The surprise decision by Kraft Foods Group to close its nearly century-old east Woburn plant is drawing mixed reactions among city leaders, who say they are concerned about the pending loss of jobs but cheered by the chance to bring new activity to the site.
The Illinois-based food-and-beverage giant announced recently that it will close the Hill Street complex by the end of 2016, a move that will result in the loss of jobs for the plant’s nearly 200 employees.
“We are very sympathetic to the employees who will be losing their jobs,” said Mayor Scott D. Galvin. “In the period of the transition, we have to be as sensitive to that as we can. I’m hoping that Kraft Foods will work with their employees on a job-placement and retraining-assistance program.”
But Galvin said the plant closing is “a win for the city” because of the potential economic development it could bring to the site, adjacent to Interstate 93. The property encompasses about 110 acres in Woburn, Stoneham, and Winchester, with the plant located on the 57-acre Woburn section.
“We have a great opportunity to develop a piece of property,” he said, “to work with Kraft and potential buyers on a plan that will capitalize on the fantastic location they have — 10 minutes from Boston and easy access on to I-93. It will be a showcase development.”
Envisioning a commercial redevelopment of the site, Galvin said the reuse could yield the city significantly more in annual tax revenue than the $340,000 it currently generates. The city will take a close look at potential future uses of the site as part of its current master plan update.
“It wasn’t on our radar screen, but now it is,” Galvin said. “We are very excited about it.”
Joyce Hodel, a spokeswoman for Kraft, said, “We haven’t yet decided what plans we have for the property.”
But she noted that the company had contacted local officials about the closing and “we will certainly be keeping close to them in the coming months and years.”
Ward 5 Alderwoman Darlene Mercer-Bruen, in whose ward the plant is located, said she is “sad for the people who will lose their jobs,” and hopeful the city and the local business community “all pitch in and help the people employed there.”
But she, too, sees a possible upside to the closing.
“For every door that closes, another will open,” Mercer-Bruen said. “This is a huge parcel of property on premium land that abuts the highway so I’m hopeful the city in conjunction with Kraft and whoever purchases the property can attract someone who wants to build a fabulous development there.”
Founded in 1919 as Atlantic Gelatin, the plant was acquired by General Foods by 1930. The Phillip Morris Companies acquired General Foods in 1985 and Kraft in 1988.
The following year, it combined the two into Kraft General Foods. The company, now Kraft Foods Group, owns brands that include Jell-O, Kool-Aid, Maxwell House, and Oscar Mayer.
Still referred to by some locals by its nickname, “the Gelly,” the 240,000-square-foot Woburn plant today houses two businesses: one produces gelatin for food and pharmaceutical products, and the other flavorings and ingredients for foods and beverages. Kraft’s only other Massachusetts facility is a small sales office in Mansfield.
Hodel said the company expects to shut down the gelatin production at the plant by the second quarter of 2015, and the manufacture of flavorings and other ingredients by the end of 2016.
“We are always reviewing our manufacturing network and looking for ways to improve the efficiency and effectiveness of our operations,” Steve Yucknut, vice president of Integrated Supply Chain for Kraft’s Meals & Desserts business unit, said in a statement. “Closing the Woburn facility is difficult for us. But in looking at our operations holistically, we don’t think that long-term investments in this facility make strategic sense for our network. We know external vendors already have the upgraded technology and optimized logistics to drive significant cost efficiencies.”
Yucknut added: “This is not a reflection on our employees in Woburn. This is a business decision that has nothing to do with their performance, which has been excellent. We are committed to treating our employees with respect and dignity and will be working with them through this transition.”
Hodel said the plant’s salaried employees will be offered a separation package that includes severance pay, financial assistance to help pay for medical insurance, and outplacement assistance.
She said Kraft will discuss a severance package for the hourly workers with the union representing them, Local 1295 of the Office & Professional Employees International Union.
Ann C. Dufresne, spokeswoman for the state’s Executive Office of Labor and Workforce Development, said the agency has a team that responds to announced layoffs either by working with a company to avert the job losses or to help displaced employees obtain eligible benefits or to seek new employment.
Kraft’s decision to close the plant comes despite millions that the company has invested in equipment and capital upgrades to reduce odors from the plant.
that have prompted persistent complaints from neighbors.
Mercer-Bruen said the odor problem has lessened, crediting the company with making “great efforts to try and stop it.”
Paul J. Meaney, a board member and former director of the Woburn Business Association, said he sees the plant closing as a loss for the city, citing in particular the loss of manufacturing jobs.
“In this day and age, it’s a big thing to have a steady job and not everyone is an engineer, not everyone is a lawyer or a doctor,” he said.
“There are still men and women that work in a plant with their hands, that make good wages and produce a product for all of us to consume. . . . This is a manufacturer we are going to lose that has serviced Woburn well over the years.”John Laidler can be reached at firstname.lastname@example.org.