NEW ALBANY — General Mills announced Thursday morning a preliminary decision to close its New Albany plant in 18 months, pending a negotiation with union officials.
City officials said they were told the closure is due to “excess capacity in the supply chain.”
The New Albany plant manufactures refrigerated baked goods, and has been operated by General Mills since 1959.
The closure would affect about 400 employees if it becomes final. General Mills made the announcement via a press release issued Thursday morning. The release stated the decision “is subject to negotiation with union officials.”
In a telephone interview, General Mills spokeswoman Bridget Christenson emphasized the closure is a preliminary decision, but wouldn’t provide additional details on what the union negotiation would entail.
“We are obligated to meet with the union on this decision,” she said. “I can’t go into more detail.”
As to why an announcement about a 2016 closure was made 18 months prior to the expected shutdown date, Christenson said “there are a lot of things that need to happen through this transition period.”
A message has been left with the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union seeking comment for this story.
In a statement released Thursday, New Albany Mayor Jeff Gahan labeled the announcement “a very sad day, and very difficult for the employees and their families.”
According to the mayor’s office, the closure of the New Albany facility would mark the fourth plant shutdown announced by General Mills over the past year attributed to excess capacity.
“It was conveyed to our office that employees at the New Albany plant performed at a very high level, and that this is a result of having excess capacity in the system,” Gahan said. “The Pillsbury plant has meant steady employment, good-paying jobs and solid careers in New Albany since 1959, and the loss is tragic.”
Christenson declined to release the average salaries for workers at the New Albany plant.
Uric Dufrene, professor of finance at Indiana University Southeast, said the Pillsbury plant offered high-paying jobs and called the potential closure a “major blow for the region.”
“Pillsbury has been a valuable corporate citizen,” he said. “Perhaps there may be an opportunity for another company to buy the assets there and locate operations in New Albany.”
If another industry took over the plant, it could minimize the damage, Dufrene said. But he added he’s unsure of the prospects of another company purchasing the property.
The mayor’s office stated it would work with General Mills, Gov. Mike Pence’s administration, One Southern Indiana and the Indiana WorkOne to aid the company and the employees affected by the potential closure.