The union has accused PepsiCo of violating federal law by not providing the required 60-day notice for plant closures. Credit: Jonathan Weiss /Shutterstock.

PepsiCo is closing a bottling plant in the US, citing the facility’s “physical limitations”. 

In a statement, the Pepsi and Mountain Dew brands owner said the decision to close the plant in Chicago was “difficult”.

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The site is located in the city’s Back of the Yards neighbourhood.

“The decision to no longer operate at 51st Street is a difficult one. This is a more than 60-year-old building that has physical limitations,” PepsiCo said in a statement sent to Just Drinks.

PepsiCo did not answer this publication’s questions regarding what the facility manufactured, to where production will be relocated and the impact on jobs.

Citing the Teamsters union, AP reported the closure will lead to 150 redundancies.  

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Teamsters Local 727, the union representing workers, was told about the plan through an email from PepsiCo attorneys yesterday (28 October), AP said.

The union has reportedly accused PepsiCo of violating federal law by not providing the required 60-day notice for plant closures or mass layoffs at facilities with 50 or more employees.  

Teamsters Local 727 secretary-treasurer John Coli Jr said that the union was not informed about the potential closure during recent contract negotiations and is considering legal action against PepsiCo.  

“To lay off over a hundred Teamsters workers with no notice to them or the union, in violation of both our collective bargaining agreement and the law, is about as low as you can get,” Coli was quoted by AP as saying.  

In its statement to Just Drinks, PepsiCo said: “Our top priority is to support our employees during this transition, and our commitment to serve Chicagoland remains strong. Our plans meet applicable legal requirements and we will actively work with union leadership on the details related to the closure.”

Earlier this month, PepsiCo reported its PepsiCo Beverages North America (PBNA) business had generated an operating profit of $914m in the third quarter, down from $970m a year earlier. Revenue stood at $7.17bn, up from $7.16bn the year previous.

Speaking to analysts, CEO Ramon Laguarta said PBNA was seeing improvements in margins despite the year-on-year drop in operating profit.

He said: “The business grew margin last year meaningfully and it will grow margin this year meaningfully. And we see a good line of sight to our intentions of the mid-teens margins in a couple of years in PBNA. So, that is working.”