Chicago Bakery That Supplied Buns for McDonalds, Loses 800 Staff After Immigration Raid
Earlier this year a bakery in Chicago lost 800 of its workers after an immigration raid revealed they were illegal immigrants.
Cloverhill Bakery, a Swiss-based company that makes hamburger buns for McDonald’s, lost about 35 percent of its workforce—after employees failed to provide sufficient documentation that they were legally in the country, according to Bloomberg.
The bakery, located in Chicago’s Galewood neighborhood and owned by Zurich-based Aryzta AG, makes food products for fast-food chains and supermarkets. The company said its employees were supplied by a job placement agency that went through federal audits earlier this year, Bloomberg reported.
The staffing agency was not named in any of the reports.
The chief executive officer of the company, Kevin Toland, said on a call with analysts that it is struggling to get back on track.
“It’s proceeding very, very slowly because it’s like having a brand new factory and a brand new workforce,” Toland said. “That’s presenting a lot of challenges, as you can imagine.”
According to Bloomberg, the raid on Cloverhill is one of the largest U.S. employment incidents reported by a European company so far.
The bakery has lost $21 million this year due to the immigration incident, according to WGN-TV.
Aryzta AG said it is striving to replace its staff and that it is facing mounting pressure to raise wages for its employees.
Toland said that the situation caused a 7 percent decline in Aryzta’s sales from North America, just in the past three months through October, Bloomberg reported. The CEO also said increased employment costs are affecting retailers and restaurants nationwide, adding that it will soon affect consumer prices as well.
Aryzta was not able to vet its workers to see if they had the necessary documents because the employees were brought in by an outside staffing agency, according to interim Chief Financial Officer David Wilkinson.
Wilkinson said the company’s board did not know how much the extent of the immigration problem existed in the business.
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