(Bloomberg) -- A Swiss maker of hamburger buns for McDonald's Corp. said it's struggling to run a Chicago bakery after it lost a third of its workers in a clampdown on 800 immigrants without sufficient documentation.
About 35 percent of the workers at Cloverhill Bakery had to be replaced, according to Zurich-based Aryzta AG. The company, which makes baked goods for fast-food chains and supermarkets, said the employees were supplied by a job-placement agency that faced federal audits earlier this year.
“It's proceeding very, very slowly because it's like having a brand new factory and a brand new workforce,” Chief Executive Officer Kevin Toland said on a call with analysts. “That's presenting a lot of challenges, as you can imagine.”
The raid on workers at Cloverhill is one of the biggest U.S. employment headaches reported by a European company so far as President Donald Trump has made curbing undocumented immigration a centerpiece of his presidency. Aryzta said it faces challenges in retaining staff in the U.S. and pressure to raise wages.
The Cloverhill issues led to a 7 percent decline in Aryzta's sales from North America in the three months through October. The increase in employment costs -- which is affecting retailers and restaurants nationwide -- will eventually lead to higher consumer prices, Toland said.
Aryzta wasn't able to verify that the workers had the necessary documents to work because they were brought in by a staffing agency, interim Chief Financial Officer David Wilkinson said in September. He also said the board wasn't aware of the extent of the risk that existed to the business. The company first reported the loss of 800 workers at that time.
The Swiss company didn't name the staffing company.
To contact the reporter on this story: Thomas Mulier in Geneva at tmulier@bloomberg.net.
To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John J. Edwards III
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