Campbell Soup Co. To Cut 725 Jobs After Closing Two Plants

By Donovan Jackson | Sep 27, 2012 01:08 PM EDT

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Campbell Soup Co. said it will close two plants, affecting about 725 workers, as the soup maker said it is looking to cut back on excess capacity.

The company unveiled the changes as it struggles to turn around its soups business amid a slow recovery in consumer spending. It said it reached excess capacity due to volume declines of U.S. canned soup, significant productivity improvements and an increased focus on new packaging formats.

"As we position Campbell for profitable growth, we must continue to optimize our U.S. plant network and diversify our manufacturing capabilities," Mark Alexander, president of Campbell North America, said. "We expect the steps we're announcing today to improve our competitiveness and performance."

Campbell said it expects to record about $115 million in costs, most in fiscal 2013. The plan will also require about $27 million in capital spending, it said. Once implemented, the plan is expected to save the company about $30 million annually by fiscal 2016, with about $21 million in savings in fiscal 2014.

The company plans to close its Sacramento, Calif., plant, its oldest U.S. facility, which currently makes soups, sauces and beverages. The location has roughly 700 full-time employees. Campbell said it will close the facility, which has the highest production costs on a per-case basis within its U.S. network, in phases and move production to its plants in Maxton, N.C.; Napoleon, Ohio, and Paris, Texas.

Campbell said it will also shutter its South Plainfield, N.J., spice plant, which has 27 employees, by March, and consolidate spice production at its larger Milwaukee plant.

The company currently employs about 19,900 people globally.

This month, Campbell said its fiscal fourth-quarter earnings rose on fewer restructuring charges. Also, soup sales rose, snapping a string of two years of falling sales in its flagship business.

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