of service.

Pernu explained the situation further.

"Instead of initiating a temporary layoff as we've done in the past, we are eliminating these positions. Over the past several years, there were occasional, temporary layoffs, but workers were called back when work was available," Pernu said. "We are now fully staffed and our work force does not experience significant turnover that would allow us to absorb this number of employees in other positions. In other words, attrition would not take care of this layoff."

Pernu was quick to point out that the job cut is not a reflection on work efforts at the New Ulm plant.

"We have a great team of employees at that plant," Pernu said. "With the lead time, we hope employees will have time to consider other work options."

The New Ulm Kraft plant employs 600 full-time and 300 part-time employees. They process cheese including Kraft Velveeta, Kraft Singles, Handi-Snacks and Oscar Meyer Lunchables.

Pernu said the new, automated equipment will be used in departments that process Handi-Snacks and Lunchables.

Earlier this month, Kraft Foods announced it would close its 35-year-old Life Savers plant in Holland, Mich., by the fall of 2003.

That closure would cost more than 600 jobs. Production would be transferred to a Kraft plant near Montreal, company officials said.

Pernu said the Holland plant was underutilized after the sell-off of breath mints and gum by Nabisco in 2000.

Kraft bought Life Savers from Nabisco Inc. in December 2000, then quickly sold two production lines at the plant -- Breath Savers and Bubble Yum bubble gum -- to Hershey Foods Corp. Those moves eliminated 150 jobs.

The Holland plant was hurt by the high cost of sugar in the United States, which, unlike Canada, imposes a duty on sugar and restricts its import. Kraft will save about 10 cents on each pound of sugar by moving Life Savers to Canada. Kraft buys sugar by the tens of millions of pounds.

Last month, Kraft closed two Chinese biscuit plants and cut about 1,000 employees in an effort to trim costs. The company also downsized a plant in Tainan, Taiwan, and transferred production to its plant near Jakarta, Indonesia.

Kraft's brands are sold in more than 140 countries. Kraft Foods North America includes the United States, Canada and Mexico.

Kraft Foods International operates in 63 countries. These units participate in five core consumer sectors: snacks, beverages, cheese, grocery and convenience meals.

The company also participates in three international ventures that are strong players in their local markets: United Biscuits for biscuits in Europe; Ajinomoto General Foods for coffee in Japan; and Dong Suh Foods for coffee and cereal in Korea.

Kraft was spun-off from Philip Morris Companies through an initial offering of 28,000,000 shares in June 2001. Philip Morris retains about 84 percent ownership of the company.