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Date: 8/10/2021
NORTHAMPTON – Count Northampton Mayor David Narkewicz among those who were surprised by the Coca-Cola Company’s news that the company intends to close its plant in the city.
News broke on Aug. 5 that Coca-Cola would be shuttering its operations at Northampton’s industrial park off of Damon Road by 2023. Company spokesperson Abby Peck confirmed the information and provided Reminder Publishing with a statement on Aug. 6 that read, “After careful consideration, the Coca-Cola Company has decided to close our production facility in Northampton, MA. We did not make this decision lightly and are grateful to have had the opportunity to have been a part of the Northampton community. Impacted employees will be encouraged to apply and be considered for jobs that they are qualified to perform within the Coca-Cola system and at other third-party manufacturer locations. The facility is targeting closure in the second quarter of 2023, and we will support our associates throughout the challenging transition.”
Narkewicz said the company provided no advance notice to the city. “We received the news virtually at the same time as it was released publicly. We received a brief communication with not much in the way of detail. We followed up immediately, but this was not something we were aware was a possibility,” he said.
Employing nearly 320 area residents, Narkewicz explained the facility, which takes up 22 acres of the industrial park, is the city’s largest manufacturer. It is one of only 14 plants owned by the Coca-Cola Company in the United States and the only one in New England; the closest remaining facility owned by the company would be in Allentown, PA, Narkewicz noted.
The Northampton facility specializes in the company’s non-carbonated products, according the to mayor. All of Coca-Cola’s carbonated products are outsourced to other companies.
Narkewicz said the company’s planned departure from the city “presents a major loss for Northampton in terms of jobs” and also noted significant impacts to property tax as well as water and sewer revenues.
While he stated his hope the company’s decision could be reversed, he said, “I was assured that Coca-Cola would be working with employees to help them relocate.”
He added, “As with any business closing, we are going to engage the various state and regional entities that work to help people find employment.”
Coca-Cola accounts for more than $300,000 annually in property tax receipts. Meanwhile, the $7 million water enterprise fund received $1.7 million from Coca-Cola from June 2020 to June 2021 and the $6 million sewer utility received $1.2 million from the company over the same time period.
“These are significant and impactful numbers,” Narkewicz said. “The city would have to do some serious financial reorganization and restructuring if this came to pass.”
Narkewicz said his primary focus at this point is to “open a dialogue with the company, understand this decision, and see if this decision is final.” He admitted his initial correspondence with Coca-Cola had been with public affairs personnel and the local plant manager, who had learned of the plans around the same time everyone else had.
The mayor indicated he had also had conversations with Massachusetts Housing and Economic Development Secretary Mike Kennealy, who recently visited Northampton’s downtown area, and “hopes to engage the Baker-Polito Administration” in his attempts to keep the company in the city.
Narkewicz noted the city and the state had made substantial contributions to Coca-Cola’s expansion of the Northampton facility in 2010.
The Patrick-Murray Administration awarded the company $1.125 million in the form of a Massachusetts Opportunity Relocation and Expansion Jobs Capital grant through the state’s Office of Housing and Economic Development. The city, under former Mayor Clare Higgins, also invested $375,000 in improvements to the Bradford Street Pump Station in order to increase the capacity necessary to make the expansion possible. The city also agreed to a tax increment financing agreement on the facility’s addition.
“This was done in recognition of the company’s investment and the new jobs it created,” Narkewicz said. “They’ve enjoyed a reduced tax rate on the new growth.”
These were among the factors Narkewicz said he had raised and would continue to raise in his efforts to maintain the local jobs.
In addition to the news on the Northampton location, Coca-Cola also announced the closure of another plant in American Canyon, CA. Meanwhile on Aug. 3, the sale of three others in Truesdale, MO, Waco, TX, and Paw Paw, MI, to Netherlands-based Refresco was announced. Refresco stated in a press release it would become “one of Coca-Cola’s strategic third-party contract manufacturers in the United States.”
In Coca-Cola’s report for the second quarter of 2021, the company said net revenue grew 42 percent to $10.1 billion while organic revenue growth to the tune of 37 percent. Year-to-date cash flow was $5.5 billion, an increase of $2.7 billion compared to 2020. For the full year, the company anticipates organic revenue growth between 12 and 14 percent.