Economy Thread

[K85]

Fuck...... and there goes more house value here....




Kellogg's delivered a major body blow for London Tuesday morning, telling angry workers that it is shutting down its London facility.

The high-tech cereal plant in London employed more than 500 workers. Workers were summoned to a meeting this morning at the Four Points Sheraton in London.

"Kellogg's has been my whole life," a despondent Mike Coulter said after the meeting. Coulter worked at the London plant for 30 years.

"If anybody is hiring any cereal makers, here we are," Coulter said.

Fellow worker Bruce Monteith said Kellogg employees sensed bad news was coming.

"They don't call a meeting like this for anything good. They are not handing out Christmas bonuses or turkeys."

Lambton-Kent-Middlesex MPP Monte McNaughton called the Kellogg plant closure a sad day.

"It is a tragedy for London and Southwestern Ontario," said McNaughton who has regularly decried the lack of a plan by the provincial government for Ontario's manufacturing sector.

In its latest quarterly report, the Kellogg revealed it was launching Project K and setting aside more than $1 billion to increase efficiency. The program was to include plant consolidations.

The Kellogg move falls on the heels of the announcement in November that Heinz was shutting its Leamington plant, it's second largest in the world, with the lost of 740 jobs.

Kellogg announced in November that it was cutting its London workforce by 20% - 110 full-time unionized workers and 11 managers were shown the door.

Kellogg makes about 27 cereals in London. Among its best known products are Corn Flakes, Frosted Flakes, Bran Buds, All Bran, Bran Flakes and Raisin Bran.

Warning flags for the London plant were raised by the union in 2011 when Kellogg Canada invested $43 million to upgrade its Belleville plant.

At the time it was feared the upgrades in Belleville could bring that plant in competition with the one in London.

Ontario taxpayers put $4.5 million toward the Belleville expansion.

McNaughton said the Ontario government shouldn't be putting money into one plant at the expense of another community.

"It is picking winners and losers. It is the wrong approach," he said.

What they said.



“We are taking action to ensure our manufacturing network is operating the right number of plants and production lines – in the right locations – to better meet current and future production needs and the evolving needs of our customers.”

John Bryant – CEO Kellogg's



“We are in a competitive world and we are seeing things unfold. We have a lot off of losses in Ward 4. It's part of the economic times. If the City of London can do anything to help we will put this on the front burner. It's time for new ideas and new laws to create employment.”

Ward 4 councilor Stephen Orser



“It's time to start looking and move on, I guess. I'm 54 in April. Where am I going to find work, I'm hoping

they will do the right thing and bridge to retirement and help us out.”

Jamie Kelly, 26 years with Kellogg's



“We were told a month ago there would some layoffs and cutbacks but everything would be okay. Now they tell us right before Christmas.

Why don't they cut those people at the top that are sitting on their bonuses. Where are we going to go? There's no jobs around here”

Cindy Shilder, a single mom with seven years at Kellogg's



“We knew sales were soft and something was going to happen.

There will be a trickle-down effect on the whole area. There's seem to be a mandate to bring a lot of business back to the US.”

- Bruce Monteith, 27 years with Kellogg's



“A lot of it is corporate greed. You read the Kellogg's profit statements and they are making more money than they ever did, but it's never good enough and it's usually at the expense of the worker.

Steve Addison – former Sterling Trucks worker who went to Kellogg four years ago.





--- --- ---

Kellogg's released a statement shortly after 10 am. Here it is in full:
Kellogg Company Announces Changes to Global Supply Chain Network

Dec 10, 2013

Kellogg Company today announced several changes to optimize its global manufacturing network as part of the company’s recently announced Project K four-year efficiency and effectiveness program. Project K will unlock cost savings that Kellogg will invest in its strategy and grow its business. Through Project K, Kellogg is strengthening its existing business in core markets, increasing growth in developing and emerging markets, and driving increased value-added innovation.

Supply Chain infrastructure changes announced today include:

Closure of the Snacks plant in Charmhaven, Australia
Expansion of the Rayong, Thailand cereal and snacks plant, and
Closure of the ready-to-eat cereal plant in London, Ontario, Canada.

