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Mondelez seeks job cuts, wants to vacate one of two South Side bakery buildings

One of two South Side bakery buildings operated by Mondelez Inc. is being vacated, with several hundred jobs in the balance.

Up to half of the workers at the plant, which makes such well-known products as Chips Ahoy and Oreos, could be laid off, even if the plant gets four new manufacturing lines.

Mondelez spokeswoman Laurie Guzzinati said Friday that 300 positions out of the plant’s 1,200 would be cut if Chicago wins the new manufacturing lines, and that 600 positions would be cut if the new manufacturing lines are instead installed in a new plant in Salinas, Mexico.

The company could offer a separation package to “mitigate the impact” for affected employees, Guzzinati said.

That could mean layoffs of 200 to 440 of the roughly 1,000 workers represented by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union Local 300, union officials say.

Those workers operate the bakery’s 16 lines, which also produce such brands as Nutter Butter, Honey Maid, belVita, Premium, Ritz crackers and Wheat Thins.

Guzzinati said the company will consolidate its production into its north building at the plant at 7300 South Kedzie and vacate the south building. She repeated the company’s stance from Thursday that the Chicago bakery will remain open, regardless of where the new investment goes, and that the north building will continue to operate.

The bakers’ union issued a statement saying that the company told workers they “had to come up with $46 million in annual savings at the Chicago facility for the company, or it would take [a] $130 million planned investment [the new manufacturing lines]” to its Salinas, Mexico bakery.

“And, even with the $46 million savings, there would still be severe job cuts for workers at the Chicago bakery,” said union Vice President Jethro Head.

Guzzinati said the yearly $46 million “gap” represents the difference in higher operating costs and would offset the higher capital cost of investing in the Chicago plant. The four new manufacturing lines would replace nine older, existing lines in Chicago, if the investment goes to Chicago, she said.

Mike Masterson, business representative for Local 399 of the International Union of Operating Engineers, said that Local 399 would lose 24 of its 66 electricians and operating engineers if the machinery is installed in Chicago, and would have to cut 35 members if it goes to Mexico.

He said the layoffs will take up to one year to fully implement, and that the union hopes to negotiate an incentive package for its members at or near retirement. Either way, job cuts are inevitable, he said.

“Like with most manufacturing, as they develop and build machinery that does more with fewer people, we lose headcount,” Masterson said.

The Chicago plant will remain the company’s largest U.S. bakery, regardless of where the investment goes, the Mondelez spokeswoman said.

Head said in his statement: “This company has no idea nor does it care to know of the decades of contributions made by generations of employees and their families here in Chicago.”

“It is deeply offensive to our members that a Chicago-based company would pit its good, hard-working and loyal Chicago work force against low-wage workers in another country,” he said in the statement.

“Mondelez representatives came to this meeting knowing the answers they would receive,” Ron Baker, International Strategic Campaign Coordinator for the bakers’ union, said in the press release.

“They are talking about a $130 million investment but they have already invested more than $500 million in the new Salinas, Mexico, plant where workers make less than $2 per hour and have little to no benefits, “Baker said.

The bakers’ union members “cannot compete with $2 per hour wages – nor should they,” Baker said. “We will continue to defend our workers and their standard of living.”

The company’s contract with Local 300 expires on Feb. 28, 2016. That union represents about 4,000 Mondelez workers in manufacturing facilities, flour mills and distribution centers across North America.

“People who are good at what they do aren’t necessarily going to be able to stay there,” Masterson said.

“A whole bunch of people were hired there in the past four to five years; these are people who raise families, buy houses and save to send their children to college.”

He could not say how many people were hired in the past few years.

A third union at the plant, District 8 of the International Association of Machinists and Aerospace Workers, represents about 105 employees.