PHOENIX (3TV/CBS 5) - The City department tasked with economic development said it is reaching out to Nestlé to find out why the company shut down its west Phoenix water bottling plant after just seven months in operation.
Nestlé spent millions to turn a warehouse at 43rd Avenue and Buckeye Road into a plant capable of bottling 35 million gallons of city tap water a year. The facility drew the ire of activists, who gathered tens of thousands of petition signatures when the plant was first announced.
The company announced Monday it had shuttered the plant, laid off 15 employees, and would shift operations to another facility.
“Any company that leaves the market, we try to do an exit interview with to find out, what caused you to leave? Was it something within your own business model? Was it something Arizona did?” said Phoenix Community and Economic Development director Christine Mackay.
Nestlé started bottling water at the facility at the end of July 2018.
In a statement explaining the closure, Nestlé cited the need to “drive out inefficiencies and manage our costs” to “position the company for long-term success.” Nestlé did not elaborate on the specific costs or inefficiencies that drove the decision.
Activists said they were pleased and surprised by Nestlé’s decision to cease operations.
“We obviously live in a desert and water is our most precious natural resource,” said water conservation advocate Stacey Champion. “It's literally just taking our tap water and putting it into that plastic bottle and then selling it back to us.”
Champion said when she and others pleaded with the City to block the plant in 2016, the City told them its hands were tied – that the City was required by law to provide water service to every paying customer with no caps.
“I think it's a good opportunity for [the City] to revisit their own ordinances and policies surrounding high water users,” she said.
While it’s possible the owner of the building could rent it to another water bottling company, Mackay said her team will market the facility to other industries.
“Even though it was designed for water bottling on its improvements, that is going to be stuff that other manufacturers are looking for,” she said.
Nestlé factory manager Hugues Larente said the company was supporting impacted employees by keeping them on payroll, providing separation packages based on their years of service, and offering other benefits.
“We are working with the City to help our associates take advantage of the services provided by the Phoenix Workforce and Business Development Center. We are also reaching out within the Nestlé family of companies to explore if there are open / available positions for impacted associates with similar skills and capability requirements,” he said.