New Albany offers dough to keep Pillsbury plant
With union officials tentatively scheduled to meet with General Mills officials next week, the New Albany city council on Tuesday night approved the first step toward providing up to $7 million in financial incentives for the food giant if it's willing to keep its Pillsbury plant in New Albany for five years.
Many of the more than 400 workers whose jobs could be affected by the plant closure filled the council chamber Tuesday night, spilling out into the hallway. The crowd burst into applause a few times as city leaders spoke in support of the plan, then erupted with a standing ovation once the vote was cast.
Some council members expressed concerns, including the long-term impact of floating bonds to fund it and setting a precedent to bail out other companies in what Councilman Greg Phipps called "corporate welfare."
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Company officials have declined to comment on what alternatives remain to its plan to close the plant, which has made refrigerated baked goods in the city since opening there in 1959.
The vote late Tuesday night was 5-2 with Councilmen Pat McLaughlin, Dan Coffey, Shirley Baird, Bob Caesar and Scott Blair voting in favor. Councilmen Greg Phipps and Kevin Zurschmiede were the dissenting votes, saying it was happening too fast and they needed more info.
"I think the mayor did a great job in putting this together as quickly as he did," said Roger Miller, president of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union Local 33G.
That union represents more than 400 employees at the Pillsbury plant and neighboring Sonoco Products, which General Mills contracts to make paper and metal cans for its dough products.
Miller said the union remains hopeful the city's financial support to modernize the plant will make a difference ahead of negotiations, which are expected to start Tuesday and last for at least three days.
Among those deeply concerned about General Mills' plan to close the plant is Del Slayton, 73, who has worked at the neighboring can-making business since Pillsbury began there. Sonoco began as R.C. Can Co. and later was Boise Cascade Corp.before taking it's current name.
Slayton, whose among workers who operate a can-making machine called a winder, said he's mainly concerned for younger Pillsbury and Sonoco workers whose houses and cars aren't yet paid off, as well as other area small businesses that could be forced to close due to the plant closure.
"I'm financially OK. God's been very good to me. It's the idea that there's going to be people that aren't as fortunate as me hurting," he said.
Hourly workers at both facilities earn $26-$27 an hour, with boosts for second and third shifts. Workers can make up to $100,000 annually with overtime. And benefits at General Mills include fully paid health insurance.
Over the last few years, the company shifted manufacturing of some product lines to its more modern operation in Murfreesboro, Tenn., plant. Slayton said General Mills might be able to do it cheaper in Tennessee, though he doubts workers at other plants could beat Sonoco's top-notch winder operators in production.
"There's two ways to look at saving money. If you pay somebody $15 an hour and they only put out 50 percent of what somebody $25 an hour is putting out, you're losing $5 an hour," Slayton said.
During Tuesday's council meeting, Zurschmiede said he asked Caesar if a vote could be delayed to put together a package that included money from the state and other surrounding communities where General Mills workers live. He also heard from other local business owners wondering why the city would commit millions in an effort to retain a company there for five more years.
"They feel like this is somewhat of a slap in the face," Zurschmiede said. "Where is their portion of the $7 million?"
Zurschmiede added he also feels it is "false hope" at this point for the General Mills workers since the company has not said whether it might be open to staying.
Dan Coffey, who supported the plan, told General Mills workers that he hopes they realize how much this could affect the city's 45,000 residents, many of which make much less than the $26 to $27 an hour average at the Pillsbury plant.
Council members John Gonder and Diane Benedetti were absent.
Baird was among those who disagreed with Phipps and Zurschmiede, saying: "I think New Albany needs to be the one to start out with and step forward. I think other municipalities will come and join with us."
David Duggins, the city director of economic and redevelopment, said the city recognizes that the company's $30 million payroll has a "ripple effect" that likely quadruples that amount on the local economy.
Economic incentives usually start at the local level before the state sees there's a strong enough community interest to add state incentives.
The financial plan would include a combination of selling new municipal bonds, tax-increment financing money and possibly economic development income tax money, although a bond issuance would require additional council approval.
Many additional details remain to be worked out in the financial plan, city leaders said, noting this was a first step.
Matt Hall, executive director of One Southern Indiana, said the organization remains "guardedly optimistic" that a plan could sway General Mills, adding the chamber of commerce remains ready to assist workers either way.
New Albany resident Mark Cassidy said he worries the plan could be setting an "awful precedent."
Cassidy would like to see more support from other cities and counties who benefit from property taxes paid by workers.
"It's an important plant," Cassidy said. "I sure as heck don't want to see it go but I'm afraid we're jumping awful quick on something that could be setting a terrible precedent."
While Slatyon has worked at Sonoco for more than a half century, many others have three or four decades of experience. He still feels there's "not a better product in the world" than Pillsbury dough.
"It really bothers me to think it all could come to an end," Slayton said.
Reporter Charlie White can be reached at (812) 949-4026 or on Twitter @c_write.