THE SUNDAY E-MAIL
Ottawa Postal Workers’ News Bulletin
January 19, 2014
Not long ago, The Sunday e-mail reported that the U.S. giant monopoly US Steel Corporation had announced that it would be permanently shutting down the iron and steelmaking operations which it controls at Hilton Works on December 31, 2013 ending in this way over 100 years of steelmaking activities in the city of Hamilton and by the same token, devastating the entire community.
Two weeks after this shameless announcement was made, the people of Ontario was dealth another major shocking blow by yet another U.S. giant monopoly. This time the strike against the people came from Warren Buffet’s Berkshire Hathaway empire announcing the permanent closure of the Heinz food processing plant in Leamington, Ontario.
The closure is to be made in June, 2014 and will throw 740 plant workers out of work and deprive over 40 local farmers of a buyer for the tomatoes they have been producing since the company began its operations there in 1909. The closure will also affect an additional 350 seasonal workers who are employed in the fields during the harvesting season.
The population of Leamington is estimated to be close to 29,000. The Heinz food processing plant is situated right in the centre of the city with generations of families having worked at the plant, or the surrounding farms and related industries. The entire community has been struck in its heart and very being by what Buffet’s U.S Berkshire Hathaway monopoly conglomerate calls a “simple business decision.”
According to farmers, Heinz has contracts with 46 farmers who grow tomatoes on 5,000 acres within 100 kilometres of the Leamington plant, representing half of Ontario’s $52 million annual processing tomato crop. Forty per cent of all the field tomatoes grown in Ontario are shipped to this plant. This represents roughly 225,000 tons of tomatoes annually at $93-$95 a ton which constitute a substantial income for farmers.
With the plant closure, the farmers will be left without a buyer for their tomatoes and will not be able to sell them either to other food processing plants since these already have negotiated contracts with other farmers. This means the farmers who were providing the Heinz plant with the raw materials will have to stop growing field tomatoes and start growing other foods.
Modern tomato farming requires specialized equipment that does not come cheap. All this equipment will now be left out to rust. The cost of changing to producing other foods is considerable because the farmers will have to buy new farming equipment that differs from that used for growing and harvesting tomatoes.
Aside from the 740 unionized workers and the 350 seasonal workers affected, the factory also employs 150 salaried staff who will also be let go. There is no doubt that farmers and workers will bear the brunt of this vicious strike against their community by another U.S. monopoly and mega U.S. empire. Heinz also provides the municipality with $1.5 million annually in property taxes and this money is split between Essex County, the school board and the municipality. It is estimated that Heinz property taxes represent almost 3% of the town’s budget. Heinz is a major buyer of water and electricity. The closure of the plant is expected to have a domino effect on the entire regional economy.
H.J. Heinz Company which is headquartered in Pittsburg, Pennsylvania is the most global of all U.S.-based food companies and was taken over by Berkshire Hathaway and 3G Capital-a Brazilian global investment firm in a US$28 billion deal back in February, 2013. Warren Buffet is one of the world’s wealthiest man and few billionaires. He is the Chairman, President and CEO of Berkshire Hathaway which he also controls.
Berkshire Hathaway is a conglomerate headquartered in Omaha, Nebraska that oversees and manages a number of subsidiary companies. The company wholly owns GEICO, BNSF, Lubrizol, Dairy Queen, Fruit of the Loom, Helzberg Diamonds, Benjamin Moore and NetJets, just to name a few, and has significant minority holdings in American Express, Coca-Cola, Wells Fargo and IBM.
In announcing the closure, Michael Mullen, Senior Vice President of Corporate and Government Affairs for Heinz stated: “Our decision to consolidate manufacturing across North America is a critical step in our plan to ensure we are operating as efficiently and effectively as possible to become more competitive in a challenging environment, and to accelerate the company’s future growth”.
Further, in a letter handed out to the plant workers the same day the announcement was made, Heinz said: “This decision is not a reflection of the commitment of our employees or the quality of the product you make. It is based primarily on excess capacity in our North American manufacturing system”. Heinz also claims that sales in its North American division dropped by 1.4% or $US46 million, to $3.2 billion in the last fiscal year.
No consultations were held with the workers, the farmers or the community by Heinz Company regarding the plant closure. The strike came as a shock to everyone. As a matter of fact, the workers were told in the afternoon of November 14, 2013, the day the company released its statement announcing the closure. The farmers were told a week before. The union representing the workers, the farmers, the mayor and all other elected representatives were all kept away from the decision.
