The Bumble Bee tuna cannery in Mayagüez will be closing its operation after 50 years of doing business in Puerto Rico, leaving about 260 people jobless, effective June 30, News is my Business learned.
High-ranking Bumble Bee Foods LLC. officials were at the plant Tuesday afternoon informing workers of the impending closure, which was formally announced later in the day.
“We continuously assess our supply chain to ensure our operations are managed in the most efficient and effective manner to remain competitive in the global marketplace,” said Bumble Bee Foods Senior Vice President Operations Jan Tharp, in a statement.
“The employees and management have worked very hard over the years to increase the efficiency of the facility, but reductions in production volumes have negatively impacted our costs to the point that we unfortunately can no longer sustain operations in Puerto Rico.”
The plant — established in 1962 — is one of only two Bumble Bee sites that pack tuna in the United States. However, in the last six months, the operation has experienced sharp downsizing in terms of jobs and production.
In October 2011, the San Diego-based company announced it would be cutting 120 jobs in response to intense competition from overseas competitors with lower labor and production costs.
At the time, Tharp said the Mayagüez plant would reduce its production schedule by one shift. Employees affected by the impending closing are being provided employment transition support, including severance and outplacement counseling.
Western Puerto Rico was once a major hub of tuna packing but very little remains. The company said it had remained on the island thanks in part to tax and labor incentives from Puerto Rico’s government.
But a source close to News is my Business said Bumble Bee’s attempts to reach an agreement with the current administration to shift production from a plant in Aruba to Mayagüez were unsuccessful.
Nevertheless, Tharp said “we are grateful for the support of the Government of Puerto Rico and the Mayagüez community for their part in helping to keep our plant operational for as long as we have, especially in recent years as business and competition increasingly became challenging.”
“We also want to convey our deepest appreciation to all our employees and management for their hard work and commitment over the years,” he said.
Government agencies react
Late in the day, Economic Development and Commerce Secretary José Pérez-Riera issued a statement “greatly regretting” the closing.
“For some time now we’ve been in conversations with the company’s management to find viable alternatives to prevent the plant closing, but unfortunately, they have been experiencing a consistent loss in production volumes for several years, which has negatively impacted the company’s efficiency and costs. The operation ceased to be profitable,” he said.
While he said the Puerto Rico Industrial Development Co., which he also heads, granted the company an unspecified amount of incentives to create and retain jobs, and perform infrastructure improvements in a “final attempt to help them retain the operation, the global situation and the loss of business did not allow the company to meet its business goals,” he said.
Meanwhile Labor Secretary Miguel Romero said the agency was notified Tuesday of the layoffs, which triggered it to activate its services. He too said Bumble Bee had received “millions” in benefits under the Job Creation Incentives Program, as well as 100 percent exemption in municipal and property tax payments.
The company was also excluded from the Fiscal Stabilization Law and Law 54, which levied a special 4 percent tax on certain corporations. In all, Bumble Bee received $11 million from the agency.