Friday, November 25, 2016

Kraft Lehigh Valley Closed It's Doors For Good

On Friday November 18, 2016 Kraft has left the building for good here in the Lehigh Valley after 44 years.

The employees who made Grey Poupon are being replaced by workers in Holland, Michigan earning about $10,000 a year ($4.80 an hour) less.

Although it's unknown how much this building was sold for according to Lehigh County records it was appraised at $12,814,500. (Total taxes were $245,530 a year) No doubt a good portion could go towards the estimated $17.2 million Kraft-Heinz planned to spend on the mustard lines going to their new location.

Some of which those costs will be offset with the $500,000 they will receive over 3 years from the good folks in Michigan for coming there. In addition to a 12 year property tax abatement and another $50,000 going towards recruiting and training 50 new employees.

The coffee lines-- Although not all of the Kraft coffee lines are moving from the U.S. those in the Lehigh Valley were moved to Canada where the Canadian dollar is worth $.74 cents USD. Thus also gaining them an advantage over U.S. paid workers.

Although no mention was made where the A1 steak sauce lines went, given above I doubt it went to a higher salaried facility. Since Heinz plants rely on processing huge quantities of tomato paste I'd think it's safe to assume it went within one of their already established plants.

So Kids....
This isn't a matter of how hard employees worked. Nor how great a location this plant was in. How much any of us wanted them to stay. Nor Kraft shunning the Lehigh Valley. It's purely a move for economic reasons.

If Pennsylvania taxpayers were willing to blow off their property taxes, employees take a 20% cut in pay and offer Kraft-Heinz a half million dollar incentive to stay perhaps they might have considered it. The sad fact is Michigan right now is far more distressed then we are. The Canadian dollar is worth only three quarters of the U.S. dollar. This boils down to a number of reasons as to not why Kraft should stay but rather reasons far more why they shouldn't. This is the hard economic truth.

Throughout my 33 years working in this plant we were always made acutely aware how much we were in competition with other plants. We outperformed several which were shuttered over those years who's operations were then moved here. Margarine, salad dressings and process & natural cut cheese to name a few. As each became less profitable over time the Lehigh Valley plant was left only with coffee, A1 and Grey Poupon. In 1972 the only reason why the Lehigh Valley plant came into existence in the first was because of the high costs of manufacturing this stuff in New York state (just outside of New York city). So now it's our turn I suppose.

No hard feelings towards Kraft. I understand all things must move on no matter how much we'd rather they didn't. Such is life.

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