It's an economic oasis in one of Sacramento's most impoverished neighborhoods – and an enduring symbol of the region's Big Tomato roots.

No wonder the shutdown of Campbell Soup Co.'s 65-year-old factory in south Sacramento, announced early Thursday, quickly became a bombshell felt up and down Franklin Boulevard and as far away as the Governor's Office.

The closure, to be completed in stages between now and next July, will eliminate 700 solidly blue-collar jobs, some paying $20 an hour or more. It won't stop Sacramento's late-arriving economic recovery, experts said, but it will hurt the job market and take another piece out of the region's middle class.

"Good jobs for poor people," said Monsignor James Church, pastor at nearby St. Rose Catholic Church. "This is going to whack our area – we're poor enough as it is."

Plant worker Dave Martin said the company had been dropping hints for months that the factory was in trouble, with managers complaining in staff meetings about slumping soup sales and bloated production costs. Campbell's has been losing market share as consumers drift away from canned soup.

Managers told workers that the Sacramento plant, whose workforce is represented by the Teamsters, pays the highest wages of any Campbell's factory, according to Martin. He added that some of the plant's chicken-noodle soup production was moved to another facility a month ago.

"Finally, today, they made the announcement they were closing it down," said Jesse Shanker, who has worked at the plant 22 years. "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."

About 400 employees got word of the closure in a pre-dawn meeting, and others received the news in the afternoon. The plant was closed for the rest of the week to give workers a chance to absorb the news, said Campbell spokesman Anthony Sanzio.

"Sacramento is one of our oldest plants, one of our least efficient," he said. "It has the highest product cost per case of any plant in the U.S. So from a business decision, the case (for closing the plant) is clear and compelling."

Most of the plant's production – canned soup, Prego tomato sauce, V8 juice and more – will shift to Campbell's plants in Maxton, N.C.; Napoleon, Ohio; and Paris, Texas.

Sanzio said Campbell has been considering the shutdown for months but didn't make a final decision until Tuesday.

The news left government officials stunned. City and county officials – the plant is just outside the city limits, in unincorporated Sacramento County – said they had no inkling a shutdown was coming.

Troy Givans, the county's interim economic development manager, said officials will work with laid-off employees on job training and other forms of assistance. They will also start looking at how to re-use the 136-acre site.

"We need to start bearing down and seeing how we can replace those jobs," he said.

Sanzio said Campbell's didn't give advance warning to government officials because the shutdown was really an issue of excess plant capacity. "There was nothing the government was going to do to alleviate that," he said.

State officials react

Still, the announcement put state officials on the defensive.

Just three days ago, Comcast said it was closing all of its California call centers, including a 300-employee site in Natomas. A few weeks ago, Rancho Cordova insurer Vision Service Plan threatened to move because of a regulatory issue.

"I know there might be a tendency, especially in this political season, to ... come to some conclusion that it's the old vaunted 'California business climate' that is responsible for some of these decisions," said Senate President Pro Tem Darrell Steinberg, D-Sacramento, at a Capitol news conference. "And that's just not the case."

Gov. Jerry Brown's senior adviser for jobs and business development, Mike Rossi, also weighed in.

In a prepared statement, Rossi said Campbell's decision was the result of "an antiquated facility." He noted that earlier this year, Campbell's bought a food-and-beverage plant in Bakersfield with 1,600 employees.

Campbell Soup isn't deserting the area altogether. It will continue to operate tomato-processing plants in Stockton and Dixon, employing a combined 450 workers. The company buys almost all of its tomatoes from California growers, Sanzio said.

But even as Campbell's maintains a presence in the region, the plant closure will bring economic hardship. The company offered middle-class wages to blue-collar workers – something of a vanishing breed.

Another big middle-class employer, the unionized grocery industry, is under siege as nonunion chains make big inroads in Northern California. That's putting pressure on workers for wage and benefit concessions.

Campbell's offered "very good jobs," Givans said. "They're very important jobs in the community in south Sacramento, and in the region."

Frank Cable, whose South Sacramento Leader Pharmacy is three-quarters of a mile from the plant, is worried about the economic hole that will be left behind. Some of his customers are Campbell's employees.

"It's going to leave a lot of people … who live on the boulevard unemployed and without health insurance," Cable said. "It isn't good news."

Suppliers, transportation companies and others will feel ripple effects, and the total job loss could reach 2,000, said Jeff Michael, an economist at the University of the Pacific.

One potential victim: Silgan Containers, a can manufacturer located inside the Campbell's plant itself. Officials with Silgan couldn't be reached for comment.

Michael said the Campbell's announcement isn't "enough to derail a recovery that is adding 10,000 jobs per year, but (is) a significant setback."

In actuality, the region added 17,600 jobs in the past year, lowering unemployment to 10.3 percent.

Fading legacy

While Sacramento is still home to some food processors, notably Blue Diamond Growers, the Campbell's shutdown leaves the region another step removed from its agricultural legacy. Food processors employ 5,000 workers in the region, about half as many as 20 years ago.

"There used to be a lot of canneries in the Sacramento area, if you go back several decades," said Rob Neenan, president of the California League of Food Processors. "There are not as many as there used to be."

The Campbell's plant opened in 1947, when south Sacramento still retained much of its rural quality, and helped burnish the region's reputation as the king of the tomato business. Employment once totaled 2,200.

In the mid-1990s, the company publicly threatened to shut the plant because of cost concerns. City and county officials pulled together a package of incentives, including a property-tax break worth $500,000 a year. The company kept the plant open and poured more than $100 million into capital improvements.

The difference between then and now? The company is in a period of stagnation. Demand for the main product manufactured in Sacramento, canned soup, is declining.

"Soup is not as contemporary a meal choice or a snack choice as it used to be," said Bill Bishop of Willard Bishop consulting in Chicago. "Other forms of quick meals have replaced or substituted for soup."

Canned soup "is not one of the most vigorous categories in the grocery store," said Bob Reynolds, a supermarket industry consultant in Moraga.

Campbell's, which does about $7.7 billion a year in sales, has been moving to diversify by introducing products such as microwaveable Moroccan-style chicken soup in plastic tubs. But those products are being made by contract manufacturers, not Campbell Soup employees.

The company also announced Thursday it's closing a spice plant in New Jersey.

© Copyright The Sacramento Bee. All rights reserved.