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380 Peterlee jobs at risk as PepsiCo plans to shut Walkers plant by end of year

PepsiCo has said it is proposing the closure of its Walkers Snacks factory in Peterlee by year-end, putting 380 jobs at risk.

The US food giant - which owns the Walkers brand - notified its County Durham employees of the proposal on Wednesday, and said the move could mean shuttering the facility at the end of December.

It said the move was part of an efficiency drive that would see crisp production moved to other factories across the country.

Around 355 manufacturing site jobs and 25 transport worker positions are under threat as a result.

Tracey Foster, the manufacturing director at PepsiCo UK, said: "In order to improve the efficiency of our UK snacks manufacturing operations, we are proposing the closure of our factory at Peterlee."

She added: "Peterlee has been an important site for our business but the changes we are proposing present significant productivity and efficiency savings crucial for ensuring the long-term sustainable growth of our business in the UK."

Michael Hunt, the regional organiser for the GMB union, said he planned to challenge the move.

"It wasn't long ago that the Government said they wanted to reinvigorate the region and inject business into the North East but the opposite appears to be true. For want of a better phrase, this isn't the Northern Powerhouse, it's the Northern Poorhouse."

"This is terrible news for our members - the employees - and their families, and for the town of Peterlee."

Workers were informed of the proposal at a 10am meeting at Ramside Hall Hotel, Durham.

There was no shift on duty on Wednesday and the car park at the plant was deserted, with normal production set to resume on Thursday.

Speaking outside the site, Mr Hunt said it had been proposed to shut the plant on December 31.

Mr Hunt remarked: "It's a massive Happy New Year from Walkers."

He expects to meet with the company on March 15 - the same day that the company will launch a near six-week consultation that will run until the end of April.

Ms Foster said: "We appreciate this is upsetting news for everyone at the Peterlee site. It is a difficult proposal for us to put forward and we want to make clear that it in no way reflects the performance of our colleagues at Peterlee, who we are grateful to for their hard work and commitment.

"No decisions will be made without first consulting employees and their representatives. We would also like to reassure colleagues that we will be providing on-going support and assistance from this point onwards."

The news comes just weeks after PepsiCo reported an 18% drop in fourth quarter net income to 1.4 billion US dollars (£1.1 billion) from 1.7 billion US dollars (£1.4 billion) during the same period in 2015.

Pepsico has charged ahead with its so-called productivity plan, which has seen the company invest in automation, and work at "further optimising" its global operations in part by "closing certain manufacturing facilities".

Chair and chief executive Indra Nooyi said the company is expecting "solid financial performance" throughout 2017 "despite anticipated continued macroeconomic challenges".

But Ms Nooyi told analysts during a conference call last month that Pepsico was experiencing steady business, regardless of political events such ad Donald Trump's election and the EU referendum last June.

"I mean we are basic food and beverage. I don't believe political actions impact consumption of our products. And we are not seeing any deterioration in activity versus our products and the market growth continues," she said.

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