Calistoga Beverage Company (Nestle) announces plan to cut 78% of workforce
By John Waters Jr., Editor, Weekly Calistogan
Thursday, November 06, 2008
Feeling a ripple effect from high fuel prices and a tight financial market, Calistoga Beverage Company announced the layoff of 78 percent of its workforce.
â€œWeâ€™ve been experiencing a softening in demand of bottled beverages for some time,â€ said Calistoga Beverage Companyâ€™s Director Chris Canning early Wednesday. â€œAs a result weâ€™re taking action to reduce our workforce.â€
Canning would not say how many people would be getting cut, just that the number represents more than three-fourths of the local workforce.
â€œWe have a number of permanent employees and part-time employees, so at this point weâ€™re only referencing 78 percent,â€ Canning said. â€œOne of our priorities is to help our employees with the transition.â€
Two brands of water are currently bottled at the Calistoga plant on the Silverado Trail â€” Calistoga Water and Arrowhead. The bottling of Arrowhead spring water will be transitioned to a Nestle North America-owned plant in Southern California, Canning said.Â The Calistoga brand and sparkling water operations will stay in Calistoga.
â€œThis is our only west coast facility where weâ€™re able to bottle sparkling water,â€ Canning said. â€œAnd this is the only place where we can bottle Calistoga water.
Economy versus demand
The situation that warrants the downswing didnâ€™t occur overnight, according to Canning. Operations got tougher as fuel prices spiked earlier this year.
â€œThe irony is that when they started to come down we got hit with the financial market crisis,â€ Canning said. â€œSo we never got the relief we were hoping for.â€
When money gets tight, people donâ€™t buy bottled beverages.
â€œAs much as we hate to admit it, ours is a disposable income product,â€ Canning said. â€œWhen times get tough people focus more on meeting their basic needs.â€
Calistoga Beverage Companyâ€™s parent company is Nestle North America, a leader in the industry, and right now, the industry is looking like itâ€™s not going to experience much of a recovery before 2010, according to Canning.
â€œWeâ€™ve got to focus on doing what we can now â€” the company has about 9,000 employees â€” and if we donâ€™t take this action now, it could jeopardize more employees later on.â€
Management at Calistoga Beverage announced the looming cuts to its employees on Monday and began holding individual meetings with employees Tuesday and are continuing through the rest of this week. Some are being told theyâ€™ll be staying, others are being told theyâ€™ll have to leave, Canning said.
â€œWeâ€™re deciding who stays and who leaves based on three criteria,â€ he explained. â€œSkillset and abilities, tenure â€” we want to honor the years of service â€” and performance reviews and disciplinary actions.â€
The good news, said Canning, is that the company isnâ€™t just lopping off employees.
â€œOur priority is to helping with the transition,â€ he said. â€œWeâ€™re bringing in the (State) Employment Development Department and holding job placement fairs with other employers.â€
The company is also paying the employees who are being cut through Dec. 31, in addition to severance packages.
â€œThose who are being let go will make what they would have made through the end of the year,â€ Canning said. â€œAfter that, their severance packages will pick up.â€