Del Monte Foods closing two more U.S. plants, laying off hundreds
- Del Monte Foods is closing two manufacturing plants and selling two others, affecting more than 800 jobs.
- Company executives is streamlining its domestic operations amid headwinds that include U.S. tariffs on China and rising metal costs.
- Food manufacturers announced nearly 16,000 layoffs in the first seven months of the year, the highest for the period since 2009.
Del Monte Foods is closing two of its remaining 10 U.S. plants, laying off hundreds of workers, as the food company looks to further cut costs amid headwinds that include tariffs and rising metal packaging costs. The layoffs add to a tally that is already the highest for the food manufacturing industry in a decade.
Food manufacturers laid off nearly 16,000 workers in the first seven months of the year, up 85% from a year ago and the highest total for the sector in that period since 2009, according to outplacement firm Challenger Gray & Christmas.
Del Monte Foods, the U.S. subsidiary of Del Monte Pacific, in the fall plans to close its plant in Mendota, Illinois, laying off nearly 500 workers at the facility that packages products including peas, carrots and mixed vegetables. It also plans to shutter its plant in Sleepy Eye, Minnesota, where as many as 400 are employed during the processing season.
Separately, the company is selling a facility in Cambria, Wisconsin, that employs about 35 people and as many as 280 seasonal workers, as well as manufacturing assets at its plant in Crystal City, Texas, where 120 people work full-time and another 300 are seasonal employees.
"This decision has been difficult and has come after careful consideration," Joselito Campos, managing director and CEO of Philippines-based Del Monte Pacific, said in a news release. "This restructuring is a necessary step for us to remain competitive in a rapidly changing marketplace."
Workers will be laid off in stages, with the two facilities closing around the end of October after the packing season and then conclude when labeling and shipping is done in June, the company said.
"Approximately 188 full-time employees and 656 seasonal employees will be affected by the facility closures," a spokesperson for the company told CBS MoneyWatch.
Metal tariffs raising costs
The canned produce manufacturer's margins are being squeezed in part by the Trump administration's tariffs on steel and aluminum imports, prompting a review of its manufacturing and distribution operations in the U.S. In an earnings call at the end of June, Del Monte Pacific CFO Parag Sachdeva cited "headwinds including rising metal packaging prices and impact of tariffs imposed by the U.S. government."
In recent years, Del Monte Foods has contended with declining sales in the packaged fruit and vegetable categories, and the latest closings follow the shuttering of facilities in North Carolina, Indiana and California and Arkansas since 2017.
Founded in California in the 1880s, Del Monte Foods sold its canned fruits and vegetable business to its Philippine parent in 2014 for $1.68 billion. The company operates a large pineapple plantation in the Philippines.