Cavendish Farms staff taking big hit WAYNE THIBODEAU The Guardian
NEW ANNAN — A giant in Prince Edward Island’s economy is now feeling the effects of the global economic recession and its 800-member workforce is going to pay the price.
Cavendish Farms, P.E.I.’s largest private-sector employer, will be forced to close its doors for two weeks because of the faltering U.S. economy.
The New Annan-based company confirmed Thursday it would shut down its two processing plants in Prince Edward Island and another in Jamestown, North Dakota, from Nov. 20-27 and Dec. 23-Jan. 2.
But Mary Keith, a spokeswoman with Cavendish Farms, said that’s only the beginning.
Keith said the company is planning to shut down production for at least one full week every two months all next year to align production with customer demand.
“What we are saying is if market conditions do not improve than we would anticipate taking one week down for every two months that the plant operates to adjust to customer demand,” Keith said in an interview with The Guardian on Thursday.
“Obviously, we remain hopeful that our efforts to secure new business and an improvement in the economy will result in an increase in production.”
The company, which processes frozen potato products, employs over 800 people.
More than 550 employees will be impacted. They’ll be able to take vacation time or collect employment insurance benefits during the planned shutdowns.
Keith said Cavendish Farms has been in contact with the P.E.I. government regarding the planned shutdowns.
“I can tell you there has been discussions with the province with regard to the current situation, but I am really not able to discuss that any further,” she said from Saint John, N.B.
A spokesperson for the province said the government is assessing the situation and will have more to say today.
Cavendish Farms is the world’s fourth largest processor of frozen potato products, supplying grocery, food service industry and restaurants around the world.
Keith said a nearly 10 per cent unemployment rate in the U.S. has resulted in a drop in the consumption of French fries, primarily at fast food restaurants.
“A significant drop in demand for frozen potato products in the U.S. means that we must adjust our production levels and inventories.”
Cavendish Farms History
–1980, C.M. McLean plant in P.E.I. is purchased by the The Irving Group. New name is Cavendish Farms.
– 1996, A second state-of-the-art facility is constructed in P.E.I., doubling capacity.
– 2001, Purchase of third plant in North Dakota makes Cavendish Farms the fourth largest processor in North America.
Source: Cavendish Farms
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city resident from P.E. writes: Let me see , just Irving corporation looking a hand out. Closing over Christmas , New Year this way look at the money they would save by NOT having to pay for Christmas and New Year statuary paid holidays. In my view a sneaky way around this situation !!!!!
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thomas hill from summerside, pei writes: it going to be a hard xmas on pei this year
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B---S--- from PEI writes: Fast food companies are doing record business. They do well during tough economic times because people don't want to spend money on more expensive food.
This excuse is BS. The owners want to squeeze as much production out of the employees, but in a smaller window of time so they can cut back wages. They want to increase their profit margin at the expense of the taxpayer (EI for employees for the laid-off weeks), which also costs the employees in reduced overall annual wage.
In the grocery stores, I'll be buying from the competitor from now on.
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For Once from pei writes: This will be just a push for gov't money..bail us out like everyone else
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What is going on? from PEI writes: What does this mean for our farmers? Has the company thought of them? All the information so far is for the employees, which of course is very, very important, but I hope they're taking the farmers into consideration too. It's been terrible harvest conditions (which also means added expenses and breakdowns), and if Cavendish is going to delay taking their potatoes or dosen't want them, they should tell the farmers. I hope this is a short term problem for the company, the employees and the farmers.
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What is going on? from PEI writes: What does this mean for our farmers? Has the company thought of them? All the information so far is for the employees, which of course is very, very important, but I hope they're taking the farmers into consideration too. It's been terrible harvest conditions (which also means added expenses and breakdowns), and if Cavendish is going to delay taking their potatoes or dosen't want them, they should tell the farmers. I hope this is a short term problem for the company, the employees and the farmers.
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margaret from vancouver, bc writes: Bottom line is consumers are eating Carbs, and deep fired food less and less. It's called C--- food.
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independaent independent from charlottetown, pe writes: You would kind of think the sale of potatoes would be through the roof due to the recession. Now family's dont have the money to spend at fancy restuarant's, so the sale of potatoes to the fast food chains i would think be in high demand.
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T A from PEI writes: Why all the criticism of Cavendish Farms?? They have employed many Islanders for Years and are a well respected Company! Also the Irvings have done much for Maritimers over the years!
