Maker of Oreo, Chips Ahoy looks to move jobs out of Chicago

By Kevin Beese For Chronicle Media
Mondelez International, which creates Oreo and Chips Ahoy cookies, Triscuit and Ritz crackers, and belVita breakfast biscuits, will be eliminating up to 600 jobs at its Chicago plant by the end of March. (Photo by Mike Mitchell)

Mondelez International, which creates Oreo and Chips Ahoy cookies, Triscuit and Ritz crackers, and belVita breakfast biscuits, will be eliminating up to 600 jobs at its Chicago plant by the end of March. (Photo by Mike Mitchell)

Cook County officials are none too sweet on seeing 600 local jobs eliminated as a food company puts money into its plant in Mexico.

Mondelez International, which creates Oreo and Chips Ahoy cookies, Triscuit and Ritz crackers, and belVita breakfast biscuits, will be eliminating up to 600 jobs at its Chicago plant. The first impacts will be this month, relating to the 277 employees that received Worker Adjustment and Retraining Notification notices in mid-January. Mondelez said the reduction will happen in a phased approach over a number of months.

Mondelez, the parent company of Nabisco, will be replacing nine older manufacturing lines at the Chicago plant, located at 7300 S. Kedzie Ave., with four new lines at the company’s plant in Salinas, Mexico.

The Chicago plant had been in the running for the new lines, but lost out to Salinas.

“Even if the new lines came to Chicago there would have been an impact on employees,” said Laurie Guzzinati, senior director of corporate & government affairs in North America for Mondelez. “The four lines are replacing nine lines. The modern lines are more efficient. Two-to-one would be the approximate headcount impact (old line to new line).”

Guzzinati stressed that the bakery is remaining open for belVita and other products and is not shutting down as presidential candidate Donald Trump claimed in a stump speech.

Cook County officials feel that the company took advantage of tax incentives offered to the firm and is now turning its back on the South Side of Chicago. County commissioners unanimously passed a resolution earlier this month, calling for Mondelez to retain its relationship with Chicago.

Commissioners said the company, in 1993, cited required plant updates and local officials helped with the Nabisco plant expansion. They noted that since ’93 the company has received tax incentives of upwards of $90 million, including a state enterprise zone designation that provided the firm $29 million in tax savings over 10 years and a Chicago tax-increment financing district that secured $35 million in tax savings for the business.

The county resolution says union bakers’ years of work to build the iconic brands are being rewarded “with callous disregard and the displacement of their jobs to less regulated areas of the world with labor forces that work for poverty wages.”

State figures show that the number of manufacturing jobs in Chicago were cut in half between 2001 and 2014.

The Chicago baking plant has been in existence since 1958.

“I understand that we live in a globalized economy,” said Commissioner Jesus “Chuy” Garcia, who spearheaded the resolution. “I understand that there is an interdependency between the economies in the U.S., Canada and Mexico, my country of origin. This resolution is simply imploring Mondelez and Nabisco to sit and continue to dialogue with the affected workers, many of them residents of Chicago’s South and Southwest sides and suburban communities.”

The resolution also says that local companies that move jobs to low-paying countries will be seen as “abandoning their relationship with Cook County.”

Commissioner Richard Boykin said far too often companies take advantage of tax incentives and then turn around and outsource jobs and close down manufacturing facilities.

“It is not good corporate citizenship,” Boykin said. “… This resolution does not go far enough. We’ve got to send a real signal as a county to these corporations who would seek to do this. We’ve got to expand our manufacturing base. Look, we have devastated communities that have been harmed by poverty and unemployment. These kids who live in these communities deserve a right to work at these plants like Nabisco and Mondelez.”

He said companies taking the approach of only looking at the bottom line and getting wealthier and wealthier by outsourcing jobs is the wrong avenue to take.

Commissioner John Fritchey felt the Mondelez case is a call for more money to be put into educating our youth.

“When we are giving them either no opportunities or not the skills that they need to compete, we are putting them out into a world very different than what they are being trained for,” Fritchey said. “So we do need to work with these companies to try to get them to stay here, but what we need to try to do is make sure we are training and educating our kids and even older workers so that these companies want to stay here.”

Commissioner Debra Sims said the county needs to make companies stay.

“If we give incentives, maybe we say, ‘You have to stay longer,’” Sims said. “Give 100-year leases and say, ‘If you leave, it will cost you X amount of dollars to exit.’”

Mondelez’s Guzzinati said it is unlikely that the county resolution will have any impact on the company’s decision as affected employees were given 60-day notices back in January. She said the Chicago bakery plant employed 1,200 employees before the announcement about the manufacturing lines moving to Mexico.

She said because some employees have retired, left and moved to other roles in the company, the number of workers affected in the Chicago bakery is expected to be less than 600.

“The Chicago bakery is remaining open and remaining an important site for it,” Guzzinati said. “It is our Midwest bakery. We access distribution there. It will continue to be one of our larger manufacturing facilities.”

She said belVita breakfast biscuits will continue to be produced at the Chicago plant.

“The plant will remain an important part of the company; it will remain an important part of the community,” Guzzinati said.

She said the 1993 tax incentives were when Nabisco owned the company and many of incentives related to an adjacent property eyed for expansion, but was sold by former company owner Kraft to the city of Chicago around 2004. A school is now located on that parcel.

Going back to the early ’90s, that was more than two decades ago and two predecessors ago,” Guzzinati said. “There are currently no tax benefits or incentives related to the 1993 investment.”

She said the bakery is in an enterprise zone, which provides “minimal tax benefits.”



Like us on Facebook


Follow us on Twitter





— Maker of Oreos, Chips Ahoy looks to move jobs out of Chicago —