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Kraft announces restructuring

October 25, 2012
By Kevin Sweeney - Journal Editor , The Journal

NEW ULM - Kraft Food Groups, Inc., announced a restructuring involving the New Ulm Kraft Plant on Wednesday. The restructuring, to be carried out in 2013, could result in the loss of as many as 80 full-time equivalent hourly positions and 10 salaried positions in New Ulm, but will include a $25 million investment in the plant for new product, according to a company spokesperson.

Joyce Hodel said Kraft is realigning the product lines produce in three plants to consolidate product lines, reduce duplication and increase efficiency in its production. The company announced the restructuring to its employees on Wednesday.

The changes mean the Velveeta production in New Ulm will be moving to the Kraft plant in Champaign, Ill. New Ulm will be picking up bulk food service cheese production from a plant in Springfield, Mo., and the Springfield plant will be increasing its pasta press and drier facilities, and expanding its dinner cup line.

New Ulm will also be losing the bar production line that produces Kraft MilkBite bars. The small volume on that product line made it inefficient for the company to produce it internally, said Hodel.

Hodel said Kraft will be making a "significant investment" of $25 million in new packaging equipment and related infrastructure in the New Ulm plant.

The changes will be taking place throughout next year as equipment is moved out and new equipment brought in, said Hodel.

Of the three plants, Hodel said New Ulm was the only one that would see a reduction in positions. Hodel said it wasn't clear at this time how many people might be affected by the reduction of the equivalent of 80 full-time hourly positions. The plant does employ many part-time as well as full time employees. Hodel did say the reduction in salaried positions could probably be accomplished through attrition.

Brian Tohal, Economic Development coordinator for the New Ulm Economic Development Corp., said the information he received from Kraft indicated most of the reductions could be accomplished through early retirements over the coming year.

"With the information I have now, it sounds a heck of a lot better than a 90-person layoff," Tohal said. "The plant is being restructured and positioned for future growth, and that's an important thing for New Ulm."

 
 

 

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