Union effect stifles profitability: MERRY CHRISTMAS!

12.19.2013

Farmland Dairies closing Wallington plant, putting hundreds out of work 


Farmland Dairies’ landmark Wallington plant, which boasts such successful brands as Skim Plus, is closing down, putting more than 300 employees out of work.

KEVIN R. WEXLER / STAFF PHOTOGRAPHER

Farmland Dairies in Wallington on Wednesday.

The shuttering marks the second closure of a milk-processing plant in the borough since October, when nearby Consolidated Dairies Inc. went out of business. Consolidated, which was in a legal dispute with Farmland, had 138 workers when it closed. The loss of both dairies will costWallington about 460 jobs.

Farmland’s owner, Dallas-based Borden Dairy, said it will continue to produce its popular products at other plants, but industry observers say the Wallington plant fell victim in part to the public’s waning thirst for milk.

The company filed notice with the state Wednesday that it intends to close its Bergen County plant, and notified the facility’s unions and 323 employees of the impending closure, said Borden spokesman Fred Stern. Companies are required by law to give 60 days’ notice of a plant closure. Stern said they hope to shut down within that time frame.

About 20 Farmland employees are represented by the Teamsters, while 250 are members of Local 338 of the Retail, Wholesale, Department Store Union, and United Food and Commercial Workers.

“We’re obviously very disappointed, very upset,” said Joe Fontano, political and communications director for Local 338. 

“It’s 250 full-time, good-paying union jobs with good benefits that are going to be lost. And its 250 families that got some really bad news just a week before Christmas, and it’s horrifying.”

Farmland has a rich history, with roots as a small dairy farm started by the Goldman family in 1914 in Fair Lawn.

“It’s unfortunate to hear that this is a decision that’s being made,” said Marc Goldman, 66, whose grandfather Max was a founder with his brother Jacob “Jake” Goldman.

New Jersey is still home to many big milk processors and distributors, such as Dean Foods in Burlington, Readington Farms in Whitehouse, Cumberland Farms in Rosenhayn, and Johanna Farms in Flemington. Farmland is a sizable plant, serving customers such as Wal-Mart.

“There is a very strong [milk] processing, manufacturing in the state,” said Bruce Krupke, executive vice president of the Northeast Dairy Foods Association in Syracuse.

But the industry in the metro New York area is under pressure because U.S. milk consumption is down and the cost of doing business in the region is high.

“Consumers are drinking many other types of beverages and eating more yogurt,” Krupke said. “The share of the stomach is only so big, and milk has been on the slide. So any milk plant is feeling that pressure.”

Borden is closing its Wallington plant in an effort to “improve operating efficiency and enhance competitiveness,” Stern said.
“This has been a very difficult decision,” he said.

According to Stern, Borden Dairy owns Farmland Dairies, and Borden is affiliated with the Mexico’s Grupo Lala. But in October 2009 Grupo announced that it had purchased Farmland, and Krupke described Farmland as a licensee of the Borden name.

“They wanted to bring the Borden name back to the Northeast,” he said.

Raw milk is processed at Farmland’s Wallington plant and then distributed. Distribution of Skim Plus milk and Farmland cream products will go on, said Stern.

“We will continue to service the customers that we have,” he said.

By the mid-20th century, the Goldman family had given up their cows and began just selling milk at the retail level, he said. 

At one point it was called Max Goldman’s Dairy. In 1960, it merged with Farmland Dairy in Paterson, with the milk processing taking place at the 5-acre site on River Road in Fair Lawn.

In 1971 the milk-processing operation moved to a new facility in Wallington, where it’s been ever since. Marc Goldman served as Farmland’s president for 10 years, and one of his claims to fame and a successful Farmland product was his development of Skim Plus, a tastier, creamier skim milk.

“People were complaining to me, not that anybody needed to tell me, that skim milk tastes lousy, and ‘Hey, you’re in the milk business, can’t you do something about it?’ As I looked into it, I could, and I did. I was pleased with the reception to that product.”

Farmland became the first outside dairy granted a license to sell milk in New York City in 70 years in the mid-1980s after winning a landmark constitutional case.

The Goldman family sold Farmland to Italian food giant Parmalat in 1999, a company that ran into legal trouble. Group Lala bought it in 2009.

“I always kept the plant kind of ahead of the curve in terms of technology and everything else,” Goldman said. “I was interested in staying on it both equipment-wise and product-wise. I was always proud of the quality product of the service we provided to the marketplace and to consumers. It’s unfortunate it won’t be there.”

At a bus stop near the plant a 67-year-old Paterson mechanic who has worked at Farmland for 14 years said that at a meeting Wednesday, employees were given two months’ notice that the plant was closing and thanked for all their hard work.

“There have been rumors for years [of the plant closing],” said the worker, who didn’t want to be identified.

He said he’ll probably just retire: “Have to. There’s nowhere in the world a 67-year-old is going to find a job,” he said.
He was dreading telling his girlfriend the news.

“It’s been rough,” he said. “It’s going to be rougher when I have to go home.”


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