PepsiCo Announces Closure of Chicago Bottling Plant

PepsiCo is unexpectedly shutting down its Chicago bottling plant, leaving 150 employees in uncertainty amid potential legal battles.

At a Glance

  • PepsiCo has announced the abrupt closure of its Chicago bottling plant, impacting 150 workers.
  • The plant, 60 years old, faced physical limitations.
  • Employees will receive pay for 60 days without work obligations.
  • Union claims the closure violates federal law requiring a 60-day notice.
  • PepsiCo is committed to supporting employees and continuing service in the Chicagoland area.

Termination of a Historic Plant

On Monday, PepsiCo announced the closure of its bottling plant located in Chicago’s Back of the Yards neighborhood, impacting 150 workers. The plant, which carries a 60-year legacy, was cited for “physical limitations” that contributed to the decision to shut down operations. Employees, including Juan Gonzalez, who dedicated 45 years to the company, expressed shock when informed of the shutdown upon arriving to work, revealing a break from industry norms regarding workforce transition communication.

The closure leaves affected employees, like longtime worker Daryl Smith, to consider early retirement or potential reassignment. The union—a key stakeholder—was reportedly kept in the dark despite recently negotiating a new contract with no inklings of the imminent plant closure. The discrepancy generates dissatisfaction among union members for the lack of transparency in company communication.

Union Outrage and Legal Implications

The abrupt shutdown of the plant has sparked outrage from Teamsters Local 727, the union representing the workers. The union alleges that PepsiCo violated federal law by failing to provide the required 60 days’ notice prior to closure. Additionally, communications about the shutdown first reached the union via an email from PepsiCo attorneys, further aggravating the situation. Secretary-treasurer John Coli Jr. of Local 727 criticized PepsiCo’s actions, labeling them as a breach of both the collective bargaining agreement and legal obligations.

“To lay off over a hundred Teamsters workers with no notice to them or the union, in violation of both our collective bargaining agreement and the law, is about as low as you can get,” Coli Jr. said.

Employees will continue to receive their salaries for the next 60 days without any requirement to work, a move aimed at easing the sudden financial burden. However, the union may pursue legal action against PepsiCo, which claims compliance with legal standards while emphasizing commitment to its employees throughout this transition.

Statements from PepsiCo

Amid the controversy, PepsiCo maintains that its actions align with legal mandates, emphasizing a commitment to supporting its workers during this unexpected transition phase. The company stressed its ongoing commitment to serving the Chicagoland area, hinting at maintaining its market presence despite the closure.

“Our top priority is to support our employees during this transition, and our commitment to serve Chicagoland remains strong,” PepsiCo said.

Even in the face of backlash, PepsiCo’s position suggests ongoing support strategies and potential business continuity plans for its regional distribution—all while facing the possibility of legal challenges from the union.

Sources

  1. PepsiCo to shutter Chicago bottling plant, laying off more than 100 workers
  2. PepsiCo to close Chicago bottling plant, impacting 150 workers