Schneiders - After 125 years, plant closes

Not sure who pays attention, but the aging meat packing plant in Kitchener was closed down slightly ahead of schedule last thursday. The company continues with a modern, automated factory which has replaced roughly 1500 workers.

About 30 employees remained as the final stack of Schneider's signature sliced bologna made it's way down the line.

http://youtu.be/yRH5WLhd1nw

I found that tribute video to be particularly touching.

It saddens me that even our best brands - the companies that best reflect Canadians' dedication to better work, better quality, better employment standards, better teamwork - cannot continue in a manner that upholds those values.

To remain competitive, they must eliminate the human element.

I cried when the last package of Garlic Bologna was shipped out, use to love that stuff, haven't seen it in years!

One of the founders of my dad's first hunt club is a very senior Schneiders' manager. He started work there as a young man, a beginning butcher and worked his way up the ladder for over 50 years.

He'd always bring a never-ending supply of HotRods and other Schneiders' treats each hunting season. Definitely a large part of the reason i developed an appreciation for spicy foods.

Pretty sure Otto is still employed, but i can't imagine he's having much fun supervising machines.

My brother in-law was just laid off at Schneider's and was a Supervisor for the last eight years. He is 62 years old and out of a job and would like to keep on working until he is 65.

This is a real shame. I used to live just down the street from the Schneider's plant and many of my neighbours at the time worked there.

This is sad,indeed,but,when you add up all the extra taxes and premiums for everything under the sun that the province has foisted on them,it's not rocket science to see what happens. Businesses are in business to make a profit and the bigger the profit,the better. They're not in business to be the cash cow of left wing government social programs and mis-spent revenue. If they can't make a profit after they've paid their overhead,they're outta here. It's just that simple.

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Originally Posted by trimmer21

This is sad,indeed,but,when you add up all the extra taxes and premiums for everything under the sun that the province has foisted on them,it's not rocket science to see what happens. Businesses are in business to make a profit and the bigger the profit,the better. They're not in business to be the cash cow of left wing government social programs and mis-spent revenue. If they can't make a profit after they've paid their overhead,they're outta here. It's just that simple.

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Pretty sure Maple Leaf Foods (which purchased Schneiders a few years ago) operates and produces out of Ontario and Manitoba.

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Originally Posted by Oddmott

Pretty sure Maple Leaf Foods (which purchased Schneiders a few years ago) operates and produces out of Ontario and Manitoba.

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Yes, the film said they are making product in Hamilton

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Originally Posted by C.A. in TO

Yes, the film said they are making product in Hamilton

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It probably makes sense to move to a new facility rather than have to constantly fix and upgrade a 125 year old building.

This is a little dated (from late 2012), is posted just to illustrate that just because A) bought B) it doesn't mean that the bottom line isn't still the bottom line and that Trimmer is incorrect.

Source Bloomberg

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The company said earnings from its prepared meat business grew, helped by price increases and the closure of two facilities last year in an effort to simplify its meat processing operations.

Some of these increases were offset by lower revenues from pork processing, which was hurt by unfavourable market conditions in North America and lower margins on exports to Japan and Korea.

Maple Leaf is Canada's biggest food processor, making and selling such well-known store brands as Maple Leaf, Burns and Schneiders hotdogs, Dempster's bread, Olivieri pasta, as well as Shopsy's deli meats and Mitchell's Gourmet foods.

Last year, Maple Leaf announced a plan to cut 1,550 jobs by closing plants in four provinces and streamlining distribution, part of a three-year, $560-million restructuring plan expected to boost competitivenessand profitability.
The company closed two bakeries in the Greater Toronto Area recently as it works to consolidate production at its new bakery in nearby Hamilton, Ont.

In February, it announced it was closing a chicken processing plant in Ayr, Ont., to the detriment of about 100 jobs, as part of a plan to consolidate the company's poultry operations at its Brantford and Mississauga, Ont., plants.

McCain said the restructuring is going as planned and is contributing to the company's margins.

"I think our shareholders, the board and management are all aligned in support of the plans that we are executing," said McCain.

Maple Leaf has 21,000 employees at its operations across Canada and in the United States, Europe and Asia.

So closures in Ontario, (lets call it 10% of their employees/operations) in order to boost competiveness and profit margins by reducing overhead/expenses (streamline)..I don't know like Hydro and taxes maybe? Im guessing X plants use less/cost less than X+4???

21,000 employees globally. I didn't see any closures mentioned in the US, Europe or Asia.

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Schneider's official line the entire time was that the Ontario plants were too old to upgrade efficiently/affordably.

All their other plants are modern, and the ones that haven't already been automated, are slated to be.

MLF has INCREASED canadian-based production by eliminating people and moving towards automation. Automation requires insane amounts of electricity. Obviously cost of electricity is NOT a factor in this story.

Not sure how come to that conclusion M.
Further if its simply a case of automation and modernization (which clearly there is, not suggesting otherwise) . Odd don't you think no plant closures/automation/layoffs abroad? And in fact they modernized plants in Saskatoon and Winnepeg. Not sure how that escaped you, and that's what I was mainly pointing out.