“As with any project of this scope and one that impacts people, these are difficult decisions,” said John Bryant, President and CEO, Kellogg Company. “We are very mindful of the impact these changes will have – particularly to our employees. As our employees and others would expect from Kellogg, we will help those who are impacted through their transitions.”

The London plant is expected to close by the end of 2014 and the Charmhaven plant is expected to close by late 2014. The Rayong expansion will be fully operational by early 2015.

“We have a compelling business need to better align our assets with marketplace trends and customer requirements,” said Bryant. “To that end, we are taking action to ensure our manufacturing network is operating the right number of plants and production lines – in the right locations – to better meet current and future production needs and the evolving needs of our customers.”

[MolsonExport]

terrible, terrible, terrible news. Poor London.

I made a point of always buying Kellogg's products, on account of the local economy. No more.

[north 42]

Our whole Southwestern Ontario region is just getting pummelled with all these closings. Before you know it, we'll be just as bad as some of the Rust Belt states, something I thought would never really happen here in Canada!

[manny_santos]

Some of the armchair economists on the Free Press website are hilarious. People claiming that London today is comparable to Detroit, that Heinz is pulling out of Canada entirely (even though they are expanding production at the St. Marys plant), or are baffled at how there are $400,000 homes being built in London. It seems to be news to some people that London has some successful economic sectors, both in the public and private sectors. But the Detroit comparisons really bother me. While London's economy has indeed taken a hit and is worse off than a large part of Ontario, it's almost offensive to compare London to a city that has a murder rate that far exceeds many U.S. cities, has block after block of abandoned houses and vacant properties, and is bankrupt.

[Pimpmasterdac]

Perfect storm of things are leading to decimation of existing manufacturing in SWO. High Canadian dollar, high union wages, idiotic energy/hydro policies, fierce competition of from other jurisdictions.

Quite unfortunate though, quite a big blow with Kelloggs closing. Final nail in London would be if (or perhaps even when) Labatts ceases operations in London.

[K85]

I say this politely... (sips tea, clears throat) THE PEOPLE THAT POST ON THE LFP SITE ARE FUCKING RETARDED


They have NO sense of reality on ANY story they comment on.

thank you for your time.

[haljackey]

Only speculation, but I have a few friends that work at General Dynamics... There's some mumblings that things there could take a turn for the worst. You know things are bad when defense contractors make cut backs or close plants. That would be a disastrous blow to the city as everything else would pale in comparison.

It's sad news for London, and something we're pretty used to now unfortunately. Still, I would never compare it to Detroit... That's pretty much a 3rd world city in a 1st world country.
-Disregard LFP comments and carry on.

With all these closings and "right to work legislation" proposed, I don't take my white collar job for granted.

[manny_santos]

Originally Posted by K85

I say this politely... (sips tea, clears throat) THE PEOPLE THAT POST ON THE LFP SITE ARE FUCKING RETARDED


They have NO sense of reality on ANY story they comment on.

thank you for your time.

Slightly off topic, but have you ever noticed how people in certain socio-economic groups in a given city think that the entire city is like them? Over and over again, whenever there's job losses the blue collar people talk about how London is a "blue collar city" and how "most Londoners" are blue collar workers. Some Londoners would refer to the city as "white collar", especially those who work in insurance or finance. When I went to Western, students from out of town would refer to London as being "mostly students" and that there's "nobody" in the city during the summer. I've seen the same thing with other cities with universities, where students claim the "majority" of that city's population are students. I had to explain to a friend of mine in Kingston that she was wrong about "over half" of the city's 120,000 population being students.

[MrSlippery519]

Originally Posted by haljackey

Only speculation, but I have a few friends that work at General Dynamics... There's some mumblings that things there could take a turn for the worst. You know things are bad when defense contractors make cut backs or close plants. That would be a disastrous blow to the city as everything else would pale in comparison.

Well I can tell you they cannot pay their bills on time (with us at least). We sell them a few different things (wire and cable, etc) and they have been extremely slow paying the last 3-4 months.

[MolsonExport]

Kellogg’s Ontario plant closing a casualty of changing tastes

guess everyone lines up at Rim Whoreton's for their daily dose of salt-on-a-salty-biscuit.

