January 16, 2014 1:00 pm

Buffett keeps word, Heinz strikes ‘fair’ deal with Ont. ketchup workers

Heinz has agreed to terms with workers at its Leamington, Ontario facility. The plant, which has been in use since 1909, will shut down in late June.

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Warren Buffett is apparently a man of his word.

H.J. Heinz Co., which was bought by the billionaire investor’s Berkshire Hathaway last June, has struck an agreement with union members at its Leamington, Ont. plant that paves the way for the century-old facility’s closure in early summer.

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The Pittsburgh-based firm has also agreed to terms on severance with the 740 Canadian employees affected by the surprise decision to close the facility, an iconic manufacturing plant located at the centre of the southern Ontario town that has made Leamington nearly synonymous with the word ketchup.

Last fall, Buffett vowed “very generous severance” for the displaced workers. An agreement reached Thursday apparently backs up the pledge.

READ MORE: Heinz Canada closing century-old Ontario facility; 740 jobs cut

“It’s a fair deal,” Rob Crawford, head of the UFCW Local 459 union that represents the Heinz workers, said. “I guess he’s a man of his word.”

“I think between now and next June and thereabouts, there’s going to be very generous severance arrangements made,” Buffett told a Detroit news conference in November.

The agreement will see workers paid two weeks compensation for each year of service at the plant, while providing health benefits over a 52-week period following the last shift, scheduled for June 27.

All employees will also receive a $2,500 “productivity” bonus, Crawford said.

“The company and the UFCW agreed on a comprehensive and generous closure agreement,” Michael Mullen, senior vice-president of corporate and government affairs at Heinz said in an emailed statement.

“This will allow the employees to get through a year to find employment,” Crawford said.

Heinz has also agreed to spend $500,000 to help with the creation of jobs and a retraining centre in Leamington — a town Stompin’ Tom Connors dubbed ‘ketchup country’ — where the facility has been an economic linchpin to generations of workers and farmers.

The facility straddles the main thoroughfare in the southern Ontario town.

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A soaring loonie in recent years has made plants across the country ripe for cutbacks or closures by multinational firms who can easily shift production to cheaper regions. More than 30,000 factory jobs were lost in Ontario alone in 2013.

READ MORE: Kellogg latest to announce Ontario plant closure

Town officials who are assessing the impact of the plant’s closure estimate that between 2.5 to 4 jobs across the region could be affected for every direct job lost at the plant as suppliers, growers and other local businesses feel the pinch of the departure of the town’s single biggest employer.

“It was a big employer for a lot of people, a lot of immigrants who came after the war [Second World War]. There were plenty of people who worked at the Heinz company,” Jim DiMenna, who owns JemD Farms, a greenhouse grower just outside of town, said.

“My father came from Europe and worked at the Heinz company, my brother did as well. If you’re from the area, everybody had something to do with Heinz.”

Heinz has eliminated jobs across its organization since Berkshire Hathaway and another private equity investor, 3G Capital, bought it for $23 billion last year.

In August, 600 administrative jobs were cut. A spokesman at the time told WSJ.com it was designed to “simplify” the organization, “enabling faster decision making, increased accountability, and accelerated growth.”

© Shaw Media, 2014

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