It is common Knowledge that the US Economy is affecting many Businesses World Wide. Read the International News and be Informed! Cavendish Farms are not the only ones being affected by the US Economy! McCain has also experienced the same.
They are at least giving Employees a choice between UI and Vacation Time! They are laying off for a Two Week Period now and another maybe later! I'd say they are already DOING THEIR BEST to keep their Employees working.
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Realistic thinking from pei writes: You subtract a product from the market - someone's out a job. Sometimes many lose jobs. Can't have it both ways. People are paid to produce a product. If the product in any form is said to be bad for one's health and sales go down then it only makes sense the company do something to offset that loss. It's the rule of business. Where is it written that a business with owners financially-healthy must cover the costs of consumers' decisions on what or what not to purchase. I think we had better brace ourselves for a lot more business closures and job losses so long as the public continue to call for the sale and/or use of certain items to discontinue Also, the personal bank accounts of business owners are not the same accounts that fund the business.
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Interesting to Note from pei writes: The Irvings are a brilliant business family that amassed fortunes because they knew what needed to be done to keep their operations viable. Good for them and good for their businesses. However, the shutting down at Christmas doesn't seem like a kindly thing to do with the employees. I would think that would lower morale to the point where the employees could build resentment and become less productive and less loyal. The employees WILL NOT get EI benefits for a week here and there as there is a two week waiting period before you can draw benefits (specific response to B---S---from PEI who posted earlier).
If the farmers are concerned, then perhaps they should look at selling their product to other manufacturers for their crops. I understand the Irving family has supported the potato industry in a huge way, and if they decided to move away from French Fries to something else, well, the farmers will either grow something different with the same arrangement, or the farners will have to actively seek new markets. It is how the business world works. I just hope that no child has a sad Christmas because Mommy or Daddy lost a week's wages.
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Michael Nesbitt from Miscouche, PE writes: The big problem, as far as news is concerned, is that there is little trust of the information we are given.
Late last year and earlier this year, the news was all about how restaurants and fast-food outlets were doing booming business through the recession , reporting 16% increases and better.
Now, a major potato-product supplier is claiming cutbacks due to lack of orders.
Once more, the two sides of the story contradict one another.
Perhaps the closure of the three McDonalds outlets in Icland was the tipping point... but wasn't that because of high import costs? (tied to German distributors)
From what I have heard locally, Cavendish has upgraded it's facilities, and the day-to-day production has increased noticeably over the past few years. Is it a case of outpacing the sales department by being too good at what you do, or having enough employees who have shown commitmentment to their employer to achieve this level of production?
Why would privately-owned Cavendish Farms have discussions with the government? Over employees being laid off for a week at a time? It's a hit to employee pay schedule, definitely, but something overwhelming and likely to make most individual employees go through the irritation of EI filing and the waiting period to cover the week's losses? Not in most cases.
Bottom line, since that is what this is all about, is that trust is sorely lacking when it comes to big business explanations of actions that negatively impact their employees or the public in general.
They might be absolutely correct, but when the upper echelon of income earners continue to manage while the low-end, hourly wage earners are sidelined, what should the reader think?
Just consider the billions of bail-out money that was spent on banks, insurance companies and the stock-markets over the past two years, and who is continuing to take home paycheques.
How about this scenario: reduce stock now. Later, raise prices claiming low reserves? Hey, it works for the oil companies... hmmm, that's Irving, too, isn't it? Too simple? Probaby; a week here and there is not enough to make that scenario work.
Business is more complex than we labourers can imagine. But, then again, imagination is sometimes the key, isn't it?
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Bill from Summerside, PE writes: With all the money the Irvings saved on interest free loans from government in recent years why dont they suck it up and absorb some losses.
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hmmmm hmmmm from chtown, pe writes: instead of shutting down the plant for the week, why not just have a f day work week for the next couple of months, you end up saving the labour cost and the families can still have an income, mind you it wouldn't be as big.
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What's all the fuss? from PEI writes: I don't understand what all the hype is about. When I worked there years ago they did a periodical shut down here and there to get work done. No big deal. Use the first two weeks as your waiting weeks for EI. Then anything after that you will get paid from EI. It is not like you are going to be out of a job permanently!
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important info from pei writes: Don't be fooled...government and the Irvings know exactly what dates they are shutting down in the new year...they are just not telling. Dig deeper Guardian!
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hmmm hmmm from chtown, pe writes: instead of shutting down the plant for the week, why not just have a four day work week for the next couple of months, you end up saving the labour cost and the families can still have an income, mind you it wouldn't be as big.
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