Union approves Pillsbury plant closure deal

Food giant General Mills will indeed close its New Albany plant in mid-2016, after union workers voted for a compensation package that will reward them for staying at least until layoffs begin early next year.

Talks last week resulted in the union negotiation team signing an agreement that includes a $1-an-hour raise, a $4,000 retention bonus and a $1,000 signing bonus under a new contract, said Roger Miller, president of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union Local 33G.

"It's a good package," Miller said. "I think my negotiating committee did a good job."

Union members who work at Pillsbury largely agreed, voting 217-10 in favor of the plan. Some members didn't show up at the Clarksville union hall to learn about the details and vote Thursday.

"We had 10 people who were upset and wanted more," Miller said, adding "it isn't possible to have everything."

The new agreement also includes language that could allow some workers to more easily transfer to another General Mills location as jobs come open, though Miller said he's only heard from a few who are interested.

"It allows us to apply for jobs and forgo the usual testing and screenings," he said. "They'll give us a list of jobs as we get closer to release dates."

Wendy Dant Chesser, president of the area business chamber One Southern Indiana, said company officials told her by phone Thursday the decision is not about the community, the employees or the facility itself.

"It's the company's reaction to a changing business environment," Dant Chesser said. "Overcapacity caused this decision by the company."

Company officials continued to remain relatively tight-lipped when reached for comment Thursday, as union officials discussed with members details of the plant closure agreement ahead of the vote.

General Mills spokeswoman Kelsey Roemhildt said the company plans to talk again with union officials this week as part of the process to close the plant, which has operated in the city for 56 years and remains its fifth-largest employer.

"We're completing steps in the process," she said.

Miller said the roughly 70 contract workers at neighboring Sonoco will be notified of the decision once it becomes final, per the terms of its separate contract.

Layoffs will not happen all at once, Miller said, noting the reduction in Pillsbury workers is tentatively scheduled to happen in waves starting early next year and concluding next summer.

Miller said the plan is to give workers the chance to leave voluntarily, then others will be based on seniority. As of late Thursday afternoon, he said he had heard mostly positive feedback about the deal from workers, who already were earning about $26 to $27 an hour, with increases for second and third shifts.

Workers can make up to $100,000 annually with overtime, in addition to benefits that are rare at other workplaces, such as free insurance for life.

For Pillsbury worker Steve Early, a 21-year veteran, the vote was the culmination of a sad month. He told WHAS-TV that he's a couple of years short of being able to retire and now worries about competing with much younger workers.

"My brother's been there as long as I have, my dad retired from there, my wife works there, her nephew works there, so it's a big family thing," Early said. "These people have been around each other all this time, and it's coming to an end."

About half of the roughly 440 Pillsbury workers will be eligible for retirement benefits. The pensions, which are paid monthly, include a fixed dollar amount multiplied by each worker's years of service, Miller said.

David Duggins, the city economic and redevelopment director, said during a late January city council meeting that the company's $30 million payroll has a "ripple effect" that likely quadruples that amount on the local economy.

"It'll be a blow to the community," Robert Mann, a retired New Albany firefighter, said while stopping at the Centra Credit Union on Pillsbury Lane adjacent to the plant Thursday.

Like many area residents, Mann had a friend who retired after more than three decades working at Sonoco (formerly RC Can Co., then Boise Cascade Corp.), which General Mills contracts to make paper and metal cans for its dough products.

The Pillsbury plant moved to New Albany from Louisville in 1959, the same year RC Can began contracting with it, according to those who worked there over the years.

Miller said the company didn't accept the city's proposal to give the company up to $7 million in economic incentives if it were to keep the plant open for five years.

"They said while it's a great package, it's not near enough to keep the site there," Miller said, adding the company will save more than $30 million a year by closing it.

Miller said he wasn't sure whether the company had responded to city leaders, while Mayor Jeff Gahan said late Thursday afternoon he couldn't comment on the deal because he was still awaiting the final word.

"I thank him for all the work and effort he put into putting the incentive package together," Miller said.

Miller, who began working there 33 years ago, said he believes employment likely peaked at around 800 workers at the plant in the 1960s. Much of the process, such as putting dough in cans by hand, was later done by machines.

Miller said this allowed it to increase production, which peaked between the late 1990s and early 2000s.

Over the last few years, the company shifted manufacturing of some product lines to its more modern plant in Murfreesboro, Tenn.

Dant Chesser noted the New Albany closure also comes amid other recent cost-saving measures to improve efficiency and growth. In November 2014, it also announced the closure of its breakfast cereal production plant in Lodi, Calif., a move affecting 430 employees.

One Southern Indiana is confident that General Mills "will work with us for a smooth transition for the employees, their families and the community as a whole," Dant Chesser said, including helping re-purpose the facility for a new user.

"Typically, companies retain some level of employment, but they anticipate losing employees through natural attrition. However, since last month's announcement, several manufacturers from throughout the metro area have inquired about hiring any displaced employees," Dant Chesser said.

One Southern Indiana plans to help provide displacement services for laid-off employees or retraining through partner organizations like Work One and Ivy Tech. It also offered to contact local vendors and suppliers that will likely suffer negative effects of this decision.

"Additionally, we will help market the USDA-approved facility to other potential users in food-processing industries," Dant Chesser said.

Reporter Charlie White can be reached at (812) 949-4026 or on Twitter @c_write.