Patterson Vegetable to close in June, CEO announces
04/26/2012 2:53 PM
04/26/2012 8:35 PM
Patterson Vegetable Co. will close on or about June 24, putting about 350 people out of work, its chief executive officer announced Thursday.
The frozen food operation will end after the spring harvest, about four months past the initial closure date of Feb. 20, CEO Eric Schwartz said.
The company, founded in 1946 as Patterson Frozen Foods, had warned of the closure after union employees rejected cuts in wages and benefits.
"They voted to turn that down, and that's the decision we have to live with," Schwartz said.
Leaders at the union, Teamsters Local 948, did not respond to multiple attempts to reach them Thursday.
The plant employs about 225 full-time people and 125 part-timers, Schwartz said. The total is down from the 489 cited in a notice about the Feb. 20 closure to the Stanislaus County Board of Supervisors.
"We don't want any business to close in the city of Patterson," Mayor Luis Molina said. "They've been here for decades, and many families have been employed there."
Some employees have said the company intends to reopen later with a nonunion work force, but Schwartz said that is not true.
He said management sought a reduction of $2.25 from the average wage of $14 an hour. Benefit costs were especially burdensome, he said.
"We have some classifications of employees where for every $1 in wages, we were paying $1.12 in benefits," he said.
The offer to employees included a profit-sharing program that would have kicked in when the company turned around, Schwartz said.
The laid-off workers can get help with unemployment benefits, job searches and training under a plan crafted several months ago, said Jeff Rowe, director of Alliance Worknet.
Its partners in the effort include the Stanislaus Literacy Center, the California Employment Development Department and the Central Valley Opportunity Center. The CVOC will focus on the many Spanish-speaking workers at the plant.
The company was founded by brothers Alfonso and Mario Ielmini. Their descendants sold it in 2007 to a group of executives within the operation. The facility is on the east side of Highway 33, just across from downtown.
The plant processes a variety of vegetables grown by independent farmers, including spinach, zucchini, cauliflower, tomatoes, Brussels sprouts and mustard greens. Most of the crops are grown within 30 miles of the plant, according to Patterson Vegetable's Web site.
Schwartz said demand for California-grown frozen vegetables is strong, but the company has had to compete with lower-cost producers in Mexico and China.
The company is trying to sell the plant, which needs a major upgrade, but so far has no takers, he said.
Another frozen vegetable company, Cebro Foods Inc., operates west of Newman. Its management declined to comment Thursday on Patterson Vegetable's closure.
The news comes amid signs that Patterson is close to landing about 1,500 full-time jobs, along with about 1,000 seasonal positions, through a still-unnamed venture known as Project X and thought to be online retailer Amazon.
Those jobs would help revive a Stanislaus County economy that has struggled since the housing boom ended half a decade ago. The county's jobless rate stood at 17.4 percent last month, nearly double the 9.1 percent in March 2006.
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