General Mills Plans To Close Midland And New Albany Plants, Cut Jobs

(RTTNews) - General Mills Inc. (GIS) said that it plans to reduce its refrigerated dough capacity and exit its Midland, Ontario, Canada and New Albany, Indiana facilities, which support its U.S. Retail, International and Convenience Stores and Foodservice supply chains.

The company noted that it is currently pursuing several multi-year restructuring initiatives designed to increase efficiency and focus on key growth strategies. Its previously announced Project Century is a review of its North American manufacturing and distribution network to streamline operations and identify potential capacity reductions, with a goal of delivering annual savings of $100 million by the end of fiscal 2017.

The Midland action will affect approximately 100 positions and it expect to record restructuring charges of approximately $21 million, of which approximately $12 will be cash. These restructuring charges include approximately $10 million of severance expense, $8 million of asset write-offs, and $3 million of other restructuring costs. It expects to record approximately $12 million of the total restructuring charges in the third quarter of fiscal 2015. It anticipates this action will be completed by the end of fiscal 2018.

In addition, the company said it notified the union member employees and union representatives at its New Albany facility of its tentative decision, pending negotiations and consultation with the union, to close this manufacturing facility. If implemented, this action could affect approximately 400 positions and it expects to incur restructuring charges of approximately $88 million of which approximately $44 million will be cash.

These restructuring charges include approximately $36 million of severance expense, $36 million of asset write-offs, and $16 million of other restructuring costs.

The company expects to record approximately $55 million of the total restructuring charges in fiscal 2015. It anticipates this action will be completed by the end of fiscal 2018.