Workers: Nabisco layoffs more than campaign trail sound bites
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Michael Smith is all too familiar with this scenario.
Smith, 58, of Tinley Park, is a utility worker laid off March 23 from the Southwest Side Nabisco Chicago Bakery that’s become a symbol in the presidential campaign of the impact of offshore outsourcing, with Democrats Bernie Sanders and Hillary Clinton and Republican Donald Trump all complaining about the loss of Nabisco jobs shifted to Mexico.
The married father of four — whose youngest child has a year of college left — was laid off in 2008 from a job he’d held for 16 years.
He landed the Nabisco job in 2010 after two years of unemployment during which he’d lost his home, and his family was on public assistance for the first time.
“And here we are again,” Smith says now.
Six hundred workers are being cut at the Marquette Park plant by Deerfield-based Mondelez International, owner of the company that makes the iconic Oreo cookie.
Smith was in the first wave of 277 layoffs.
Another 91 workers at the more than 60-year-old plant received 60-day notices last week. The plant had employed 1,200.
Last year, the company posted over $30 billion in revenue. It will move its cookie and cracker production line to a plant in Salinas, Mexico, where it has invested $130 million.
Mondelez’s actions have triggered a debate on American jobs and tax breaks. Both Republican and Democratic presidential candidates have lambasted the shift in production and the layoffs.
“The day the notices came was just devastating. People crying. It was unbearable,” says Jesus Herrera, 26, of Merrillville, Ind..
He’s a married father of children 1, 3 and 6 years old who also was laid off March 23.
“They told us in January, and after that a lot of people were just trying to get as much overtime as possible,” says Herrera, who worked as a machine operator at the plant at 7300 S. Kedzie for 2 1/2 years.
Before that, he worked at a banquet hall for seven years, having worked his way up from a part-time dishwasher at 16 to a full-time cook.
“I jumped at it when this job came up,” he says. “Great pay and benefits, insurance for my family, you know? That was the best part. The difficulty isn’t so much finding another job. For me, it’s finding another job with good benefits.”
Mondelez says it found lower costs outside the United States.
“About 80 percent of our business comes outside the U.S., where tax rates are generally lower,” says Mondelez spokesman Michael Mitchell.
Foreign production has helped the company maintain a tax rate consistently lower than the U.S. rate of 35 percent. It’s reported that its effective tax rate last year was 7.5 percent, 13.8 percent in 2014 and 2.5 percent in 2013.
“Six hundred people are losing their jobs, and all we have to look forward to is unemployment — no separation package,” says Smith. “What happened to good corporate citizenship? The desire for cheap labor to produce products has left we American workers at a disadvantage. What about our American dream?”
He and Herrera are members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which represents 4,000 Mondelez workers nationally.
The Southwest Side plant is the snack giant’s largest U.S. bakery.
The national contract between Mondelez and about 2,000 bakery union workers expired on Feb. 29 with many issues outstanding, including severance. The two sides are set to resume contract talks Thursday in Baltimore.
The International Association of Machinists and Aerospace Workers and International Union of Operating Engineers represent other plant employees. Those unions reached an agreement with the company, and their workers got severance pay, according to Mondelez spokeswoman Laurie Guzzinati.
Employees in the second wave of layoffs will work through May 27.
Herrera’s union says it was told by Mondelez last May that the company would consider investing $130 million in the Chicago plant if the union agreed to a 60 percent cut in wages and benefits — worth a total of $46 million a year.
“The people you work with, over time, you become family, you know? You had different races working together as one,” says Herrera. “Last year, when they told us they would invest in here or Salinas, that got all employees ramped up, giving it our all, thinking we had a chance. The company knew all along what they were going to do. No matter how hard we worked, that money wasn’t coming to Chicago.”
“They made an offer … so ridiculous they knew it could never be accepted,” says union president David Durkee. “American workers cannot compete with workers in Mexico making $60 per week, with little or no benefits.”
He says Mondelez has “no loyalty to any country, community or worker that has contributed to their billions in profits.”
Oreos and other Nabisco brands — including Ritz, Nutter Butter, Nilla Wafers, Honey Maid, Premium and Wheat Thins — will be produced in Mexico to be sold across North America. They’ll also still be made at plants in New Jersey, Oregon and Virginia.
While Mondelez and the union battle and politicians bemoan their fate in sound bites, the hundreds of laid-off workers brace for tough times.
Herrera’s wife, Anahis, had been attending a community college program in the morning. Her mother would watch the kids until her husband got home. Now, she’s working at McDonald’s to help pay their rent.
Smith, whose wife Janet is retired, had rented a home the past few years until buying a house last year.
“I worry about retaining ownership of my home, helping my daughter complete her last year of college,” Smith says.
“I’ll be 59 in August. The job pool is smaller,” he says. “What chance does the average worker have? What Mondelez is doing is so un-American.”