[Stevo26]

Originally Posted by haljackey

Only speculation, but I have a few friends that work at General Dynamics... There's some mumblings that things there could take a turn for the worst. You know things are bad when defense contractors make cut backs or close plants. That would be a disastrous blow to the city as everything else would pale in comparison.

It's sad news for London, and something we're pretty used to now unfortunately. Still, I would never compare it to Detroit... That's pretty much a 3rd world city in a 1st world country.
-Disregard LFP comments and carry on.

With all these closings and "right to work legislation" proposed, I don't take my white collar job for granted.

'Right-to-Work' legislation will only make things worse, not better. It's based on the premise that if you take money from the poor and give to the rich, the economy will improve and the lot of the workers will improve. Seems to me they tried that back in the 1980s with 'trickle-down' economics. Well, we all saw how well that worked, didn't we?

What we are seeing now is the culmination of all those jobs that got exported to low-wage countries like China and India. As a result, the US is undergoing a period of retrenchment and repatriating jobs in an effort to prevent their economy from imploding. Because so much of the Canadian economy relies on branch plants, we're going to be in a heap of trouble soon as more plants are closed and sent to the US. The only thing keeping us going really, is the tar sands.

The lower wages and lax labour standards seen in parts of the US and being a driver of the jobs exodus is only part of the story.

We just had to buy cheap shit from China, and now we're paying the price. There's an old adage that says something to the effect that the cheap man usually ends up paying twice over what he sought to save because the cheap stuff he buys doesn't last.

[haljackey]

I know what right to work legislation is, and I'm generally against it.

Still, it's sad to see things the way they are. Companies want to freeze wages and cut jobs. Unions want raises and more benefits. If no compromise, the employer may just close up shop and move elsewhere... We've seen this everywhere, including in London.

Workers who are used to making $30 an hour plus benefits are now unemployed and fighting to get $10.50 jobs with no benefits. Few decent jobs for new workers too. Generation screwed?


I remember reading that of all of this year's MBA graduates from Ivey, 0 stayed in London. That's a horrible, but sobering fact.

What's London known for these days?

[Stevo26]

Originally Posted by haljackey

I know what right to work legislation is, and I'm generally against it.

Still, it's sad to see things the way they are. Companies want to freeze wages and cut jobs. Unions want raises and more benefits. If no compromise, the employer may just close up shop and move elsewhere... We've seen this everywhere, including in London.

Workers who are used to making $30 an hour plus benefits are now unemployed and fighting to get $10.50 jobs with no benefits. Few decent jobs for new workers too. Generation screwed?


I remember reading that of all of this year's MBA graduates from Ivey, 0 stayed in London. That's a horrible, but sobering fact.

What's London known for these days?

'Generation Screwed', indeed. Speaking of MBA grads, I was dating a woman who recently completed her MBA. One of the research papers she wrote during her MBA course was an analysis of London's future growth prospects over the next 20 years.

The results of her analysis were pretty sobering. In a nutshell, she discovered that London will not have any significant growth for the next 20 years and beyond, and we're likely to see a pattern of increasing stagnation. In other words, London is going to become a retirement village and not much else. Demographic trends (an aging population and young people moving elsewhere to find work) are the two main culprits that she identified as causative factors for the emerging trends.

I figure I'll be ready to retire in about ten years, so these demographic trends may not mean much to me in the final analysis. But since they seem to have the potential to affect the quality of life I can expect in my retirement years, I might be better off living elsewhere.

[north 42]

I hope your city council and chamber of commerce take note of this article in the LFP, because it sounds like they are at the opposite end of the spectrum! If Windsor can do it, so can London, you just need the leadership.

http://www.lfpress.com/2014/01/15/wi...xes-are-frozen

[haljackey]

Well we will see what happens during the election. It could be a good chance for London to elect good leadership but we could get the same crap we have now.

In other economic news, I heard a stat on CTV news last night that roughly half of the employable population (18-65) is currently employed in London CMA. That goes to show you that a lot of people have given up looking for work, making our umemployment rate look a lot better than it actually is.

There were layoffs where I work this week... Hit me pretty hard to see people I work with every day get the pink slip.

[Wharn]

Originally Posted by haljackey

I remember reading that of all of this year's MBA graduates from Ivey, 0 stayed in London. That's a horrible, but sobering fact.

