Campbell Soup Co. today announced the closing of its south Sacramento plant, where the company has made canned soup for more than 60 years.
The plant will be phased out, with final shutdown coming next July. It will eliminate 700 full-time jobs, a devastating development in one of the region's most hardscrabble neighborhoods. The plant's workers, who are members of the Teamsters union, earn as much as $20 an hour, said Troy Givans, interim economic development manager for Sacramento County.
"They were very good jobs, they're very important jobs in the community in south Sacramento, and in the region," Givans said.
The company said it plans to shift most of Sacramento's production to Campbell's remaining plants in Maxton, N.C.; Napoleon, Ohio; and Paris, Texas. "Within that plant network, we have excess capacity," said Campbell's spokesman Anthony Sanzio in an interview outside the Franklin Boulevard plant this morning.
Workers learned of the shutdown in a predawn meeting inside the plant. At around 6:30 a.m., employees started streaming out of the parking lots in cars and pickups through the main gate. Some were resigned to their fate, while others were angry, punching the gas and squealing off down Franklin.
"Gone. No more Campbell Soup," said one worker who left on a bike.
Jesse Shanker, a 22-year employee, said the closure wasn't a surprise. "Finally, today, they made the announcement they were closing it down. They told us that soup sales are going really, really slow, and it has been sliding over the years. And right now, they can't afford to run this plant."
Sanzio said, "Sacramento is one of our oldest plants, one of our least-efficient. It has the highest product cost per case of any plant in the U.S. So from a business decision, the case (to close) is clear and compelling." The plant opened in 1947.
Bill Bishop of Willard Bishop Consulting, a Chicago food industry market research firm, said sales of canned soup have been in decline for several years as consumers switch to ready-to-eat meals and snacks. "Other forms of quick meals have replaced or substituted for soup," he said.
Campbell's itself is trying to move into more consumer-friendly packaging, such as pouches. But its U.S. share of the soup market has fallen from 48 percent in 2008 to 42 percent this year, according to Euromonitor International.
The announcement comes the same week that Comcast revealed it was shutting a 300-employee call center in Natomas, but "this is ten times the impact," said economist Jeff Michael of the University of the Pacific. "It's a significant blow to the manufacturing base in a region that doesn't have a strong manufacturing base." Michael said the ripple effects on suppliers and others could cost the region a total of 2,000 jobs. For instance, the cans are made right in the factory by a vendor, Silgan Containers. Officials with Silgan weren't immediately available for comment.
But Michael said it won't bring a halt to the region's late-blooming economic recovery. Job growth the past year has totalled 2.2 percent, and unemployment in the region is down to 10.3 percent.
Campbell's still maintains two tomato-processing plants in the region, in Dixon and Stockton, employing more than 400 workers combined. The company remains one of the top purchasers of the Central Valley's tomato crop.
The company said it will work with employees on severance packages. State and county officials said they will pull together job-training and other resources. But workers were just beginning to absorb the shock.
"This is devastating. They are offering us a lot of help with applications and resumes. A lot of us have been working here a lot of years and are at the age where it is going to be hard to find jobs," said Valerie Starr, who's worked at the plant 13 years.
The plant nearly closed in 1992 and 1996 but was kept open after local officials put together economic incentives. Among other things, the company got a property tax rebate worth $500,000 a year.