Lies About Heinz Company and Outsourcing

[JPZenger]

An email has been widely spread on the net that Kerry is a hypocrite because the Heinz Company "outsources" much of its manufacturing overseas. The story was even picked up by Bill O'Reilly.

The following is Heinz Company's response, from www.finance.yahoo.com. Note that 60% of Heinz's sales are outside the U.S., so it is perfectly understandable that they operate factories outside the U.S. However, they are not shipping ketschup from India to the U.S.

"Press Release: H.J. Heinz Company

H.J. Heinz Company Confirms Its Widely Held Public Ownership And Non-Partisan Status
March 22, 2004

In light of some misleading speculation, the H.J. Heinz Company would like to make clear that neither Mrs. Teresa Heinz Kerry, Senator John Kerry nor any member of their family is involved in the management or board of the H.J. Heinz Company. They have no involvement in the Heinz® Ketchup business or any of the company's other brands or products.

The H.J. Heinz Company, in accordance with its corporate governance policies, is a non-partisan organization.

Neither Mrs. Heinz Kerry nor Senator Kerry nor any of the Heinz trusts or endowments - either individually or collectively - holds a significant percentage of shares of the H.J. Heinz Company. In 1995 the Heinz Endowments and family trusts sold a large percentage of Heinz shares in a secondary share offering to diversify their holdings. As a result, their current holdings are under 4 percent.

There is no connection between any philanthropic programs of the H.J. Heinz Company and its Foundation and the Heinz family interests (including the Howard Heinz Endowment, the Vira Heinz Endowment, and the Heinz Family Philanthropies).

Currently, 60% of the sales of the H.J. Heinz Company are outside the United States and to accommodate those customers by providing facilities closer to those markets, the company maintains a number of overseas facilities that provide products for consumers in those markets. This allows Heinz to pack the freshest ingredients, tailor its recipes to local tastes and deliver the final products in a timely and efficient manner. In the United States, Heinz makes its flagship ketchup in factories in Fremont, Ohio; Muscatine, Iowa; and Stockton, California."

[Frodo]

1. A good response.

Of course, it would be preferable to have the factories HERE and export the product. So there is still some "outsourcing" of jobs, but it isn't the same thing as exporting the jobs and importing the work-product.

[orwell]

2. ?

Why would it make sense to produce a food product here and export it abroad. Why pay all that shipping if you don't have to? IT would just raise the cost of the product.

Not only that, food should be produced as close to the component supplies and final demand as possible for a myriad of reasons.

O

[Frodo]

3. Why?

It doesn't "make sense" to the business. Of course Coke bottles all around the world.

But it does mean that the jobs are over there and not over here.

Questions like "why pay all that shipping if you don't have to?" are just like "why pay joe 15$/hr to work in a call center when some guy in India will do the same job for 4$?"

Both are perfectly logical. And correct - if the bottom line is the definition of right and wrong.

[orwell]

5. Over There

"why pay joe 15$/hr to work in a call center when some guy in India will do the same job for 4$?"

In the food instance a hard good is being produced-one that has a shelf life and possibly different formulations for different markets. It is best to keep the source of material supply as close to manufacturing as possible to avoid excess transportation costs and insure product quality.

In the call center instance, you are outsourcing a service, not a good, with very little additional economic friction for the outsourcing (no shipping). A service that can be outsourced (call center employee) is instantaneously portable. A good is not. The only detriment to the company in outsourcing the service in the case of the call center employee may be in QoS issues.

The bottom line for any business should be to make profit, within the framework of what is best for all concerned, stockholders/owners, employees, communities they live in, and most importantly, the customers.

O

[Francis]

6. Heinz Salad Cream

No 1 sales in UK.
Why not make it here?
Most Americans have never even heard of it
Not all Heinz foods are ameri-centric

[DAGDA56]

8. To alot of people in the UK...

Heinz is generic for baked beans...they love that stuff on toast.

[alcuno]

4. You don't understand what outsourcing is.

Outsourcing is taking a product (or service) done here in the U.S., moving the job overseas, and importing the product back into the U.S.

My Heinz ketchup was bottled in the U.S. and used in the U.S. All countries throughout the world get the bulk of their food products from in or near their country. I bought Wisconsin cheese the other day and they were practically giving it away. Have you priced French Brie?

In Iraq they produce cooking oil and are not importing Crisco; it would be cost prohibitive. It's not that complicated to bottle, can, or package food items. It's not like manufacturing a shoe or a car; those REQUIRE actual hands on work.

[Frodo]

9. Some good points.

But I will point out that Brie is more expensive than Wisconsin Cheddar for more than one reason. It happens to be a better product as well.

[dae]

7. snopes.com debunked this shortly after Paul Harvey used it on his

radio show.
Another major reason companies like Heinz and Coca-Cola have factories all over the world is people's taste. A Coke in the US does not taste like a Coke in Japan and it's not the water.