As part of the strategy at General Mills, Inc. (GIS) to restructure its global supply chain, the giant consumer foods company will close its Vineland, New Jersey manufacturing facility, which is where Progresso soup products are made. Ironically, it was earlier this year that General Mills used television commercial spots to show Vineland as the home of Progresso soups, but those ads were later pulled after exaggerating the use of local produce.
The good news is, at least for the moment for workers, is that the plant won’t close until the first fiscal quarter in 2018. All those impacted will receive severance and transition benefits. No severance details were provided, but according to TwinCities Business (General Mills is headquartered in Minneapolis), a previous regulatory filing by General Mills estimated severance costs to be approximately $18 million.
The bad news is that approximately 370 employees will still lose their jobs. This was a tentative decision by General Mills because it still had to negotiate with union officials, but the closing became official on Monday. General Mills has encouraged employees to consider applying for work at its Progresso facilities in Hannibal, Missouri. As part of the global supply chain restructuring, General Mills has announced the closings of several plants this year, and one has been sold.
GIS has appreciated 18.17% over the past 12 months while the S&P 500 has appreciated 10.55% over the same time frame. GIS currently offers a dividend yield of 2.95% versus 2.09% for the S&P 500. With a beta of 0.57, GIS is less volatile than the broader market, which doesn’t guarantee anything but should make it more resilient than the majority of stocks found throughout the broader market. Operating cash flow of $2.63 billion over the past 12 months is another positive. GIS is currently trading at 24 times earnings.