New Brunswick

Dr. Oetker's closure of New Brunswick pizza plant 'a slap in the face'

Dr. Oetker stunned the town of Grand Falls on Tuesday with news it will close its pizza-manufacturing plant and shift most of the work to Ontario.

Grand Falls mayor says town devastated by news company is sending work to Ontario

Dr. Oetker is closing its pizza plant in the Grand Falls area in May and will be moving 70 per cent of its manufacturing to the company's plant in London, Ont. (Andrew Lupton/CBC)

Dr. Oetker stunned the Grand Falls area on Tuesday with news it will close its pizza-manufacturing plant and shift most of the work to Ontario.

Mayor Marcel Deschênes said he only learned Tuesday morning of the planned closure, which will put 180 people out of work.

"It's like a slap in the face," he said. 

Dr. Oetker announced it will close the plant in Saint-André, just outside Grand Falls, at the end of May but promised severance packages and a $4 million community fund to help with retraining.

Most moves to London, Ont.

About 70 per cent of Dr. Oetker's production at Grand Falls will be moved to the company plant in London, Ont., and the other 30 per cent will move to its plant in Lodi, N.J.

"Severe economic pressures" and an "ultra-competitive" market have forced the restructuring, executive vice-president Cécile Van Zandijcke said in the statement.

Deschênes said the closure is devastating to his community.

"It really came as a surprise to everyone," he told CBC NewsDeschênes said the town of about 5,300 and council were were kept in the dark about the company's plans.

"In a small community — 180 jobs is really a blow," said Deschênes. 

$3 billion in sales worldwide

The company, established in 1891 in Germany, only took over the northwestern New Brunswick plant from McCain Foods in August 2014.

"When the pizza plant came, when they put people to work, it was a dream come true for a small community," Deschênes said.

"Things were going well yesterday, but not today." 

In his statement, the company said the retail food climate has become "increasingly challenging" in recent years, both in terms of price and cost.

Dr. Oetker had worldwide sales of $3 billion in 2016, according to the statement.

Company representatives at the plant would not comment Tuesday on the closure, saying they had to spend the day with employees.

"This very difficult announcement does not reflect on the quality of work and dedication of our Grand Falls employees," Van Zandijcke said.

"There is nothing the Grand Falls employees could have done differently."

Community fund

Officials could not immediately provide information about the wages of the 180 employees or whether they work full time or part time.

Employees will receive a severance package that "exceeds the statutory requirements," the company said, as well as employment counselling, resumé support and career-planning help.

Dr. Oetker will also continue to provide group health and dental benefits until Dec. 31, according to the statement.

"We care deeply about the the people on our Grand Falls team and we will sit down individually with them to discuss their own specific path forward," said Van Zandijcke.