The news was delivered quickly, and for the 550 Kellogg’s London employees it was painful.
A little less than two weeks before Christmas, workers have been told the 90-year-old factory will close by the end of 2014.
The announcement was made during a mandatory Tuesday meeting of union and non-union staff. Kellogg’s brass told employees about the meeting — held at a Wellington Road hotel — on Monday afternoon.
“Everyone figured it was coming,” said Bruce Monteith, who has worked at the plant for 27 years. “When they call a meeting like this, you know it is not for anything good: They are not going to be handing out Christmas bonuses or Christmas turkeys.”
Within minutes of the meeting’s start, workers began filing out saying: “We are closed. Kellogg’s is done in London.”
A little more than a month ago Kellogg’s announced 110 unionized workers would be laid off starting in January and 11 management jobs were being cut immediately.
At the time, the company said the plant — which makes cereals including Corn Flakes, Frosted Flakes and Raisin Bran — would be closed for 10 weeks at some point in 2014, citing “excess cereal manufacturing capacity in our North American network” as the cause.
In 2005, more than 105 million kilograms of cereal was produced in London, that number has steadily declined to 67 million kilograms this year.
Closing the London plant is part of an overall four-year “efficiency and effectiveness” program, the company said in a Tuesday statement.
Under what it’s dubbed Project K, Kellogg’s will streamline worldwide operations by 2018 and calls for a 7 per cent reduction in the company’s global workforce.
The company also announced plans to close a snack-making plant in Australia by late 2014 while expanding a Thailand plant that makes cereals and snacks. The Thailand expansion will be fully operational by early 2015.
“Through Project K, Kellogg is strengthening its existing business in core markets, increasing growth in developing and emerging markets, and driving increased value-added innovation,” the statement said.
Here’s the statement released Tuesday morning in full:
Kellogg Company Announces Changes to Global Supply Chain Network
Dec 10, 2013
Kellogg Company today announced several changes to optimize its global manufacturing network as part of the company’s recently announced Project K four-year efficiency and effectiveness program. Project K will unlock cost savings that Kellogg will invest in its strategy and grow its business. Through Project K, Kellogg is strengthening its existing business in core markets, increasing growth in developing and emerging markets, and driving increased value-added innovation.
Supply Chain infrastructure changes announced today include:
— Closure of the Snacks plant in Charmhaven, Australia
— Expansion of the Rayong, Thailand cereal and snacks plant, and
— Closure of the ready-to-eat cereal plant in London, Ontario, Canada.
“As with any project of this scope and one that impacts people, these are difficult decisions,” said John Bryant, President and CEO, Kellogg Company. “We are very mindful of the impact these changes will have – particularly to our employees. As our employees and others would expect from Kellogg, we will help those who are impacted through their transitions.”
The London plant is expected to close by the end of 2014 and the Charmhaven plant is expected to close by late 2014. The Rayong expansion will be fully operational by early 2015.
“We have a compelling business need to better align our assets with marketplace trends and customer requirements,” said Bryant. “To that end, we are taking action to ensure our manufacturing network is operating the right number of plants and production lines – in the right locations – to better meet current and future production needs and the evolving needs of our customers.”