/edit add
lest there be any confusion. Not saying your wrong, not saying Trimmer is.
The bottom line is they needed to streamline in order to be more competitive, increase margins.
Its getting really expensive to run things here in Ont.

just one more thought to head off, avoid anything
Would it be fair to wonder, think, question, factor in.
If the plan is to streamline/modernize reduce cost, boost margins. And modern plants are hydro intensive

Would you not have to look at the price of Hydro here, (as well as tax treatment/land taxes, min wages, deductions say like ORPP or WSIB etc) and where its (Hydro) projected to go? I sure as heck would. So would it be fair to wonder, suggest, ask, question........ if your both right?

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Originally Posted by JBen

Would you not have to look at the price of Hydro here, (as well as tax treatment/land taxes, min wages, deductions say like ORPP or WSIB etc) and where its (Hydro) projected to go? I sure as heck would. So would it be fair to wonder, suggest, ask, question........ if your both right?

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And that's why i keep pointing out that this has absolutely nothing to do with taxes or hydro costs.

MLF has INTENSIFIED investment in growth of Ontario plants. They're not hedging their bets at all.
http://www.canadiancattlemen.ca/dail...ats-business-2 <--- a good write up detailing exactly what plants closed, which expanded, jobs lost, jobs hoped to be gained, etc.

Nothing you find in any write up anywhere will even remotely mention cost of hydro. However, several other causes of their organizational shift ARE specifically mentioned in almost every writeup or company quote.

Yeah I know M, but by the same token the decisions what/where to close, what/where to modernize. You factor all those things in, including the cost of hydro. Do you think any company be it Catepillar or any of the other plants that have mothballed plants have said specifically "hydro cost"?

If you have 8 aging plants and can save cost by having 1 new modern plant (itself more hydro intensive than any one of the 8, but less hydro than the 8 combined) and you know Hydro is soaring and going to continue to....plus other factors..Would you call that a good business decision? What would you think of doing. Pretty much exactly what MLF is doing? Or would you modernize 4 of the 8, 6 of the 8?

Do also note there are other MLF closures not included in your list (if Im not mistaken).
Bottom Line MLF is restructuring, reducing overhead."and for the love of god don't say rising cost have nothing to do with it :)

Your arguments sometimes carry so little water :)
Tell you what M, of the dozens of plants that have mothballed in recent years. Rather than me finding one mention of rising hydro cost cited by MLF.

Why don't you find one specific reference to Hydro from any of the dozens...and then come and argue it has nothing to do with it. They don't say that. Its called an operating expense.

Rgeardless and pardon the pun :)
No matter how its sliced (or diced) rising cost are eating into profits and companies are
what exactly?

JB, why don't you also say it is because they have a union , and they would save the plant with a big pay cut, you always end up there anyway.

Why are you a) bringing that in and b) trolling? C) putting words in my mouth.
Problems G?
who knows that "may" be a factor as well.

Bottom line. MLFs reasons are to save a hoped for 560 million in cost, in plain English reduce expenses/boost profits.. That includes many things.

So at the end of the day.
if 1 new modern robotic plant (less unionized people, less management, less taxes, and less overhead, less maintenance (less unionized maintenance people required) less floor space (land taxes) more efficient robots (less hydro) saves 560mm over 8 plants....

is Trimmer wrong?

Simply... Yes, trimmer is wrong.

He didn't read any articles or watch the vid and just assumed a) that MLF/Schneider's have closed and left ON and b) he assumes the cause are factors not once mentioned in this scenario.

MLF is not leaving ON, it's EXPANDING and INCREASING its operations, and doing so in a manner that will be even more energy intensive than before.

Trimmer couldn't have been more wrong.

On "leaving" Ont I quite agree with you, hence why I said you could both be right.

Anytime any company cites restructuring in order to reduce operating expenses.
I can't be bothered to go digging for the numbers although Im sure they are out there.
MLF is spending a boatload of money... in order to save… expenses.close cost gaps with the US boost profits.. For manufacturing industries.

Big plants = lots of Hydro. Makes perfect sense with soaring hydro to junk the old refrigerator and get energy efficient ones.

Lots of plants= lots little guys, middle guys, top dogs. Some unionized/some not
Lots in taxes and deductions (wsib, etc, etc)
Expensive leases (floorspace) and why are leases getting expensive? And land taxes?
Im assuming transportation cost is something key to MLF hence the centralized distribution centre. And why are they getting expensive?
And more Im sure.

Just one more thought on this, promise.. in an attempt to illustrate just why Trimmer could be/likely is right, in his own way. But do agree with you (although most of cost reductions are occurring in Ont)

MLF, raw materials (Wheat for the bakeries, meats).
Why are they going up in price, skyrocketing? See the recent thread about the price of produce and meat (they specifically mention pork and profits there dwindling).
Why are farmers struggling? Land taxes, hydro their cost to do business, and Johhny shopping at WT instead...rebates done away with.
and on
and on.