Aside from the closure of the Heinz plant in Leamington, the company also announced the closure of its Florence plant in South Carolina and its Pocatello plant in Idaho affecting 200 and 410 american workers respectively. Production from these three plants will be moved within the next few months to other plants mainly in the U.S. and in St. Marys, Ontario.
The Heinz plant in Leamington is the second biggest plant in all of the Heinz operations around the world. The company’s two other Canadian plants are in St. Marys and Toronto. In total, the company employs about 1,200 workers in Canada. Leamington Mayor John Patterson said the decision will hit the community hard. “They have been the biggest employer since forever”, he told reporters.
In August 2013, just a few months before the anouncement was made, H.J. Heinz Co. eliminated 600 office jobs across the U.S. and Canada, including 350 in Pittsburgh, nearly a third of its operation there.
Ontario Liberal Premier Kathleen Wynne who is also the Minister responsible for agriculture said “there is little the province can do when a company has made a business decision”. In response to critisism by NDP MPP Taras Natyshak (Essex) made during Question Period at Queen’s Park, Wynne replied “the third party thinks they can control the private sector. That’s not how it works”. Wynne also claimed to have done everything she could to prevent the Heinz food processing plant from closing but to no avail.
Premier Wynne has offered $200,000 to “help the community pursue new opportunities for growth”, a pitance considering all the wealth that the farmers, the workers and the overall community have produced since 1909, the time Heinz came to Leamington and expanded its operations from the U.S. into Canada. H. J. Heinz Co. is evaluated to be worth $28 billion.
Farmers say they want compensation from Heinz for the cancellation of their contract and the work they already put into next year’s crop. Workers also want to ensure that their benefits and pensions will be guaranteed by the company. However, no measures on these fronts have been announced.
According to the National Farmers’ Union, the closure of the Heinz plant was the latest of several Canadian food processing plants bought then sold by investors that move production to other countries in pursuit of higher profits. “The trend bodes ill for Canadians who want to eat food that is grown and processed within our borders, and is a direct result of the federal government’s policy drive to expand agri-food exports at the expense of Canadian food sovereignty”, says the National Farmers’ Union.
The workers at the plant are represented by the United Food and Commercial Worker (UFCW) Local 459 and both the local and national union have denounced the closure as a shock and severe blow to the community.
Paul Meinema, president of the UFCW Canada National Council said regarding the closure: “Today’s announcement is another example of a transnational private equity firm swooping in to a Canadian community and sucking up the hard-earned value of an operation that was built by generations of hard-working Canadians and their families”.
In early December 2013, less than a month after the Heinz “business decision” to close its Leamington plant, another U.S. giant monopoly Kellogg announced it would be closing its 89-year-old London cereal plant by the end of 2014, throwing over 500 workers onto the streets. Workers at Kellogg produce 27 variety of cereals. Kellogg Co. had sales of $14.2 billion in 2012, making it the world’s leading cereal company as well as the second largest producer of cookies, crackers and savory snacks.
According to news reports, Ontario has shed more than 33,000 jobs in the factory sector in the past 12 months all in the name of global competition.
For your information, Berkshire Hathaway the mega US monopoly conglomerate who struck the heart of the Leamington region with its “business decision” to close a 104-year-old food processing plant located on Canadian soil recorded a revenue of US$162,463 billion in 2012. Its net income was recorded at US$14,824 billion in the same year while its total assets were established at US$427,452 billion in 2012.
Its business partner involved in the purchasing of the Heinz Co., 3G Capital is a global investment firm and prior to completing the acquisition of H.J. Heinz Co. in June 2013, it had completed the acquisition of Burger King in October 2010.
While this is our economy and it is the Canadian workers and farmers who produce all the wealth and grow the food for our consumption, we have no say in the decisions affecting the economy, the well-being of the people and the social and natural environments.
The Sunday e-mail unequivocally condems Liberal Premier Wynne and the Federal Conservative government for permitting monopoly right to trample all over public right by protecting their “business decisions” which destroy the national economy, thus greatly disturbing the general interest of the society. The dictatorship of the monopolies over the affairs of the society and compliant Canadian and Ontario governments is a problem that must be confronted and overcome. We want governments that will use their authority to uphold and enforce arrangements with monopolies based on mutual benefit and recognition of the rights of workers, farmers, suppliers and their communities.
If this cannot be agreed to by the monopolies, then Canada should be closed to them. The Canadian workers are more than capable of building a flourishing economy which is self-reliant and provides for the ever increasing needs of the people.
The questions which are being raised all over the country such as Who’s economy? Our economy! and Who decides? We decide! must be given meaning and implemented in real life. Why not give ourselves forums in 2014 whereby these very important questions can be addressed and the Workers’ Opposition further developed.