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Thursday, September 30, 2004

Frito Lay-offs

From the Detroit Free Press:
PepsiCo Inc. on Thursday announced that it plans to close four of its Frito-Lay division plants, including one in Michigan that employs about 390 people, as part of a streamlining effort.

The 34-year-old manufacturing and warehouse facility in Allen Park will begin phasing out operations through the end of October, Frito-Lay said. Employees will be offered severance packages based on their time with the company, including transition benefits and job placement assistance.
PepsiCo also said it will close Frito-Lay plants in Council Bluffs, Iowa; Beaverton, Ore.; and Visalia, Calif. The announcement came as the beverage and snack-food concern reported net income rose 35 percent in its latest quarter from a year ago, helped by growth in beverage and snack volume, as well as a tax benefit.

PepsiCo said it intends to shift capacity from the four Frito-Lay sites to other locations. It also plans to transfer about 250 of the nearly 780 affected workers to other facilities. The company will continue to employ about 45,000 workers after it completes the plant closures by Dec. 31.
So Pepsi is raking in the cash, but it still is laying off some 530 workers and replacing them with new workers in other locations. I'm guessing the laid off workers were union members making maybe $15 or $20 an hour; their replacements in other states will probably be $5.50 an hour, no union, no benefits. But Pepsi's stockholders are making money--that's all our system cares about.