After a Kraft Heinz Factory Closes, Workers Struggle to Regroup
Greg Reitenauer still feels like the rug has been ripped out from under him. “You get so caught up in life,” he says. “You never think that the day will come where you’ll lose your job and have to find a new one.”
For Reitenauer, 54, that day came last July when he was laid off from the Kraft Heinz plant in Upper Macungie Township, Pa., near Allentown. He was one of roughly 400 employees who found themselves out of work when the company decided to shutter the plant, which officially closed on Nov. 18.
For 33 years, more than half his life, he’d worked the line there, first packaging processed cheese and then, later, coffee products. It had been a good job—a place where he worked hard, was paid well, and found a second family.
He’d seen the plant change over the years: Production lines had come and gone with American tastes—salad dressings, Miracle Whip, a brief foray into calcium bars—and rounds of cost-cutting had thinned managerial ranks. The employees were increasingly told to work harder, faster.
Still, the job seemed secure. The 40-year old factory had most recently produced A-1 steak sauce, Grey Poupon mustard, and Tassimo and Keurig coffee products. It was a big plant, productive and strategically located at the nexus of a number major transportation routes. Kraft had even invested in upgrades, plowing $35 million into the site in 2013. (The state of Pennsylvania rewarded that commitment with some $300,000 in grants and tax credits; Kraft Heinz either never accepted or returned the full amount.)
In fact, when Kraft merged with Heinz in March 2015, and fell under the control of its new corporate managers from 3G Capital, the Brazilian private equity firm known for its brazen cost-cutting, some of Reitenauer’s colleagues thought the plant, with its prime location and unused capacity, stood to benefit from the inevitable closure of other Kraft Heinz factories.
That was not the case. One day in November 2015, 30 minutes before the end of the first shift, Reitenauer and his fellow line workers were abruptly told to shut down their machines and head to the cafeteria for an “emergency meeting.” There, an unfamiliar woman from corporate headquarters announced that there would be no questions and began to read from a script. Sitting there, Reitenauer already sensed the coming blow—the strangeness of the gathering, the reputation of their new owner—but was still stunned when the news came: The Upper Macungie factory was one of the seven the company had chosen to close. Their work was being sent to factories in Illinois, Michigan, and Canada.
Don Cunningham, president and CEO of the Lehigh Valley Economic Development Corp., says that while the closure of the Kraft plant is unfortunate, it’s just “a small ripple” in the region’s fast-growing economy. Jobs in the local manufacturing and industrial sectors are as plentiful as they’ve ever been in the 820,000-person region, says Cunningham. In fact, the Kraft property has already been sold and will be redeveloped for industrial use.
Just a couple of decades ago, the Lehigh Valley was reeling from the closure of Bethlehem Steel. Today, because of its central location, says Cunningham, it’s a booming distribution and logistics hub for e-commerce operations like Amazon (AMZN), Walmart (WMT), and Zulily and a favored production site for food and beverage companies like Ocean Spray, Nestlé Purina PetCare, and Bimbo Bakeries, which makes Sara Lee and Entenmann’s snack cakes.
A few of those employers have already absorbed some of the laid-off Kraft Heinz workers, but the jobs aren’t quite the same. At Kraft Heinz, they worked eight-hour shifts, had solid benefits, and made $22 to $30 an hour, or roughly double the wage that one gets in the area’s e-commerce warehouses. While some area companies, such as Ocean Spray, offer comparable pay, available jobs often involve 12-hour shifts that are daunting to older workers—and half of the Kraft Heinz plant’s workers were over 50.
“I don’t want to go to a job that pays $10 an hour, and have to work every day of the week, 14 hours a day, just to live,” says Joanne Nichol, a 53-year-old worker who joined Kraft three decades ago. She knows she had a good thing—a pension, decent vacation—and she says it’s hard to wrap her head around the idea that she’s lost all that.
Karen Liberto, 61, shares the feeling. She landed at Kraft five and a half years ago, after being laid off by her longtime employer, J.C. Penney. Liberto, who is warm and grandmotherly, loved her job at Kraft, where she worked third shift and ran machines. She is at a loss about what to do next—“I don’t want to work 12-hour shifts. I’m too old for that.”—but she is more troubled by the reality that exists for her younger colleagues. “These people have to give up their family lives just to support their families.”
That’s the bind that Greg Achey, 54, finds himself in. He has a son who is a senior in high school, and a wife who also worked at Kraft. Achey had started at the plant just four years ago after being laid from his job of 28 years, and things had gone well enough that in those four years, they’d bought a new house and a new car. “I thought, ‘Where’s Kraft going to go?” He’d imagined retiring there.
Now, he is among the couple dozen former Kraft employees to have accepted a job at Ocean Spray. He is thankful for the work, but he chokes up when he talks about the costs of his new job: with the 12-hour shifts, he cannot make his son’s sporting events.
Pennsylvania’s Department of Labor and Industry, through its PA CareerLink workforce system, has given Kraft’s laid-off workers case managers and assistance in navigating their situations—from filing for unemployment to writing resumes—and it hosted a job fair on their behalf last July. The agency’s Lehigh Valley-based Rapid Response Team, which first met with workers last April, has so far reached more than 300 of the plant’s workers. Many are complimentary of the service; Achey used the resources in his job search and Liberto is currently taking keyboarding classes there.
On a visit to the agency’s Allentown location, however, the advice the office’s executive director Nancy Dischinat was doling out was less about specific skills and more about basic attitude: “It isn’t fair. We all know it isn’t fair,” she told a group of former Kraft workers that had gathered at the center in early January. “But it is what it is, and we have to figure out what your next step is.”
Dischinat has spent her entire career in workforce development, and her approach to counseling dislocated workers is by turns tough love and prodding empathy. “I’ve never sat with a group of dislocated workers where they’re not frightened,” she tells them. “It’s scary.”
The laid-off Kraft Heinz workers are also eligible for federal support. Because Heinz moved some of Allentown’s production work to Canada, they qualified for Trade Adjustment Assistance (TAA) a program that offers extra benefits—including certain tuition-free schooling and income support—to workers whose jobs have migrated overseas.
Though Kraft Heinz personnel had reportedly told the Allentown workers that they’d manage the TAA application, they never did. And after months of “getting jerked around,” says Esther Toth, a 63-year old worker who joined Kraft in 1978, she organized and filed the petition to the federal government herself. (Kraft Heinz says it encouraged affected employees to file individually.) Toth says the opportunity for so many people, who could not previously have afforded it, to go back to school is the “one positive” to come out of the plant’s closure.
But that government support only goes so far. Toth, herself, considered a business school coding program before deciding, at her her age, she wasn’t up for the pressure of studying. Reitenauer hopes to go back to school, but he’s currently mired in the process to do so—frustrated, he says, by hours on hold with different agencies, the runaround from case managers, and more and more hoops to jump through. (Layoffs, in December, at Allentown’s Unemployment Compensation Service Center made things worse, he says.)
Since November, President-elect Donald J. Trump has used his Twitter pulpit to apply public pressure to several companies to keep jobs in America. But Reitenauer doesn’t hold out much hope that Trump or any other elected official is going to come his rescue.
“Everything in this country is a political game,” he says. “I don’t think anyone actually cares about the people who work.”
A version of this article appears in the February 1, 2017 issue feature titled “Buy. Squeeze. Repeat.”