Frito-Lay to shutter isle manufacturing operations
Frito-Lay North America is closing its manufacturing operations in Aiea by the end of the year, leaving 108 employees without jobs, the company said yesterday. A line of Maui-branded snacks will be made on the mainland.
The closure was due to a consolidation of Frito-Lay's manufacturing operations from 34 to 32 sites to increase productivity, according to company spokesman Jared Dougherty. The other plant being shuttered is in Lubbock, Texas.
Production will move to newer, larger facilities in Arizona, California, Colorado, Kansas, Texas, Utah and Washington.
Frito-Lay's manufacturing facility at 99-1260 Iwaena St. in Aiea was built in 1982.
Employees were informed of the layoffs yesterday morning. They will be offered severance packages, outplacement services and early retirement packages.
Approximately 123 Frito-Lay employees will be retained for sales operations and product distribution.
The facility in Aiea, which sits on lands belonging to Kamehameha Schools, was described by the company as a "landlocked site that cannot be expanded." Frito-Lay plans to keep the facility as a temporary distribution center until it finds a new location.
Because of the closure, a line of Maui branded products, including Maui Style Onion Flavored Potato Chips, Maui Style Shrimp Chips and Maui Style Taro Flavored Potato Chips, will be manufactured on the mainland.
Dougherty said he did not believe the raw ingredients for those product lines were purchased locally.
Hawaii was issued a Fritos franchise in 1947, before what was then the Frito Co. merged with J.W. Lay & Co. to become Frito-Lay Inc. In 1965, Frito-Lay Inc. merged with PepsiCo Inc.. of Purchase, N.Y.
PepsiCo, the largest U.S. maker of salty snacks, is shifting production to newer and larger facilities as it seeks to expand sales. The Frito-Lay North America division accounts for $10.3 billion, or one-third, of PepsiCo's total sales.
PepsiCo said yesterday it will spend $66 million pretax on the factory closings in the fourth quarter. Severance costs for the fired workers will represent $12 million of the fourth-quarter expense, the company said.
Bloomberg News contributed to this report.