‘Undersupply of Lunchables’ leads Kraft Heinz to keep Fullerton plant open, saving hundreds of jobs

Kraft Heinz Co. said Tuesday that it would keep its Fullerton plant open, reversing plans to shutter the facility and saving about 360 jobs.

The company said in a statement that it decided to keep the factory in business because of “high consumer demand for its Lunchables products,” prepackaged meals that are made in Fullerton.

“Given what’s happening in California, where we have a lot of legislative costs imposed on employers, and we have employers leaving California, this is pretty remarkable,” said Patrick Kelly, treasurer and principal officer of Teamsters Local 952, the union representing some of the factory’s workers.

Nearly a year ago, the company announced that it would end operations in Fullerton and six other factories in the United States and Canada, citing a desire to “eliminate excess capacity.”

The plant was set to close at the end of this year or the beginning of 2017.

But in August, company officials contacted the Teamsters and said that they were now facing “an undersupply of Lunchables” and were considering keeping the factory online, said Kelly. Company executives agreed to begin fleshing out a new contract.

After three days and late nights of talks about two weeks ago, the two sides came to an agreement, and on Sunday the union ratified the contract. The deal included wage increases, but also changes to healthcare coverage that lowered costs for Kraft Heinz, according to the union.

The company would have had to pay its union employees severance for “multiple weeks” if the plant had shut down, Kelly said.

[email protected]

Follow me @NatalieKitro on Twitter.

ALSO

Median incomes are up and poverty rate down, surprisingly strong census figures show

SpaceX says rocket launches could resume as soon as November

Mattel among companies fined for tracking data about children