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Pillsbury shutters 2 plants
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May 3, 1999: 12:50 p.m. ET
Flour producer cites cost savings for closings, affecting 151 employees
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NEW YORK (CNNfn) - Flour and refrigerated dough maker Pillsbury Co. said Monday it is closing two of its U.S. manufacturing plants effective immediately to streamline expenses and save money, affecting about 151 employees.
The Minneapolis-based firm, which is a subsidiary of London-based food giant Diageo plc (DEO), said it will shutter its Blackwood, N.J., plant and its Lenexa, Kan., plant effective immediately, transferring production to other facilities. The two locations will be permanently closed within a month.
The closures come as Diageo continues to focus on streamlining costs and boosting lagging sales, particularly among its North American food processing divisions. Overall sales volume declined 4 percent in the fourth quarter of 1998, according to Diageo's interim financial statement released in March.
"After several months of research and analysis we determined that it is more cost effective to consolidate the manufacturing," said Randal Baker, vice president of operations, adding that the closures will make the company "more competitive in the future."
The 151 employees who will be affected by the closures will receive severance, benefits and outplacement services packages, Baker said.
Diageo shares were up 5/16 to 46-9/16 in early Monday afternoon trading. 
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Diageo
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