Kraft Heinz Keeps Fullerton Factory Open Due to Lunchables Demand

(BRK.A), (BRK.B)

Kraft Heinz has decided to keep open a factory in Fullerton, California, which it had scheduled to close at the end of 2016.

In November 2015, the company announced its plans to reduce excess capacity by closing seven manufacturing facilities, including the Fullerton plant which employs 430 people.

The plant makes Lunchables, a prepackaged lunch for kids that is sold under the Oscar Mayer brand. According to the L.A. Times, the company reports it is facing “an undersupply of Lunchables.”

The move to keep the plan open comes after Teamsters Local 952 ratified a new 3-year Agreement that raises wages but cuts some Kraft Heinz’s health care costs.

According to the Teamsters, the Agreement “included minor concessions and significant improvements to the H&W with no employee contribution for the first year and minor employee contribution rate for each of the following years. The Agreement also includes yearly wage increases of thirty-five (0.35) cents on Jan. 1st of each year of the contract. Additionally, workers secured a pay-out of the Productivity Bonus of three thousand ($3,000) dollars which will be paid out thirty days after ratification as well as a severance package security going forward.”

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.