Menu to Cut Workforce up to 15 Percent
Canadian Press
Wednesday, October 10, 2007
TORONTO — The Canadian Press reported this morning that Menu Foods Income Fund, the owner of Menu Food Midwest in Emporia, is cutting its workforce by 10 percent to 15 percent and raising the estimated costs of its recall of tainted pet food by $10 million to a total of $55 million.
It was not immediately known how the cuts would affect the Emporia plant.
The upward adjustment in recall expenses “arises principally because the volume of customer returns and associated costs are now estimated to be greater than originally anticipated,” Menu Foods said.
It added that its CEO has reduced his compensation by 22 per cent, “with the objective of ‘sharing the pain.’” Paul Henderson was paid a base salary of $460,000 last year, along with a $380,000 bonus, $23,600 in long-term incentives, $10,300 in miscellaneous compensation, and 134,500 trust units.
Other senior executives and board members will take pay cuts of 17 to 20 percent.
Menu Foods also said it has completed the sale of its plant in North Sioux City, S.D., which provided 16 percent of last year’s production. The proceeds of the sale to the Mars company will be used to repay secured lenders.
In addition to the job cuts in the remaining workforce, the restructuring charges involve write-offs of inventory, a customer relationship, receivables and idle assets.
Menu Foods, the largest maker of wet cat and dog food in North America, fell victim in mid-March to a massive recall after a number of pets fell ill and some died of kidney failure after eating its products.
The problem was traced to wheat gluten contaminated with melamine by a Chinese supplier.
Since then, Menu Foods has suffered an exodus of customers for its name-brand and private-label products, notably Procter & Gamble, which was said to account for more than one-fifth of Menu’s sales. In total, the trust says it has lost customers representing 37 percent of last year’s volume.
“The sale of the North Sioux City facility, the previously announced settlement of certain contractual obligations and the sale of certain other assets, which together generated $26.3 million, are the initial steps in ‘right-sizing’ the fund’s business,” Menu Foods said Wednesday.
Reported on The Canadian Press Web site: http://canadianpress.google.com/
slipandslide (anonymous) says...
ouch, thats going to hurt
October 10, 2007 at 4:47 p.m. ( permalink | suggest removal )
create (anonymous) says...
Oh gosh, this gives me such a sick feeling. Poor, poor Emporia and her people. I know, I know, Menu should have checked what they bought from the agent; we've been through all this before. I'm still blaming the Chinese for tainting the gluten to begin with.
October 10, 2007 at 5:22 p.m. ( permalink | suggest removal )
justthinkin (anonymous) says...
I'd chose to cut my $874,000+ per year by 22% & let 15% take a 100% cut in pay too.......It's a win / lose situation. Execs win, employees lose. After all, next year, those execs will probably go right back to & maybe way past the 22% cut taken to save their jobs. Trouble is, those that take a 100% cut in pay have NO CHOICE..... Wonder how many of the execs lost THEIR pets to make a profit?
October 10, 2007 at 6:52 p.m. ( permalink | suggest removal )
wunderin (anonymous) says...
Why is Menu laying off full time skilled workers to save money when they still have over 100 temporary workers on the payroll? An ethical company would get rid of the temporary employees first and then they might not have to lay off the loyal people who have stayed through the recall. It's also interesting that the article states they don't know how the Emporia plant will be effected when they had meetings today outlining how 20% of the employees will be gone by the end of the month, merit pay will be done away with, lead pay earned since the plant opened is no longer paid (although the employees are expected to do the same job) and the 401k match will be reduced to 1%. However, they generously told their full time employees that they could join the temp pool and earn half their pay with no benefits. What great guys these Canadians are.
October 10, 2007 at 7:49 p.m. ( permalink | suggest removal )
MelissaE (anonymous) says...
Menu is right up there with the Chinese products--except Menu's "products" have now become their employees.
Good job, Menu.
M
October 10, 2007 at 7:55 p.m. ( permalink | suggest removal )
netloafer (anonymous) says...
wunderin
I know someone who was a temp at Menu. He said all the temps were laid off some time ago, during the early stages of the recall. Do you have any updated information on that? Are they still using temps?
This is really an unfortunate circumstance for the workers at Menu. Hopefully this is not just the first cut before a complete shutdown.
October 11, 2007 at 8:03 a.m. ( permalink | suggest removal )
outsidethebox (anonymous) says...
Most places that use temps, don't offer them benefits. Not sure if this is the case with Menu. It is cheaper for the company to have temps then regular staff. This was an issue with UPS several years ago, when they only wanted to hire part-time or temps so the cost of benefits is zero or much lower than having full time employees.
October 11, 2007 at 9:26 a.m. ( permalink | suggest removal )