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Dean Foods closes its plant amid milk crisis

Bamby

New member
I really do hate to see anyone loose their jobs. But what really irk's is seeing others livelihood destroyed in the fallout. The farmers in Kentucky are screwed they can't find another market to sell their milk. This will lay waste all the capitol they invested to be a dairy operation and force them to attempt to restructure themselves. Most won't likely have the capitol and many will likely ultimately fail.

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The Dean Foods' milk crisis that is forcing dairy farmers in Kentucky and other states out of business also will eliminate jobs for more than 60 Louisville workers.

Officials with Teamsters Local 783, which represents hourly employees at the plant on Bishop Lane, confirmed this week that the Dean's Louisville facility is one of seven that the Dallas-based company will shut down amid a massive restructuring prompted by getting cut loose by Walmart.

Employees were notified in late May about the closing coming sometime in September or October. More details on severance and other benefits will be disclosed at a company meeting June 12.

It's a big blow to the workers who'll have to start over again at the dairy company, said Gerry Francisco, vice president of the local, because Dean has been a top-notch place to work for years.

"Dean's is a good place to work. I have no rocks to throw at them," Francisco said.

The workforce includes about 48 hourly workers and 15 or so production managers and other office staff. Everyone will be let go. That follows the layoff of a handful of people in April, he said.

The sea change in the fluid milk industry had been building for a few years, but what has triggered a tsunami has been retail giant Walmart's decision to launch its own super-sized dairy processing facility in Fort Wayne, Indiana.

Dean had been processing and supplying Great Value private label milk to Walmart for years, and its executives disclosed a year ago that losing Walmart's business would eliminate the need for 90 to 95 million gallons of milk this year and in 2019.

In response, Dean has been shrinking its footprint. It notified more than 100 dairy farmers in Kentucky and other states in February that it would end milk procurement contracts with them at the end of May. The company later extended the termination until the end of June.

In some places, such as Tennessee and northern Indiana, farmers have found other processors to buy their raw milk. But Kentucky's 19 farmers haven't found other companies to pick them up, which is expected to put them out of the milking business entirely.

Dean has also been closing plants. The company's media relations division in Dallas did not return email messages left on Thursday.

The industry has been dealing with a nationwide surplus of milk already, Francisco said, so "we don't know how Walmart is going to make any money. They generally squeeze suppliers" rather than get into the manufacturing business themselves.

The Dean plant in Louisville turns out milk, cottage cheese, sour cream, buttermilk, in fact, tanker loads of high-quality buttermilk. They'd hoped to provide buttermilk to a large biscuit making plant in the region, but that fell through. Other deals for supplying companies with ingredients for salad dressings and other products haven't materialized either, Francisco said.

The jobs at Dean have been coveted. Workers start at more than $18 an hour with good benefits and can rise in the salary ranks to about $30 an hour. That means several can earn up to $65,000 a year with overtime pay.

The workforce is so stable that new jobs often open only when someone retires. Among those who are being let go are about a dozen men and women nearing retirement age, Francisco said.

They are talking with two other food companies in the area about potential openings for laid off workers, but nothing's assured now. The key is that workers with food plant experience are more marketable because of their more specialize skills and training.

Some maintenance and mechanical workers with experience in refrigeration, for instance, have a good shot at other jobs, Francisco said.

The milk plant's closing is still worrisome because of pressures overall in food manufacturing, said John Stovall, president of Local 763. "I have a feeling this could be a domino effect."

Grace Schneider: 502-582-4082; gschneider@courierjournal.com; Twitter: @gesinfk. Support strong local journalism by subscribing today: www.courier-journal.com/graces
 
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