As speculation swirls over the fate of H.J. Heinz Co.’s factory in Leamington, Ont., the Pittsburgh-based company is expected to say it is in talks that could keep the 104-year-old plant operating.
An announcement could come on Thursday, sources say.
It is not clear if the plant that makes ketchup, sauces and baby food will be sold or leased to a group of investors. Nor is it clear how many workers would keep their jobs.
In November, Heinz said it would close the factory by mid-2014, eliminating more than 700 full-time jobs and leaving dozens of growers looking for new buyers for their crops. Since then, government officials and business leaders have been trying to find a way to keep the factory open. Heinz said it was unprofitable, and production was being moved elsewhere. A Heinz spokesman would not comment.
Leamington mayor John Paterson said in an interview talks with several interested parties have narrowed to one group, and those investors told him to be in town on Wednesday (today).
“It’s Heinz’s decision to do what they’re going to do,” said Mr. Paterson, calling the possibility of keeping the plant running “good news” but cautioning it was too soon to say the deal was a sure thing.
Rebecca Zlotnik, who has worked for Heinz for nearly a dozen years, said employees are being kept in the dark. They were told their jobs would be gone by June or July, but no layoff notices have been issued.
Since the plant closing was announced in November, a few of the workers have quit and taken new jobs, but most have stayed. Leamington is in Ontario’s struggling manufacturing heartland, a region with a jobless rate higher than 9 per cent. Heinz is offering $1,500 bonuses to employees who hit production targets and stay till the planned closure.
“We’d all love to stay there. A lot of people are down,” she said in an interview. “We can’t move on with our lives but they won’t tell us what’s going on.”
Two suppliers who did not want to be named said keeping the plant operating has been a possibility for some time, but they have not reached contracts with the factory’s new prospective operator.
Heinz was a major buyer of fruit and vegetables in Southwestern Ontario, purchasing almost half of the province’s crop each year. Of the 119 Ontario farmers growing tomatoes, more than 40 had contracts to supply Heinz.
Heinz was bought last year by Warren Buffett’s Berkshire Hathaway and Brazil’s 3G Capital for $23-billion (U.S.). Since then, the company has announced hundreds of layoffs and three plant shutdowns in an attempt to streamline operations. Mr. Buffett has said the Leamington plant did not make money.
Eric Hoskins, Ontario Minister of Economic Development, Trade and Employment, told reporters on Wednesday he and other government officials have been meeting with interested parties, and he is hopeful of finding a way to keep the plant running.
“Certainly in agriculture and agri-food, it’s such an important aspect of our economy, particularly in that part of Ontario. So we’re working hard to make sure that we can find a solution that, I think, will hopefully be a positive one for the community,” said Mr. Hoskins, who said he had no plans to be in Leamington on Thursday “at this point.”