04/25/03
By BRIAN LAWSON
Times Business Writer brianl@htimes.com
The owner of Meadow Gold Dairy will lay off more than 70 employees and close the Huntsville dairy this summer, the company announced Thursday.
Dallas-based National Dairy Holdings said it plans to end milk processing at the dairy, which has operated at 601 Clinton Ave. in downtown Huntsville since 1940. The company plans to establish a distributorship at another Huntsville location, which hasn't been determined, but milk processing will be shifted to an NDH plant in London, Ky.
The company hopes to close the dairy by June 30 and will move to another location as soon as possible, pending negotiations with union officials. In a news release issued by the company, Sidney Schepps, general manager for the local dairy, said the plant is closing because it's no longer cost effective to process milk there. He said the decision shouldn't reflect on the "excellent performance of local employees."
Meadow Gold will continue to employ up to 120 drivers and distribution center workers in Huntsville and other locations in Alabama, company officials said. In announcing the closing, NDH said between 80 and 87 employees would lose their jobs, but local union officials said 70 employees would be affected.
The closing announcement comes less than a year after Meadow Gold employees told the Huntsville school board that the dairy would likely shut down if a $500,000 school milk contract was awarded to a Tennessee-based competitor, rather than Meadow Gold.
The board chose Purity Dairies of Nashville, which bid $40,000 less than Meadow Gold.
Meadow Gold also lost a contract to Purity to supply milk to area Wal-Mart stores, said Randy Headley, an international representative for local workers of the Retail, Wholesale and Department Store union.
Headley said the union will begin negotiations next week with NDH about the timing of the plant closing. Negotiations will also cover employee severance and benefits packages.
He said the union will try to persuade the company to continue to process milk in Huntsville.
"We think the people in Huntsville should have milk produced in their own state, not shipped from two states away," Headley said.
Fred Stern, a spokesman for NDH, said the decision to close the plant followed a six-month review that found excess capacity in the U.S. dairy industry. Stern said the consolidation of company operations will improve efficiency, which means cost savings.
National Dairy Holdings was formed in 2001 in an agreement developed by the U.S. Justice Department following the merger of dairy giants Dean Foods Co. and Suiza Foods Corp. The Dairy Farmers of America Cooperative is one of the partners in NDH.
Meadow Gold's Huntsville dairy and 10 other dairy operations were spun off to NDH to address government antitrust concerns. Meadow Gold was the only Alabama dairy included in the deal.
H.P. Hood, a Massachusetts dairy company, is awaiting government approval to buy NDH. The purchase would make H.P. Hood the second-largest dairy company in the country, next to Dean Foods, which owns Purity.
Headley said the union will try to help plant workers, who make on average about $14 an hour, find other union jobs in the area. The union also will explore whether some workers can transfer to another NDH plant or receive truck driver training to remain with the company locally.
The city of Huntsville has long had its eye on the Meadow Gold Dairy property, which is beside the Von Braun Center. A 1993 VBC master plan recommended the city buy the property for expansion or parking.
Joe Vallely, the city's economic development director, said Thursday he was not aware Meadow Gold was planning to abandon the plant. He said city officials have not recently discussed the possibility of buying that property.
However, he said, "Its proximity to the civic center certainly lends itself to be considered."
VBC Director Ron Evans said a parking garage "would be a good utilization of that property."
