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Published: Friday, 4/26/2002

Cereal-plant jobs in jeopardy

BY JON CHAVEZ
BLADE BUSINESS WRITER

A Minneapolis company buying two General Mills plants in Toledo may renege on its vow to hire 125 workers at a cereal plant once it takes control this summer.

International Multifoods Corp., which has a deal to purchase General Mills' cake mix and cereal plants on Laskey Road, said this week it plans to retain 125 workers at the Betty Crocker cake mix operations.

But it is considering not hiring another 100 workers to run a distribution center to be made from the cereal plant. Instead, it may have another company run the center, which would not provide preferential hiring to any of the 460 cereal plant employees expected to lose their jobs by the end of July.

``We are considering having a third party to hire and run the warehouse,'' said Jill Schmidt, a spokesman for Multifoods. ``We haven't made a final decision on whether to outsource it or run it ourselves. We won't make that decision until after we buy the plant.''

The takeover is expected to be completed Aug. 1. Multifoods said in November when it purchased several General Mills' locations that it intended to retain the 125 Toledo cake-mix workers, who now make Betty Crocker products but will make Pillsbury products.

Multifoods chief executive Gary Costley, in town to tour the plants he would soon own, said five months ago that his company would hire 100 cereal plant workers to run the distribution center and 25 others to work in the cake mix operation, which will be adding a ready to serve frosting line. That would leave 335 others on permanent layoff from General Mills.

News of the purchase, at the time, helped offset the net loss of local jobs, jobs which pay about $20 an hour. Now, news of the possibility that no workers who make Cheerios and other cereals may be hired has created anxiety.

Officials of Grain Millers Local 58, which represents workers at the side-by-side plants, said they are fearful a third party won't hire any General Mills workers for the distribution center.

“I don't see much hope in it for us,'' said Jim Skelly, union chairman.

Ms. Schmidt said the company is unsure if it will need the 25 workers for the cake mix operation in November when it takes over the plant.

General Mills agreed in October to close the cereal plant and sell it and the bake-mix factory to obtain Federal Trade Commission approval of its purchase of the Pillsbury Co. from Diageo PLC.

As part of the deal, Multifoods agreed to buy the cake mix plant but General Mills persuaded it to buy the cereal factory, too, because it did not want to operate a cereal plant next door to a competitor. Multifoods said it would convert the building to a distribution center and General Mills, and as part of the $11.5 million deal, said it would invest money in the cake-mix factory to get it ready for Pillsbury products.

In a related development, 21 cereal plant workers were offered and accepted jobs in February by General Mills in the Betty Crocker factory. But last week the company rescinded the job offers, angering union officials and those workers who thought they would be retained by Multifoods.

Mr. Skelly said General Mills led those employees to believe they had permanent jobs, and they lost four months of looking for something to replace the work they will lose this summer.

One of the 21 workers, who spoke only if his name was not used, said, ``In January they said I got a job. I signed a paper, then for three months they told us nothing. In the meantime, General Mills hired an outside company to help people find jobs, but I've have done nothing. I haven't looked, I haven't done any resumes, I haven't done anything because I thought I had a job.

“It's a feeling like you've lost your job twice within in six months.”

Multifoods did not authorize the job offers, although it eventually may hire more workers in the cake-mix factory, Ms. Schmidt said.



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