What's London known for these days?

I tried searching for a job in London as well, but the city just does not have agglomeration economies on its side. That stagnation thesis proposed by Stevo's date sounds like what might happen, even though I really, really don't want that to be the case. Toronto collects a lot of the white collar talent, which in turn draws more white collar talent away from other centers. Personally I would have preferred to live in London, and believe me I tried, but the lack of private sector positions here means that I may have to go back to the Imperial Capital...

As far as unions go, I have to say they are doing a wonderful job keeping the workers at GM in Oshawa employed and the ones at Toyota in Woodstock unemployed. Wait a second...

[Snark]

Originally Posted by north 42

I hope your city council and chamber of commerce take note of this article in the LFP, because it sounds like they are at the opposite end of the spectrum! If Windsor can do it, so can London, you just need the leadership.

A politician defending his actions? Absolutely I'm going to believe everything he says and the spin that he puts on it!

The article strongly implies that one need only to have the balls to pick up the magic wand and wave it to freeze or reduce revenues and continue with business as usual. It is incorrect as well as disingenuous: much of the infrastructure work talked about in the article is/was not paid with property tax revenue. To say the the mayor (which is once again wrong, it's council directing staff) increased infrastructure work while freezing taxes is blatantly misleading. It does however follow Sun Media's conservative political mantra that all government is greedy/inefficient/lazy/evil and that shining white knight heroes can and do save the day. Remember Sun's Media's earlier white knight mayor of another Ontario city who was going to get his city "off of the gravy train"? I'm not saying that Windsor's mayor is like that guy, but the editorial bent of the publisher remains the same.

The reality is that in order to do what Windsor has done is one of two things:

1) Reduce service or increase risk. Some efficiencies can be found to save costs, but eventually those run out and still the cost of running the city continues to increase due to inflation. If revenues remain static, the only actions remaining at that point is to reduce service levels for soft services and/or increase risk of failure of hard services. If the community is fine with reduced services for lower taxes, then that's okay. I would suggest however that the community is rarely, if ever, consulted prior to such a decision being made by their local council.

2) Contract out the jobs of city staff to private companies, and eliminate those positions internally. There are times where contracting out makes sense for a municipality, such as activities where there is fixed duration (such as a project) or where the workload fluctuates a great deal. In such cases it doesn't make sense to hire full-time internal staff for such things.

Simply replacing justifiable internal F.T.E.'s with a private company filling those positions however results in many cases with those municipal jobs converting to private low paying, no benefits McJobs that don't support a middle class household. Now the municipality is contributing to a lower standard of living in the community. Additionally, instead of cycling tax revenue back into the local economy through internal staff salaries, profit is instead skimmed off by the contract company owners and that money bleeds out of the local economy and goes elsewhere - quite possibly right out of the country. It supports the notion that everyone should be working for less pay so that I can pay lower taxes. Why do I need lower taxes? Because I don't get paid enough.....

[manny_santos]

http://london.ctvnews.ca/video?clipId=277205

London still doesn't allow food trucks in public places?!

The bizarre thing about the proposed London bylaw is the prohibition of putting them in residential areas. In at least Kingston, their bylaw actually encourages putting them in residential areas to give local residents new options for eating. Sure enough, they show up in front of parks on residential streets, and locals love them. Funny how London City Council still is stuck in the dark ages of red tape.

I ask Mr. Fontana and City Council: Do you have the courage to make London an attractive place to start a small business? You promised 10,000 jobs...this is how you create jobs, not trying to win manufacturers who aren't interested in Canada anymore nor trying to cater to big chain restaurants that whine about competition.

[MolsonExport]

The 10,000 jobs promised were actually job losses, evidently, and if so, the mayor is making good on his promise. Somebody in the media forgot to insert the minus sign. Maybe the new city gondola ride can put up correction notices.

[MolsonExport]

Kellogg Company today announced several changes to optimize its global manufacturing network

gotta love the bullshit corporatist positive spin on shutting factories. MBA-speak strikes again.

Project K four-year efficiency and effectiveness program.

Like the Soviet Onion, Kellogg's is on a 4 (yes, I know it was 5) year plan.

Project K. Since when is Crap spelled with K?