NestlŽ to Cut 243 Jobs at MN Plant, Expand in WI
NestlÅ½ plans to close a health care and nutrition products plant in St. Louis Park-a move that will result in the loss of 243 local jobs.
Switzerland-based NestlÅ½ submitted a letter late last week to the Minnesota Department of Employment and Economic Development (DEED), indicating that the plant's operations will be phased out during 2011 and 2012 and that the closure will be completed by the end of 2012.
The plant is located at 5320 West 23rd Street. According to the letter, the first group of affected employees will be laid off around June 30 of this year. NestlÅ½ said in a separate e-mailed statement that the company “will do everything it can to assist displaced St. Louis Park employees in finding other jobs with NestlÅ½.”
Several NestlÅ½ representatives contacted Tuesday morning didn't immediately return phone and e-mail messages-so it's not clear precisely why NestlÅ½ made the decision to close the local plant. The company did say in its e-mailed statement that “production will be transferred from the St. Louis Park factory to other NestlÅ½ factories and to co-manufacturers within NestlÅ½'s preferred network,” although it didn't specify precisely which other plants will pick up the work.
But Mike Schatz, economic development director with the City of Eau Claire, told Twin Cities Business on Tuesday that NestlÅ½ has been expanding its operations in that area of Wisconsin in recent years. Based on information previously supplied by NestlÅ½, those expansions will result in the addition of “at least 150 jobs” in Eau Claire this year, Schatz said.
NestlÅ½ now has two manufacturing plants in Eau Claire that together employ between 300 and 450, according to Schatz. In 2009, the company spent $9 million to expand one and $7.8 million to expand the other. And last year, the company secured a building permit to remodel an older portion of one of those plants, a $3 million project that's expected to be completed this year.
Schatz doesn't know whether the Eau Claire expansion has anything to do with the St. Louis Park plant closure and made clear that it's been in the works for several years. But at least a couple of DEED officials received unofficial information indicating that NestlÅ½ was shifting some of its operations to Eau Claire because the local plant had limited space for expansion.
According to the Star Tribune, NestlÅ½ moved into the St. Louis Park plant after it paid $2.5 billion to acquire Novartis Medical Nutrition in 2007. The Minneapolis newspaper also reported that the plant's most well-known product is Boost, a NestlÅ½-branded nutritional energy drink.
In addition to the St. Louis Park plant, NestlÅ½ has at least two other facilities in Minnesota-one in Eden Prairie that produces food and pet care products, and one in Minnetonka that focuses on health care and nutrition products.