Maple Leaf to cut jobs, close plants in sweeping overhaul

Maple Leaf Foods Inc. (MFI-T10.690.141.33%)unveiled a sweeping $560-million overhaul that will see it close most of its aging meat-processing factories in Canada in a bid to slash costs as it fights with more efficient global rivals.

Facing increased competition from U.S. meat suppliers and pressure from shareholders to improve the financial results, Maple Leaf chief executive officer Michael McCain pledged in an interview to significantly boost the company’s profits by closing eight plants and distribution centres, building a massive new factory in Hamilton and upgrading plants in Brampton, Ont., Winnipeg and Saskatoon. But the plan also comes with a human cost: It will cut 1,500 jobs, or about 12 per cent of the work force in the meat division, Maple Leaf’s largest unit.

The radical remake of Maple Leaf, one of the country’s largest food manufacturers, underscores the challenge facing Canadian manufacturers that can no longer rely on a weak Canadian dollar to help them compete. Canadian factories are “starved for capital,” Mr. McCain said, because a low Canadian currency during the past two decades has allowed them to make gains internationally without investing in more efficient technology. Now that the loonie is close to par with the U.S. dollar, he said, Maple Leaf Foods and other food processors are struggling to compete against larger, more productive U.S. companies.

Listeriosis Victims, Families Still Waiting For Compensation

Three years after tainted meat led to a deadly listeriosis outbreak and the largest food recall in Canadian history, victims and their families are still waiting to receive compensation agreed to in an out-of-court settlement.

As she prepares for a big Thanksgiving weekend with family and friends, Karen Clark is still haunted by the vision of her mother Francis lying in a Belleville, Ont., hospital gasping for breath in the summer of 2008.

Francis Clark was one of 23 people who died of listeriosis after eating meat from a Toronto-area Maple Leaf Foods processing plant.

"It was awful. The stare. She wasn't even blinking. She looked like a fish that had been laid up on the shore."

The tragedy resulted in two investigations and a settlement. Though he had disparaged lawyers in the case who were planning to sue, Maple Leaf Food president and CEO Michael McCain agreed to pay out up to $27 million to victims who got listeriosis that summer, and their family members. The settlement was announced in January 2009.