Twenty million dollars is a lot of cheddar, as the old saying goes, but it’s also a lot of cottage cheese and sour cream too.
Kraft Heinz has been busy closing plants and laying off employees, as a part of its rigorous cost cutting, but in upstate New York it is promising to keep plants open and is about to add hundreds of employees.
Under an agreement spearheaded by U.S. Senator Charles Schumer and Governor Andrew Cuomo, $20 million in state funds have been committed to keep open Kraft Heinz’s plants in Walton, Avon and Lowville.
Kraft-Heinz was initially planning to close the Avon facility and layoff all 405 employees, and the agreement also reversed the planned closure of the Walton facility.
Saving jobs, Adding Jobs
An agreement was reached between New York State and Kraft-Heinz to save three of their facilities in Upstate New York, including the Walton facility in Delaware County that was initially slated for closure, as well as add additional jobs in Lowville.
Senator Schumer said this agreement will preserve a significant employment base throughout Upstate New York for years to come.
In addition, the agreement paved the way for a matching capital investment from both Kraft-Heinz and New York State that will allow for future investment in the company’s technology, facilities and operations.
The Kraft-Heinz Walton facility, which produces cottage cheese and sour cream, employs a total of 141 people in Delaware County. Kraft-Heinz was planning to close the Walton facility and layoff all 141 employees. The agreement reached between Kraft-Heinz, Senator Schumer and Governor Cuomo will save the Walton plant and all 141 jobs for at least the next 5 years, ensuring that there are no layoffs or reductions at the facility.
Additionally, in an effort to help save the 393 jobs at the Campbell facility in Steuben County, Schumer and Cuomo secured a commitment from Kraft-Heinz to delay the closure and continue to operate the facility for at least the next 12 to 24 months, and to work with state, federal and local officials to help find a strategic buyer for the facility that would keep the plant open and retain the 393 jobs.
The company has also agreed to offer any employees leaving the Campbell facility first choice for the new positions at the Avon and Lowville plants.
Lastly, the Lowville Kraft-Heinz facility in Lewis County will retain all of its existing 340 employees and will add scores of additional jobs at the Lowell facility over the next five years.
A $50 million Investment
In return for the state funds, Kraft Heinz will invest $20 million over that same amount of time as a part of this deal. If after those five years, Kraft-Heinz has not decreased their aggregate employment in New York State, and has invested at least $25 million in its Upstate operations, New York State will then invest an additional $5 million, bringing the combined matching total investment to at least $50 million in Upstate New York.
© 2015 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.