Sacramento, CA — When President Barack Obama said the private sector is doing fine, he must not have been thinking about the Campbell Soup Company. In a stated need to “improve supply chain productivity,” the company has announced that it is shutting down its oldest factory in the US, and about 700 workers — many who are long-term employees — will be out of work.
The Sacramento soup plant has been in operation since 1947, but apparently it was the least efficient and most expensive to run of Campbell’s facilities. Campbell plants in in North Carolina, Texas, and Ohio will take over the production of soup, sauces, and beverages when the Sacramento branch ceases all operations by next summer. In a press release, the Campbell Soup Company said that the Sacramento plant “has the highest production costs on a per-case basis” in its manufacturing network and therefore was no longer cost effective. It is also closing a small spice factory in South Plainfield, New Jersey.
Campbell North America President Mark Alexander said, in part:
“We expect the steps we’re announcing today to improve our competitiveness and performance by increasing our asset utilization, lowering our total delivered costs and enhancing the flexibility of our manufacturing network. These actions also will eliminate the capital investments needed to maintain the Sacramento plant.”
He also noted that the company is committed to helping the workers in Sacramento and South Plainfied whose jobs have been eliminated “work through this transition.”
Apparently consumers aren’t buying as much soup as they used to, and as such, national sales figures played into this decision.
Many businesses have fled California because of high taxes and excessive regulations although neither may have been a factor in the Campbell Soup decision to close the Sacramento plant.
Watch the CBS affiliate’s report on the Campbell Soup factory closing after 65 years and the elimination of 700 jobs:
Do you still buy canned soup on a regular basis?
[Image credit: Ramon FVelasquez]