General Mills denies hydro costs behind decision to close plant
Patrick Brown’s assertion Pillsbury pulled out of Midland over rising hydro costs came as a shock to the Dough Boy’s parent company.
On Friday, the Simcoe North MPP and leader of the official opposition at Queen’s Park issued a statement that first showed sympathy for the employees and families affected by the closure at the General Mills plant. But he quickly changed course, slamming the governing Liberals for their hydro policies.
“General Mills will be moving the majority of their production to a plant in Tennessee, a state with significantly lower hydro rates than Ontario,” Brown said in the statement. “This is becoming an increasingly concerning trend where Ontario’s unaffordable hydro rates are driving businesses, jobs and investment out of the province. With 350,000 lost manufacturing jobs since the Liberals first took office, closed-down businesses will be one of Premier Kathleen Wynne’s legacies for our province.”
In 2015, General Mills announced it would shutter the Midland plant, along with another in Indiana. The products made in Midland would soon be produced in Tennessee, the company said.
“The decision was completely made as part of the ongoing restructure of our supply chain network,” General Mills spokesperson Kelsey Roemhildt said Friday afternoon. “To stay competitive, we’re always looking for ways to optimize operations and reduce excess capacity. We have another plant that makes refrigerated baked goods that can take the excess capacity and then internalize it.”
Brown is correct to suggest electricity rates in Tennessee would be less than in Midland. A study from Quebec Hydro indicated the cost of hydro in Toronto – the closest city studied to Midland – averages 17.81 cents CDN per kilowatt hour, while the cost in Nashville – the closest city studied to General Mills’ Murfreesboro plant – averages 14.28 cents CDN.
But according to General Mills, the electricity costs didn’t factor in the decision to move, Romehildt said. Rather, the company did not have the consumer demand to operate two plants.
When asked if the electricity costs at one plant versus the electricity costs at another plant would factor in the decision as to which plant would be closed, Roemhildt answered no.
“I haven’t seen his statement, so I don’t want to talk specifically about what he said, but we made the decision because we had excess capacity and had to review our operations for efficiencies,” Roemhildt added.
Close to 100 employees were put out of work when the factory shut its doors Friday. It had been a staple of the Midland community since 1952, making a variety of refrigerated baked goods and pizza.
A call to a media representative for Brown indicated the MPP was returning from out of the country Friday and was unable to expand on his comments before press time.
Note: This version replaces an incorrect dollar figure that was originally in this story when comparing the cost of electricity between Ontario and Tennessee.