MILWAUKEE -- The Jos. Schlitz Brewing Co., which produces a beer it claims made this city famous, said Friday it will close its strikebound Milwaukee brewery, effective Sept. 30.
Schlitz, in the process of being sold to the G. Heileman Brewing Co. of La Crosse, has operated a brewery in Milwaukee since it was founded in 1849. The present site has been occupied by the old-line firm since the 1880s.
The 6.8 million barrel malt beverage plant -- the least modern of the Schlitz facilities -- has not been in production since May 31, when about 720 hourly employees went on strike when the old contract expired.
'The business decision to cease brewing operations in this city was a difficult one to make,' said Frank J. Sellinger, Schlitz vice chairman and chief exeuctive officer.
'Despite a modest gain in barrels of beer sold in the second quarter of 1981, the first year-to-year quarter barrelage gain for Schlitz since the third quarter of 1976, the fact remains that we are carrying substantial excess brewing production capacity.
'This is a condition that cannot be continued in today's competitive brewing industry,' he said.
After allowing for some hourly workers who have since May 31 elected to take early retirement, about 700 people, including hourly and certainly salaried personnel, will be affected, the brewery said.
The Milwaukee brewery has a net book value of about $24 million. The charge to earnings has not been determined, Schlitz said.
Not affected by the brewery production closing are the company's headquarters operation in Milwaukee and its container division plant in suburban Oak Creek, a spokesman said.
Schlitz said the closing of the Milwaukee brewery will reduce its total capacity to 18.8 million barrels. It said it sold 14.9 million barrels of beer in 1980.
The brewery's board of directors only Thursday approved the agremeent for sale of the brewery to Heileman in a $494 million deal that would make the La Crosse firm the nation's No. 3 brewer.
The agreement involves payment of cash and stock to Schlitz investors.
A final agremeent still must be approved by stockholders as well as the federal government. Both sides have said they hope the merger can be consummated by Oct. 15.
