Oscar Mayer in Madison to close

Madison Water Utility says Oscar Mayer closure means nearly $1M loss

Oscar Mayer, which has been part of Madison’s northeast side for nearly 100 years, is closing its Madison headquarters and manufacturing plant, the company said Wednesday.

Kraft Heinz Food Co. confirmed in a statement that it will close the Madison facility along with six of its other manufacturing facilities in North America in a staggered process over the next two years as it shifts production to other plants.

Kraft Heinz also plans to expand its Davenport, Iowa, facility into a “state-of-the-art location” in the Davenport area.

The Madison Oscar Mayer facility employs 1,000 people, according to Madison Mayor Paul Soglin. Kraft Heinz Company spokesman Michael Mullen said 700 of those workers are in the factory.

Officials said Madison’s economy can absorb the loss.

“We do have the capacity to grow more jobs in other sectors. We do have manufacturers in Madison and Dane County who are right now looking for skilled workers, so I don’t think this is going to be as bad as the GM closing in Rock County,” Soglin said.

Kraft Heinz said it plans to move Madison operations to Chicago in 2016, bringing 250 jobs to the Chicago area. Mullen said 300 employees in the Oscar Mayer and US Meats Business Unit in Madison will have the opportunity to move with the business to Chicago.

Some of the jobs may move to the new Iowa plant, and reports out of Iowa say that there were a number of financial incentives offered by the city and the state.

A spokesperson for the Wisconsin Economic Development Corporation said they were informed of the plant closure Wednesday and were not asked to provide a retention package.

Oscar Mayer’s headquarters was moved from Chicago to Madison in 1957, according to the company website. The Mayer brothers originally bought a Madison meatpacking plant in 1919.

In August, the company announced it would be cutting 2,500 jobs throughout the company, which included 165 positions in Madison.

In response to the layoffs in August, Soglin said he looked “forward to a continued healthy relationship with the company…as we call Oscar Mayer and stress that this setback will not detour our efforts to create a robust food economy in Madison.”

Soglin issued a statement at a news conference Wednesday, saying his “thoughts and concerns are with the 1,000 workers who will be losing their jobs.”

“These men and women have dedicated their lives to this company, and they and their families are of the utmost concern to me. They are the heart and soul of the north side,” Soglin said.

Soglin said the city will work with the State Department of Workforce Development and the Workforce Development Board of South-Central Wisconsin to assist the workers in retraining and placement in their next employment opportunity.

“I am committed to working with these loyal employees as well as the local businesses that will feel the loss of this institution in our city,” Soglin said. “The company may be closing, but our relationship is not ending.”

Pat Schramm, executive director of the Workforce Development Board, said there will be federal funds to help workers, and that they will work with Madison College to help with worker training.

“To say this unexpected news is both sad and unfortunate is an understatement. Oscar Mayer is deeply rooted in Madison’s history, and we expected it would be a part of greater Madison’s next chapter,” Greater Madison Chamber of Commerce President Zach Brandon said in a statement. “Today, our attention turns to the employees, families and suppliers affected by this decision, and the need for coordinated, intentional, public and private economic development efforts to ensure greater Madison continues to be a place of great opportunity.”

“I know I have many constituents who will be impacted by this closure. I will be working with city officials, other legislators and stakeholders to assist those who will be impacted,” state Rep. Lisa Subeck, D-Madison, said in a statement.

“Since Heinz took over Kraft and Oscar Mayer, their commitment to the corporate bottom line over the interests of individual workers and the communities they live in has, unfortunately, been repeated across the country,” U.S. Rep. Mark Pocan, D-Wis., said in a statement. “Given the company’s indication that they will instead expand operations elsewhere in North America, my office is prepared to assist should workers qualify for trade adjustment assistance.”

WORKER REACTION

Some Oscar Mayer workers told News 3 Wednesday they sensed something like this might be on the horizon.

Employees were first told about the closure during a meeting Wednesday afternoon.

“Kind of saw it coming, been seeing it coming for a while, been losing product out of this plant for several years. I’ve been watching it downsize. We’ve got so many empty spots up there it’s not even funny, but we were kind of hoping that they’d start bringing stuff back and they made the announcement today,” said James Crotty, who has worked at Oscar Mayer for 23 years.

“There were a lot of rumors and stuff going around, but we really just didn’t know if it was going to happen to us since it’s the Madison plant, but a lot of people are upset about it,” said Janet Milz, who has worked at Oscar Mayer for 20 years.

NEIGHBORHOOD REACTION

The plant closure will have a widespread impact on the northeast side community, but not too many neighbors are surprised by the closure.

The owner of Wiggie’s Bar, which is literally in the shadow of the plant a block or two away, said Oscar Mayer has been cutting workers for the past several years.

Wiggie’s owner Dave Wiganowsky, who spent 14 years there before opening his bar, said the plant pretty much helped build the east side by bringing more business to the neighborhood.

“You think all of those workers, even if there’s just 700 left, think of all the money that they spend in the neighborhoods with the grocery stores or the bars or the restaurants. That’s going to be gone,” Wiganowsky said.

While Oscar Mayer was once the main employer of nearly every household on the east side, Wiganowsky said that hasn’t been the case recently.

Soglin said only about 50 percent of the workforce lives in Madison.

The 72-acre Kraft Oscar Mayer facility is at 910 Mayer Ave. in Madison.