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ConAgra's Consolidation to Result in 440 Jobs

OMAHA, Neb. -- ConAgra Foods, Inc. says that its consolidation plan will bring 440 new white-collar jobs here by the end of the year, according to Omaha World-Herald. The efficiency campaign also means closing at least three food-processing plants and expanding four others this year.

For the first time, ConAgra gave an estimate of the number of jobs coming to Omaha under the company's "operations initiatives," started last summer to join up its disparate subsidiaries. The company is considering bringing additional jobs to Omaha as it consolidates, said company spokesman Chris Kircher.

Evaluating plants for closure or expansion also is "an ongoing process. It's not done yet," Kircher said.

ConAgra manufactures more than 35 branded grocery products -- from Healthy Choice frozen meals to Fleischmann's yeast -- along with processed food ingredients and unbranded foods for grocery stores and restaurants.

In the three months ending Feb. 22, ConAgra spent $24 million on relocating employees, opening new warehouses, and other aspects of the operating initiatives, the company revealed in an earnings statement late last week. The company intends to spend another $38 million on the initiatives this quarter.

In addition to job changes, the reorganization involves replacing 1,800 small warehouses across the country with 15 giant ones in hub cities; running companywide functions such as information technology and payroll from the Omaha headquarters; and renovating food plants to produce more than one ConAgra product. At the beginning of the year, the company had opened nine of the 15 new warehouses.

Traditionally ConAgra has been a decentralized holding company, with each independent operating company enjoying considerable autonomy. A single brand might have its own production plant, marketing campaigns, and public relations.

In the 1990s, however, the company added many of its new brands -- including Hunt's ketchup and Chef Boyardee canned pasta -- by acquiring other companies. In a September interview, ConAgra chief executive Bruce Rohde said the acquisitions had made the company unwieldy, necessitating a streamlining of subsidiaries.

In 2003 ConAgra began relocating customer service, research and development, and food service employees to Omaha. Retail finance employees will begin moving this year. When the transitions are completed later this year, ConAgra will have about 440 additional workers in Omaha, according to Kircher. Some will be new hires, and others will be transfers from other locations. Also last year, the company started evaluating its production facilities for efficiency.

Kircher said older plants, as well as those that don't have space to expand or that have obsolete equipment, could be candidates for closure. Geography also plays a part. Plants closer to the market for their products are more likely to be expanded, he said.

ConAgra's cooked roast beef plant in Wells, Minn., is due to close this month. In January and March, respectively, the company announced it would close a Queenstown, Md. hot dog plant and a Nevada, Ohio meat-processing plant. At the same time ConAgra will expand plants in Lufkin, Texas; Mason City, Iowa; Peru, Ind.; and Quincy, Mich. to pick up the production from the closed plants.

The plant closings will eliminate about 500 jobs. Kircher said he did not know how many jobs the four expansions would add, but that expansions and cuts likely would be about equal over the long term. Announcements from time to time about plant closings and expansions are part of the initiatives, he added.

Kircher said the operating initiatives are already yielding results. He cited ConAgra's latest brand -- low-carbohydrate frozen meals called Life Choice -- as an example. The meals are produced at existing ConAgra plants, including one in Council Bluffs, Iowa, which also produce other brands for the company. Traditionally new products received their own production facilities.
ConAgra's new centralized research and development division could create the meals quickly, getting them to market before low-carb frozen meals from other major food companies.

The operating initiatives combine with ConAgra's "marketing initiative," a program it launched in December 2002 to coordinate the marketing of all food brands.
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