ROSEMONT, IL - US Foods has confirmed plans to officially close its Severn, MD, distribution center this June, effectively removing the company’s presence in the state it once called home. The foodservice company will be shifting its operations to other facilities in the region.
According to a report from the Baltimore Sun, this decision comes in part due to declining sales in the Washington, D.C., area and after failing to reach an agreement on concessions with the facility’s unionized workers.
"Moving forward with a closure is always a very difficult decision; however, we need to better align our distribution network so we can more cost-effectively serve all of our customers throughout this important market," John O'Carroll, US Foods' Northeast region President, said in a statement.
According the Baltimore Sun, US Foods was seeking $8 million in annual concessions from its unions, including switching from pensions to a 401(k) and an average pay cut of $5.75 an hour for warehouse workers. These demands were too large to meet, according to Denis Taylor, President of Teamsters Local 355, one of two Teamsters locals that together represent about 180 workers in Severn.
According to the union, US Foods’ plan would amount to a loss of about $40,000 in wages and benefits for a worker each year, with the average worker currently earning about $24 an hour.
The parent company of US Foods filed to go public this February following a fall-through of its Sysco merger plans. The company remains the country's second-largest food service distributor, with $23 billion in sales last year.
