Local impact of Anheuser-Busch job cuts is unclear

CNY Business Journal (1996+), Dec 12, 2008 by Reinhardt, Eric

Anheuser-Busch InBev (Euronext: ABI) is cutting 1,400 salaried posidons nationwide, or about 6 percent of its total U.S. work force, the company announced Dec. 8.

The Leuven, Belgium-based beer maker has a plant that employs about 940 at 2885 Belgium Road in the town of Lysander. It's not known how the reductions will impact the local plant.

The company isn't able to provide specific areas of personnel cuts, an Anheuser-Busch spokesperson said in an e-mail message about the situation.

About 75 percent of the affected positions are based at the brewer's corporate headquarters in St. Louis, while other reductions will occur in field and brewery locations, Anheuser-Busch InBev said in a news release.

Union employees at the company's 12 breweries aren't affected, the company said.

The move is part of Anheuser-Busch's previously announced plans to cut 10 percent to 15 percent of its U.S. salaried work force of 8,600, as it integrates with InBev following the merger, the company said in a news release.

In addition, the company will not fill more than 250 U.S. positions that are currently open, and will eliminate 415 contractor positions.

Most of the reductions will occur by the end of this year, with the remainder taking effect next year.

Anheuser-Busch InBev will provide employees severance pay and pension benefits based on age and years of service. Employees will also be offered help in finding new jobs.

The company anticipates the reductions will mean a pre-tax cost of about $197 million.

These reductions are in addition to more than 1,000 U.S. salaried employees who accepted the company's voluntary retirement program, which closed Nov. 14.

The company expected cost savings of SI billion from the work-force reduction effort.

When the two companies decided to join forces on July 13, a joint statement indicated all 12 U.S. breweries would remain open. In June 2008, Anheuser-Busch had announced plans to reduce its U.S. salaried work force by the end of the year.

InBev shareholders approved the acquisition of Anheuser-Busch for $70 per share on Sept. 29. Anheuser-Busch shareholders approved the deal on Nov. 12.

Six days earlier, Anheuser-Busch announced that employees at all 12 U.S. breweries, represented by the International Brotherhood of Teamsters, ratified a new five-year contract that included language renewing the company's commitment to keeping all the breweries open for the life of the pact.

The acquisition closed Nov. 18, making Anheuser-Busch a wholly owned subsidiary of Anheuser-Busch InBev and creating one of the world's top five consumer products companies.

Before allowing the acquisition to move forward, federal regulators forced InBev to agree to one condition.

The U.S. Justice Department informed InBev Nov. 14 that it had to sell its Labatt USA subsidiary over concerns about reduced competition for beer sales in the Syracuse, Rochester, and Buffalo markets.

According to the Justice Department, Anheuser-Busch's Budweiser brands, including Budweiser and Bud Light, and InBev's Labatt brands, including Labatt Blue and Labatt Blue Light, are the biggest selling beer brands in those cities.

The original transaction would have eliminated competition between the brands and resulted in higher prices for beer drinkers in the three areas.