More bad news for workers – Coca-Cola is closing down another factory and firing all 135 people who work there.
As if high food prices, food shortages, stubbornly high unemployment, and trade wars weren’t enough already!
This one’s especially heartbreaking because it marks the end of an era for Coca-Cola…
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The affected plant is at 1201 Commerce Boulevard in American Canyon, California.
(And it’s unfortunately one of a slew of factories closing in California.)
Coca-Cola will close the plant by the end of the month and lay off all 135 workers who’ve made a living there.
One of the things that makes it even worse…
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Coca-Cola originally announced plans to close the plant back in 2021, with an exit date of 2023…and then it just kind of faded into the background.
I fear it may have lulled some of the staff into a feeling of “maybe they won’t do this after all” – which is a shame, because as it turns out, they still planned to close it all along.
And the cost to workers is, obviously, substantial.
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All staff are being laid off, although a handful will stay on through August to finish the transition.
The warehouse component of the plant will close on December 31st.
Now, the somewhat better news is that workers are receiving severance and job placement support, so at least they won’t be entirely hung out to dry.
And there’s another layer to the story…
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Beverage companies like Coca-Cola don’t “just” dream up new flavors and market them.
Along the way they have to:
– Test and refine the recipe;
– Mass-produce it;
– Combine it with carbonated water in the right ratios;
– Bottle it;
– Transport it to stores.
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Historically beverage companies have handled this by effectively becoming conglomerates – vertically integrating every part of the process with employees, plants, and trucks under their control.
But that’s…expensive.
And it means that companies like Coca-Cola have to be kind of “jack of all trades, master of none” – they have to keep up with best practices in a lot of different areas and handle all of the complexity that these global supply chains require.
(Which gets even worse when you have a global trade war going on…)
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Coca-Cola has decided that the answer is, simply, to simplify.
There are companies who are very good at bottling.
There are companies who are exceptional at logistics.
There are companies who do a great job of transportation and supply chain management.
Coca-Cola doesn’t have to compete with all of them. It can just outsource to them, instead.
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The closed factory in California was a company-owned soda bottler.
Coca-Cola is now fully outsourcing these operations to other companies, to help it run a lighter business model with less complexity.
And of course, what that means is…some of those jobs probably have to go somewhere.
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Of course, because these other bottling companies that Coke is now outsourcing to are BETTER at bottling…probably translates to “more efficient.”
Which means they are probably doing more with automation, requiring fewer humans for each step.
This, of course, translates to fewer jobs. Plain and simple.
Plus…
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There’s no requirement that any “added” jobs be in California or even nearby states.
Sure, logistics have to be rerouted, but Dr. Pepper, for example, is centralizing a ton of its production capacity in South Carolina. So even if there are some jobs recouped, they may not be gained by these poor laid-off Californians.
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So, if Coca-Cola no longer has to manage quite as much of the production and logistics, what are they going to do instead?
Well, marketing for one.
(And let’s face it – Coke has always been exceptionally good at that. Remember the polar bears? Of course you do.)
Also new flavor development. Case in point:
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Do you love creamsicles?
Obviously.
Do you love Coca-Cola?
I assume so, since you’re reading this?
So, orange cream coke = instant winner.
(There are loads more new flavors they’re trying out, this is just my favorite.)
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So there you have it – the unfortunate US factory closure by Coca-Cola…
Why many of those jobs are NOT coming back…
And the impacts on a local and state economy already strained by lots of factory closures.
I want to take a moment and wish every affected person the best as they take their next steps.
Are you worried about a potential local factory closure? How are you preparing?
Let us know in the comments!
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