Nabisco rolls out layoffs in Chicago
Snack giant Nabisco on Wednesday began the process of laying off hundreds of workers at its Chicago factory as it expands operations in Mexico, despite facing criticism for the move from White House hopefuls Hillary Clinton and Donald Trump.
Nabisco is expected to cut 277 workers this week — the first wave in a total of 600 layoffs — as the company that makes Oreos, Chips Ahoy and Nilla Wafers shifts work to a Mexico plant where it has invested $130 million in a new production line.
Nabisco issued a 60-day notice to affected employees in mid-January about the layoffs and “that group of employees are now leaving the business,” said Laurie Guzzinati, a spokeswoman for Nabisco’s parent company, Mondelez International.
Republican Trump and Democrat Clinton have criticized Nabisco for the move. Both have promised to pursue legislation if elected to force companies like Nabisco to pay back tax benefits they’ve received if they send jobs offshore. One of the forerunner companies of Mondelez, RJR Nabisco, was promised $90 mil- lion in incentives from Chicago and the state in the early 1990s to remain in Chicago.
Ahead of last week’s Illinois primary, Clinton met with workers impacted by the layoffs and spoke briefly with Mondelez CEO Irene Rosenfeld in hopes of persuading her to reconsider the move. Executives for Mondelez, which generated more than $30 billion in revenue last year, say the company will save $46 million annually with the cuts and shift in production to its more efficient factory line in Mexico.
“My understanding is that Irene Rosenfeld reinforced (to Clinton) our commitment to the Chicago bakery and the U.S. market overall, where we’ve got a strong manufacturing presence and approximately 20,000 employees,” Guzzinati said.
Trump, who was once a pitchman for the Oreo, has vowed to boycott the product.
The company says it considered building the factory lines in Chicago but opted not to because of the $46 million cost gap between operating in Chicago and Salinas, Mexico.