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updated: 5/19/2017 3:50 PM

Butterball to repay $992,000 loan as Montgomery seeks ways to help the jobless

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  • Butterball is closing its Montgomery facility by July and laying off 700 workers.

      Butterball is closing its Montgomery facility by July and laying off 700 workers.
    Brian Hill | Staff Photographer

  • Caterpillar's operations in Montgomery is slated to close by next year and cut 800 jobs.

      Caterpillar's operations in Montgomery is slated to close by next year and cut 800 jobs.
    RICK WEST | Staff Photographer

 
 

Montgomery officials worked Friday to find help for about 1,400 workers losing their jobs when Caterpillar Inc. and Butterball LLC close.

In addition, Butterball owes Montgomery about $992,000 on a $1.5 million loan it received in 2013 for the expansion of its meatpacking plant. Butterball plans to repay the loan before it closes the plant in mid-July, said village Administrator Jeff Zoephel.

With the impending shutdowns by the two major employers in town, untold financial hurt could happen if those sites aren't filled and workers look for new jobs.

"We are still determining in what ways we can provide assistance and support to employees affected by the actions of both Caterpillar and Butterball," Zoephel said. "We have contacted Waubonsee Community College to talk about opportunities for retraining programs as well as help with creating resumes and preparing for job interviews."

Butterball announced Thursday it will close its pork and turkey meat processing plant by July 17 and cut about 600 jobs. The longtime plant had been Gusto Packing Co. before Butterball bought the company in 2013. It was the second major hit to Montgomery in recent months. The other was Caterpillar, which said in late March it will close its operations in town by next year and cut about 800 jobs.

"Gusto Packing was a longtime, family-owned business and when Butterball purchased the plant and made improvements, we anticipated that they would be operating their business here for many years to come," Village President Matt Brolley said in a statement. "The employees have been very loyal to this facility for a long time, and the sudden closure comes as a shock to them and to us."

Meanwhile, Butterball Chief Financial Officer Barry Gum confirmed the company will repay the loan and is "committed to working with the village and state in the days and weeks ahead."

Besides the outstanding loan, Butterball also was approved for a $728,233 Edge tax credit over a 10-year period from the Illinois Department of Commerce and Economic Opportunity. However, Butterball did not collect that funding, said IDCEO spokeswoman Jacquelyn Reineke.

While Butterball employees will be out of work this summer, Caterpillar said it anticipates its layoffs to start later this year, said Caterpillar spokeswoman Lisa M. Miller.

"Caterpillar will provide each impacted employee tools and resources to prepare for the change in their career," Miller said. "Depending on the individual, employees will be provided a variety of help from job placement services, opportunities to apply for other Caterpillar jobs or assistance in moving to other Caterpillar locations."

Montgomery officials said the priority is to help local workers find jobs. They may look at other companies in Montgomery, including Performance Food Service, Eby-Brown, VVF and Wal-Mart.

"I do not know what, if any, available positions these companies have," Zoephel said.

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