Pactiv. Corp. is poised to shed more U.S. packaging plants in California and Illinois as restructuring continues under new ownership.
The Rockford Register Star reported March 21 that Lake Forest, Ill.-based Pactiv will close the plant in May. About 50 employees will be affected, according to the newspaper.
Employees were told of the impending closure March 19, the newspaper reported, and some received pay cuts effective March 21.
Pactiv officials and representatives of the International Association of Machinists and Aerospace Workers, which represents union workers in Belvidere, Ill., did not return calls seeking comment.
According to a Worker Adjustment and Retraining Notification Act notice filed Feb. 7 in California, Pactiv will close a packaging plant in La Mirada, Calif., by June 3.
The closing will affect 61 employees, according to the WARN notice. A source familiar with the facility told Plastics News that the number of workers to be laid off is closer to 90.
When reached for comment, Tracy Smith, Pactiv employee relations manager, would not comment on the La Mirada closing. It was unclear whether employees at the plant are unionized.
The shutdowns are part of a whirlwind of change that has blown through Pactiv since the packaging and Hefty bag maker was sold to New Zealand's Reynolds Group Holdings Ltd. for $6 billion in November.
Reynolds Group is the packaging subsidiary of Rank Group Ltd., the investment firm founded by media-shy New Zealand billionaire Graeme Hart. Auckland, New Zealand-based Reynolds' plastics-related businesses include Pactiv, Reynolds Food Packaging and machinery manufacturer Sig Combibloc.
Richard Wambold, chairman and CEO of Pactiv, left the company in January, along with John Schwab, the senior vice president who ran its consumer business.
Wambold was in line to receive severance and performance-based stock grants worth $14.6 million, and held stock and options worth $21.4 million. Schwab was to receive a severance package of about $3.8 million. Other top executives' contracts also contained provisions for millions in severance payments if they were let go after Pactiv's sale.
In addition to management, Pactiv's marketing department has been cut back since the first of the year, according to sources at the company. Matthew Gonring, the firm's chief spokesman, was among those whose positions were eliminated.
Another recently announced plant closing will see Pactiv shuttering its 200,000-square-foot City of Industry, Calif., packaging plant in phases, ending in August. That closing will affect 250 employees.
Although union officials could not be reached for comment by press time, the March newsletter of Local 1167 of the United Food and Commercial Workers Union blasted the decision to close the factory.
Instead of doing right by these skilled workers, including some who have dedicated more than 50 years of their lives to helping the plant run smoothly and profitably, Reynolds Group is stripping out the machines at the City of Industry plant to reinstall at other locations, the newsletter said.
Pactiv is in the final phase of a two-year, $12 million equipment upgrade to increase capacity for expanded PS food-processor trays. The program to update extrusion, thermoforming, padding and packaging equipment at four U.S. plants is expected to be complete within months.
Pactiv ranked No. 11 on Plastics News' most recent survey of North American film and sheet manufacturers, and No. 1 in the PN thermoformers ranking.