The Dunkirk-Fredonia area took a gut punch Wednesday when ConAgra Foods announced that it would close its Carriage House plants in those communities by next February, resulting in the loss of about 425 jobs.
Employees at the plants learned details of the closings during meetings Wednesday morning, according to their union, Chapter 266 NCFO, Employees International Union.
The union said closings will be done in phases, by department, over the next 11 months, with a final closing target of next February. Once a department is closed, production lines will be taken down and shipped to other locations, primarily Buckner, Ky.
The shutdown will begin this summer and “will allow the company to operate more effectively and efficiently,” said Daniel Hare, a ConAgra spokesman.
The closings were first announced 15 months ago by the plants’ previous owner, Ralcorp, which at the time was just two months away from completing a $5 billion deal to sell the facilities and other operations to ConAgra.
“When they bought it from Ralcorp, they bought us to shut us down,” said Tom Dickerson, the union president.
Reaction was sad and bitter.
“I don’t think we were surprised by this news, but we were sure disappointed,” said Fredonia Mayor Stephen W. Keefe. “When we first met with Ralcorp (before the sale to ConAgra), they told us there were no intentions of changing anything,” he said. “I guess when the corporation talks, you can’t always believe them.”
Besides SUNY Fredonia, the food-processing plants are the largest employers in northern Chautauqua County. Keefe said the impact will have an even bigger effect if property tax dollars are lost from the closings.
He said he hopes the site is marketed as part of the state’s Start-Up New York program that reduces taxes on certain properties within the zone near the college.
The company had not been willing to talk about its plans, said Chautauqua County Executive Vincent W. Horrigan. ConAgra representatives, according to Horrigan, “said there is no opportunity to sit down and talk right now.”
“Obviously, our goal would be to market the business to another food manufacturer,” Horrigan said. “But we would be open to anything we can get.”
“This blow to the northern area of our county is especially terrible,” he said.
The closings involve Carriage House Co.’s Dunkirk factory that makes private-label condiments and sauces, including salad dressings and a variety of beverage mixes and syrups. The plant, which Ralcorp acquired in 2000 as part of its purchase of Red Wing Co., also makes seasonal grape pulp and juice.
Dickerson, the union president, said the closings will have a devastating impact on the Dunkirk-Fredonia economy, not only by displacing 425 workers who are an average of 47 years old, but also by taking away business from local companies that supply the ConAgra plants. “It’s unbelievable,” he said. “It’s just a trickle down.”
“These are decent-paying jobs, and there are no jobs available. It’s going to devastate the area.”
Dunkirk Mayor A.J. Dolce echoed that concern. “This is extremely tough, as there just are not avenues to place 425 employees in the local workforce,” he said.
ConAgra’s purchase of Ralcorp last March for $5 billion made it the country’s biggest manufacturer of private-label foods and expanded its position in the market for cereals, crackers and other packaged foods sold as store brands.
ConAgra said last month that its private-label business had been struggling and had yielded “disappointing” results.
The company warned that the Ralcorp acquisition would contribute 20 cents per share to its profits this year, less than the 25 cents per share that executives expected.
ConAgra also said they still expected to reduce costs by as much as $300 million over the next three years as Ralcorp operations were melded into their own.
“To cut to the chase, our biggest issue is that the private brands operations are taking longer to fix than we thought, and that is weighing on our operations,” ConAgra CEO Gary M. Rodkin said during a conference call last month to discuss the company’s reduced profit outlook.
ConAgra will continue to operate Sugar Kake Cookie, a Town of Tonawanda plant that makes sandwich creme cookies for retailers such as Walmart. Another former Ralcorp plant, Petri Baking Products, a Silver Creek facility that made home-style cookies, closed last year.
The closings are ominous for local small businesses.
At the Mancuso Service Station on Route 20 in Fredonia, Anthony Mancuso, 38, is part of the third generation in his family’s business that has served plant employees for years. The closings “will impact every business in Fredonia,” he said.
Kevin Russo, owner of Mary’s Deli in Dunkirk and Fredonia, called the news, “another terrible hit.”
Russo has operated the pizza and sandwich shops for 35 years, and many of his customers worked at the local plants.
In addition, he catered and sent food over to the plants for special occasions.
“I don’t know how much more we can take,” said Russo, who added that his family’s history of running businesses goes back to his grandfather’s fruit stand in Fredonia about 100 years ago.
“These are hardworking people who are going to be putting their hands in their pockets and coming up empty,” he said.
Chautauqua correspondent Susan Chiappone contributed to this report. email: firstname.lastname@example.org