11/1/07

UFCW takes dues hit as Chiquita lays off

Chiquita Brands International Inc., owner of the Fresh Express Group headquartered in Salinas, has announced a restructuring plan and management changes that will lay off 140 jobs in Salinas.

Chiquita has cut 700 jobs from its global operations - about 400 hourly positions and about 320 salaried and managerial positions, Chiquita spokesman Michael Mitchell said Tuesday.

They include 90 full-time fruit bowl production positions and 50 administrative and management positions in Salinas, Mitchell said. The Fresh Express facility on Blanco Road will be converted to increase production of other value-added products, such as salads, Mitchell said.

"We have made the decision to exit production of fruit bowls - not actually closing plants, but converting capacity that was used for fruit bowls for production of things like salads and healthy snacks," Mitchell said.

Chiquita employs approximately 25,000 people in more than 80 countries and 1,540 in Salinas, according to its fact sheet. Fifty-nine percent of the corporation's business is outside North America.

The Fresh Express Group generates about 25 percent of Chiquita's annual profits - $1 billion out of $4 billion. The group is one of the world's largest producers of bagged salads, processing 40 million pounds of salad each month.

John Fair, chief executive officer of the Salinas Valley Chamber of Commerce, said the job losses Salinas as city officials and business leaders try to spark business growth.

"We're going in the wrong direction," Fair said. "We're trying to find jobs, not lose jobs."

Salinas has seen other companies close their doors over the past two years, including J.M. Smucker Co., which cut 120 jobs and closed its plant in 2005, Ready Pac, which employed 475 people and closed the same year, and McCormick & Co. Inc., which closed at the end of 2006, laying off another 400 workers.Mary Claypool, executive director of the Monterey County Business Council, said the value-added processing jobs are well-paid positions the county needs to maintain.

"We are struggling to try and create higher-paying jobs, and every time we lose one, it's a setback for us," Claypool said.
'It's not good news'

Tanios Viviani, the Salinas-based president of the Fresh Express Group since 2005, will take on a new role as president of global innovation and emerging markets and chief marketing officer for Chiquita, which is headquartered in Cincinnati, Ohio, the company said in a published statement.

Mitchell said Brian Kocher, president of Chiquita's North American operations, will oversee Fresh Express from a remote site.

Employees whose jobs are cut will be notified within the next two weeks, with production of fresh-cut fruit bowls stopping by early next year, Mitchell said.

"I'm obviously concerned," said Salinas Mayor Dennis Donohue, who wants to diversify Salinas' economic base over the next three years through job creation and new businesses.

"It's not good news, but (in) agriculture, some jobs can be reabsorbed," Donohue said.

Some laid-off workers could move to other areas of the company, Mitchell said, but they will need to apply for those positions. He said the company will negotiate the job cuts with United Food and Commercial Workers Local 5.

Representatives from UFCW Local 5 in Salinas were unavailable for comment Tuesday because the office was closed.

According to a statement issued by Chiquita, the company expects to reduce costs by $60 million to $80 million annually starting next year.
E. coli effects still felt

The company said it expects the savings to come from reducing the company's operating and corporate overhead through a 21-percent reduction in management positions at the three highest levels in the company.

"Since 2005, market dynamics and the competitive landscape have been rapidly changing, which has limited our profitability and slowed the execution of our strategy," said Fernando Aguirre, chairman and chief executive officer.

In August, Chiquita reported what was considered disappointing second-quarter results with a $9 million profit. The company's statement said the layoffs come as a result of high European Union tariffs for bananas, high costs of fuel and the downturn in salad sales triggered by the September 2006 E. coli outbreak linked to Dole bagged spinach, which killed at least three people and sickened more than 200 around the nation.

Chiquita is due to report its third-quarter financials Nov. 8.

Andrew Cumming, president of King City-based Metz Fresh, said he doesn't believe Chiquita's announcement will affect Metz Fresh. The spinach grower/processor recalled 8,118 cartons of bagged spinach for suspected salmonella contamination at the end of August, but Cumming said sales continue to rebound from the recall and last September's E. coli outbreak.

"The outlook is positive as we've grown a lot since the company started and continue to grow," he said.

(californianonline.com)

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