Following Factory Opening, Osem to Close Another

Osem was lauded last week for announcing that it would open a new plant in Arad, but was panned on Sunday for closing another plant.

Yaakov Levi,

Osem products
Osem products
PR photo

With its announcement that it was planning to open a major operation in unemployment-plagued Arad in southern Israel, Osem was lauded for bringing jobs to a city that has long felt ignored by corporate Israel. But every action has an equal and opposite reaction; in order to move operations to Arad, Osem will be closing down its Kiryat Malachi operations – and workers at Osem's plant there on Sunday demonstrated against the impending move.

Last week, the company said it would build a new factory to manufacture ice cream and other treats in Arad, where it would employ 250 people. The move was hailed by politicians and officials, including Zvi Oren, president of the Israel Manufacturers Association, who said that “the industry has proven once again that it is there when you need it. We congratulate [Osem founder] Dan Propper and Osem on the initiative and the decision to assist the city of Arad and its residents.”

But workers in Kiryat Malachi weren't as happy with the announcement, and on Sunday, labor committees at Osem's operations there declared a work dispute, a required step before a strike can be called. The Kiryat Malachi factory has more than 250 workers, and only about 100 are to be transferred to the new facility, workers said.

According to Moshe Machlouf, head of the factory's workers committee, the Osem announcement blindsided the union, because workers had been told several months ago that a new Osem factory was to be built in their town. “This is a shock and an embarrassment,” he said. “They are taking money from one pocket to pay the other. The blood of workers in Arad is not thicker than our blood.”

MK Erel Margalit (Labor) on Sunday wrote a letter of protest to the State Comptroller and the Attorney General on the matter. “Moving the factory will not create new jobs, but will simply replace the currently unemployed in Arad with new unemployed in Kiryat Malachi.”

According to Margalit, the factory is set to be eligible for government assistance, but he believes that it will not meet the criteria for that assistance, and is asking for an investigation into who authorized government assistance for the move, and why.