Food manufacturer Kellogg's said Monday it is closing its Columbus snack plant on Victory Drive by the end of next year as part of a massive corporate restructuring. The move eliminates 325 jobs.
“As with any project that impacts people, these are difficult decisions,” Kris Charles, Kellogg’s vice president of global communications and philanthropy, said via email. “We are very mindful of the impact these changes will have — particularly to our employees, and we will help those who are impacted through their transitions.”
Charles said the company is “working toward closure” of the Columbus plant by the end of 2015. “We will meet all requirements as part of that process including obligations, if any, to negotiate with the union,” she said.
The Greater Columbus Georgia Chamber of Commerce received a phone call from the local plant Monday morning disclosing plans to shutter the facility that has been operating for decades, said Bill Murphy, the chamber’s executive vice president of economic development.
“We’re going to be kind of regrouping and figuring out if there’s anything we can do locally to keep the operations. My gut tells me those decisions have already been made,” said Murphy, pointing out the closure announcement came out of the blue, although the chamber had a hunch something was in the works.
“We had been trying to schedule a meeting with their local representatives for about the last three months, and they just really have come up with a variety of reasons that they were unable to meet,” he said. “We have this Business First program where we call on existing companies and talk about their operations. That kind of raised some red flags at the time. But, again, they’ve not provided us any kind of direction until we got the phone call this morning.”
The 3700 Victory Drive plant has been in operation since 1953, when it was called Sunshine Bicuits. A series of company sales and mergers landed the property in the hands of Keebler Co. in 1996, with Kellogg purchasing it in 2001.
At the time of the purchase, Keebler had a second facility on Brickyard Road in Phenix City, but it was eventually closed. A $22 million expansion of the Victory Drive plant in 2007 was aimed at modernizing the facility in order to retain the 348 jobs there at the time.
A product that has been baked for years in Columbus is the orange-colored snack cracker Cheez-It. It also manufactures restaurant-pack graham crackers and saltine crackers.
Battle Creek, Mich.-based Kellogg Co., founded in 1906, racked up sales of $14.8 billion in 2013. In the first quarter of this year, it reported a profit of $406 million — up from $311 million the year before — on sales of $3.7 billion. It will release second-quarter earnings data Wednesday.
Last November, the company announced a major four-year restructuring dubbed “Project K,” one in which it plans to close some facilities, consolidate production lines and open new plants elsewhere in an effort to cut costs and become more profitable. In February, the firm said it will idle a cookie plant in Charlotte, N.C., by the end of this year, eliminating 195 jobs. A facility in Cincinnati, Ohio, also was cutting two production lines.
The cereal and snack company has felt pressure as more consumers have either cut back on cereal and snacks amid the slow economy or opted for healthier options.
Murphy said the chamber will now work to find other job opportunities for those Kellogg's workers who want to remain in Columbus and not relocate to another plant as part of the consolidation. Kellogg's has more than three dozen facilities across the Southeast alone.
“We’ve certainly got a number of other snack-producing companies that fortunately seem to be doing very well, including Hostess and Snyder’s-Lance,” he said. “But we also have some other job expansions that are happening where there might be opportunities to get some of these employees who choose to stay here in Columbus retrained for jobs at companies that are currently undergoing some pretty significant expansions.”
Kellogg's shares closed up 7 cents at $65.44 each in trading Monday on the New York Stock Exchange. The stock’s 52-week trading range is $55.69 to $69.50 per share.
Aside from Keebler and Cheez-It, Kellogg’s other brands include:
Frosted Mini Wheats
Chips Deluxe Cookies