Despite years of rumors about a possible closure, national food
processor ConAgra has no plans to shut down the former Gilroy Foods
plant and relocate elsewhere. In fact, ConAgra is upgrading a
dormant portion of the facility and plans to add 30 positions in
the next year.
Gilroy – Despite years of rumors about a possible closure, national food processor ConAgra has no plans to shut down the former Gilroy Foods plant and relocate elsewhere. In fact, ConAgra is upgrading a dormant portion of the facility and plans to add 30 positions in the next year.
The company shuttered the western Gentry plant in 2000, four years after it acquired the onion and garlic processing chain native to Gilroy. The company is now tearing down portions of the building located on the outskirts of the city, off Highway 152 East, and installing modern equipment in anticipation of reopening next summer.
“This is part of a larger ConAgra Foods initiative,” company spokeswoman Julie DeYoung said. “We’re evaluating all of our manufacturing operations and where it makes sense, consolidating our facilities to places that have excess capacity or can be scaled up for more efficient production.”
In Gilroy, that means five full-time positions and 25 seasonal jobs will be added to the current roster of 530 employees. In Umatilla, Oregon, it means 16 full time employees and 50 seasonal workers are out of work.
The company shut down the Oregon operation and is now trucking the remaining onion harvest to a Nevada facility, according to Umatilla City Administrator Larry Clucas. The closure represents an additional hit to an area that recently lost a 600-job potato processing plant to Canada. Clucas said the ripple effects extend beyond lost jobs.
“The other thing that is going to hurt are the farmers that are raising onions,” he explained. “That obviously is a hole in their cropping cycles.”
He said farmers will have to find new crops to replace their roughly 7,000 acres of onion fields.
And while the Gilroy facility appears safe from a similar fate, jobs have evaporated as the food processing industry struggles to remain competitive in the global market.
Bob Kraemer, vice president of Gilroy Foods prior to its acquisition by ConAgra, said the company was once the city’s biggest employer, providing more than 1,000 local jobs. That number shrunk by half as ConAgra eliminated positions and shut down the Gentry plant to increase “efficiency” and stay competitive.
Even before the corporation took over, Gilroy Foods began exporting portions of its operation to Chile and Mexico, according to Kraemer. Today, China and other Asian countries are emerging as the fiercest competitors, he said.
“Years ago it was rumored that the worth of the land and the cost of doing business in California would drive that industry out of here,” Kraemer said. “The fact that they’ve pulled that off and are considering more production is a very big plus for the Gilroy community. It would be painful if they left.”
The food processing industry closely guards its technology and business strategy, and DeYoung declined to give specifics on the upgrades. She would only say the facility will measure 14,000 square feet and house dehydration equipment transferred from the Oregon plant.
The bulk of the 900,000-square-foot facility in Gilroy has operated without interruption since ConAgra took over. The plant takes raw onions and garlic from the surrounding area and washes, cuts, dehydrates and packages them for sale by groceries, restaurants and other food manufacturers.
Larry Cope, Gilroy’s new economic development director, views ConAgra’s plant upgrades as a promising sign.
“We all know that with a global economy, things can change overnight,” he said. “But this gives us a great indication that they are happy with their facility here in Gilroy, and that they’re willing to invest hard dollars in the community.”
